REPORT OF THE AUDIT COMMITTEE
The Honorable,
The Board of Commissioners of
ATTENDANCE
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Present: |
Chairman Daley, Vice Chairman Goslin, Commissioners Ex-Officio
Members: Laura A. Burman – Cook County
Auditor; and Donna L.
Dunnings – Chief Financial Officer, Bureau of Finance (2) |
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Absent: |
None (0) |
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Also
Present: |
Commissioners Beavers and Peraica (2); Patrick T.
Driscoll, Jr. – Deputy State’s Attorney, Chief, Civil Actions Bureau; Antonio
Hylton – Chief Information Officer, Bureau of Information Technology &
Automation; Mary Jo Horace – Director, Department of Office Technology; Zelda
Whittler – Undersheriff, Office of the Sheriff; Jack Kelly – Chief Financial
Officer, Office of the Sheriff; John Cookinham – Chief Financial Officer,
Bureau of Health Services; John Morales – Chief Financial Officer, Stroger
Hospital of Cook County; Kelvin Magee – Comptroller, Stroger Hospital of Cook
County; Richard Morbidoni – Superintendent, Veterans’ Assistance Commission;
Dorothy Loving – Audit Supervisor, Office of the Cook County Auditor; Wasil
Fashina – Comptroller, Office of the Clerk of the Circuit Court; Gerry Fink –
Director, Deloitte & Touche LLP; Catherine Maras O’Leary - former Chief
Information Officer of Cook County |
Court
Reporter: Anthony W. Lisanti, C.S.R.
Ladies and
Gentlemen:
Your
Audit Committee of the Board of Commissioners of Cook County met pursuant to
notice on
Chairman
Daley began the meeting by requesting leave of the Committee to allow Donna
Dunnings, Chief Financial Officer, to address the issue of the difference
between the date of an audit report and the date the report is issued to the
Board.
Ms.
Dunnings detailed the new procedures and mechanisms that she has installed
since she has taken over as Chief Financial Officer that should ensure
consistency, timeliness and synchronicity in audit review processes. This involves cooperation across Bureaus and
departments. For example, she has been
working with the Chief Information Officer to make sure any issues regarding
fixed assets are worked out. She also
meets weekly with the audit team and holds status hearings to ensure deadlines
are being met. She stated that she now
has a Director of Financial Reporting who is managing the whole process; once
staff training and all new procedures are in place, it is her goal to have the
process running smoothly within the next two to three years.
Chairman
Daley requested that a letter from Laura Burman, Cook County Auditor, be made a
part of the record. This letter was sent
to the Audit Committee members and addresses the issue. (See Attachment #1.)
Commissioner
Quigley inquired as to the reason for the delay in receiving independent audit
results. He wondered whether the delay
was attributable to the management response.
Chairman
Daley responded that he believes that may be part of the reason,
however he suggested that Ms. Dunnings and Ms. Burman address Commissioner
Quigley’s question.
Ms.
Dunnings stated that with regard to the Comprehensive Annual Financial Report,
it was more of a training issue to ensure that timelines were being
followed. She added that representatives
from Deloitte & Touche were present and could discuss improvements that
have been seen in this process.
In
response to a question by Commissioner Quigley regarding the flow of an audit
once finished by an independent auditor, Ms. Dunnings replied that the finished
audit first goes to the Comptroller and Chief Financial Officer for their
review. These individuals then meet with
the Administration to review the audit and to provide input in terms of management
response and resolution of issues.
Commissioner
Quigley asked when the Board should expect to see the final audits, under the
improved process described by Ms. Dunnings.
Chairman
Daley added specificity to Commissioner Quigley’s question, posing the question
of when the Board should expect the Comprehensive Annual Financial Report for
the Fiscal Year ended
Ms.
Dunnings stated that it is recommended that the Board receive the completed
audit within six to nine months after the end of the fiscal year.
Commissioner
Quigley commented that if there is an issue of extraordinary concern that
arises as a result of audit findings, it should be communicated to the Board
immediately.
Ms.
Burman suggested that while the Office of the
Chairman
Daley added that in some cases departmental cooperation in the audit process
has been difficult to achieve.
Commissioner
Quigley responded that the Board should be aware of such cases.
Commissioner
Peraica expressed concern that the Board has not yet received the external
auditor’s report on the alleged missing funds at the Public Administrator’s
Office.
Chairman
Daley reminded the Committee members of testimony given at the last Audit
Committee meeting by the current Public Administrator, Mr. Michael Ian
Bender. Mr. Bender had indicated that
the Attorney General had requested the report not be released. Chairman Daley read into the record a portion
of a letter dated
Patrick
T. Driscoll, Jr.,
Chairman
Daley stated that a request would be made to the Attorney General on the
subject of holding an Executive Session on this issue.
Your
Committee has considered the following items and upon adoption of this report,
the recommendations are as follows:
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287222 |
OFFICE OF THE CLERK OF THE CIRCUIT COURT - INDEPENDENT
AUDITOR REPORT. Transmitting a
Communication, dated submitting the Fiscal Year 2006 Independent Auditor Report for the
Office of the Clerk of the Circuit Court.
Please note that this year there is no Management Letter from Ernst
& Young. According to the partner,
Mr. Kenneth R. Herlin, the Clerk of the Circuit Court’s Office has
successfully cleared all its findings, and therefore no Management Letter is
necessary. Please accept this report
and refer it to the Audit Committee for review. * Referred to the
Audit Committee on |
Commissioner Quigley pointed out the seemingly wide range
between interest rates earned on accounts that have similar amounts of
deposits. He inquired as to the reason
for this.
Wasil Fashina, Comptroller for the Office of the Clerk of
the Circuit Court, responded that the lower rates correspond with lower deposit
amounts. He also stated that their
investment policy allows for shopping around for the best rates, which can be
impacted by the date and time of renewal.
For the record, Chairman Daley stated that this audit was
for the year ending
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
287222. The motion carried.
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284059 |
BUREAU OF FINANCE, by Thomas J. Glaser, Chief Financial
Officer, transmitting a Communication, dated Subject: submitting is a copy of The Management Discussion and Analysis (MD&A) found on
pages 3 through 8, provides an overview of the Bureau’s operations and
financial position. * Referred to the
Committee on Finance on * Discharged from
the Committee on Finance and referred to the Audit Committee on |
Commissioner Gorman asked for additional information on the
provision for bad debt expense.
Kelvin Magee, Comptroller of Stroger Hospital, responded
that this was a calculation based on the receivables they expected to be
uncollectible.
John Cookinham, Chief Financial Officer for the Bureau of
Health Services, replied that this is part of the ongoing effort to identify
insurance coverage at the onset of services provided. He stated that approximately forty percent of
the patients are not covered by Medicaid or third party insurance. The provision for bad debt expense is a
result of that. There is screening at
the front side for eligibility for Medicaid, however he expects that there will
always be a significant provision for bad debt expense; it will never be zero.
He added that they were trying to improve the eligibility and screening
process.
Vice Chairman Goslin asked Mr. Cookinham about the Bureau’s
procedure for writing off bad debt.
Mr. Cookinham replied that the request to write off bad debt
must come before the Board of Commissioners for approval.
Vice Chairman Goslin further inquired on the composition of
the $252 million in bad debt expense. He
asked whether this figure included the estimated $2-3 million in uncollected
bills found in boxes earlier this year.
Mr. Cookinham explained that Medicaid will accept bills only
up to one year, and any of those bills that go beyond that would be a part of
the $252 million.
Chairman Daley added that the administration is attempting
to receive an exemption from Medicaid that would allow the County to pursue
reimbursement for an additional six months beyond that for these particular
bills.
Commissioner Maldonado voiced concerns about current screening
and eligibility processes at the Bureau, and asked whether any consideration
had been given to privatize this function.
Mr. Cookinham responded that they had contemplated
privatizing some of the eligibility services at the front end, but not the
registration services.
Commissioner Maldonado expressed his dissatisfaction with
the condition of the Limit of Liability program.
Mr. Cookinham acknowledged that improvements are needed for
this program and to the overall eligibility process, in order to create a
patient-friendly environment.
In response to a question from Commissioner Peraica
pertaining to declining revenues, Mr. Cookinham responded that he believed that
the declining revenue was not only from patient billings, but also as a result of
reductions in intergovernmental transfers from the state.
Chairman Daley added for the record that the Board was made
aware that the intergovernmental transfers would decline. He also stated for
the record that on page nineteen of this report, the figure reflecting the
total of self-pay patients is forty-seven percent.
Chairman Daley asked what percentage of self-pay patients a
private hospital would have.
Mr. Cookinham responded that a private hospital would have
less than five percent of self-pay patients.
Vice Chairman Goslin,
seconded by Commissioner Gorman, moved to receive and file Communication No.
284059. The motion carried.
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284062 |
BUREAU OF FINANCE, by Thomas J. Glaser, Chief Financial
Officer, transmitting a Communication, dated Re: submitting a copy of * Referred to the
Committee on Finance on * Discharged from
the Committee on Finance and referred to the Audit Committee on |
John Morales, Chief Financial Officer of
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
284062. The motion carried.
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286481 |
BUREAU OF FINANCE, by Donna L. Dunnings, Interim Chief
Financial Officer, transmitting a Communication: submitting herewith a copy of the * Referred to the
Audit Committee on |
Commissioner Peraica asked Donna Dunnings, whether there
have been improvements or mechanisms put in place, or if efforts had been made
to streamline procedures as a result of this report.
Ms. Dunnings responded affirmatively, stating that she now
has a grant coordinator in her office; this individual is responsible for
working with all the departments. She
added that she is working closely with the
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
286481. The motion carried.
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286859 |
STATUS OF AUDIT RECOMMENDATIONS REPORT. Transmitting a Communication, dated Respectfully requesting that the “Status of Audit Recommendations”
report as of April 2007 be referred to the appropriate committee for review. The report dated * Referred to the
Audit Committee on |
Commissioner Peraica asked Ms. Burman to provide an update
on the status of recommendations raised in her letter of
Ms. Burman replied that all departments have cooperated in
responding, however her office has not gone back to check that all of those
recommendations which have been indicated as being implemented have in fact
been done. She added that this would be
done in the coming months.
Chairman Daley stated that Ms. Burman will report to the
Chief Financial Officer and the Board by September or October regarding all
items that are not completed.
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
286859. The motion carried.
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284060 |
BUREAU OF FINANCE, by Thomas J. Glaser, Chief Financial
Officer, transmitting a Communication, dated Subject: Comprehensive
Annual Financial Report (CAFR) for the Fiscal Year Ended submitting is a copy of The Transmittal Letter, on pages vii through xiv, and the
Management Discussion and Analysis (MD&A) found on pages 3 through 19,
provide an overview of the County’s operations and financial position. * Referred to the
Committee on Finance on * Discharged from
the Committee on Finance and referred to the Audit Committee on |
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
284060. The motion carried.
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287214 |
MEMORANDUM ON INTERNAL CONTROL FOR
FISCAL YEAR ENDED Subject: Fiscal Year ended submitting herewith a copy of the County’s “Memorandum on
Internal Control” for fiscal year ended * Referred to the
Audit Committee on |
Commissioner Peraica asked Mr. Gerry Fink from Deloitte
& Touch LLP to provide an overview of the problems identified with regard
to operations and the fiscal position of County government.
Mr. Fink began by stating that both repeat points revolve
around the implementation four years ago of a new accounting principal known as
GASB 34. This introduced a whole new
level of financial reporting which could be described as consolidated financial
reporting, in which pension liabilities, capital assets and depreciation
expenses are recorded in the financial statements.
Mr. Fink described one repeat point, which he stated had
been previously addressed earlier in the Committee meeting by Ms.
Dunnings. This was pertaining to
financial reporting, and he believed that this point was being actively
addressed. Additionally, he felt that
there was a beneficial change in attitude and ability to implement recommended
changes in order to address reporting and fixed asset records on a timely
basis.
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
287214. The motion carried.
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285947 |
SHERIFF OF COOK COUNTY, Thomas J. Dart, by Jack Kelly,
Chief Financial Officer, transmitting a Communication, dated submitting the Independent Auditor’s Report
dated * Referred to the
Audit Committee on |
Vice Chairman Goslin,
seconded by Commissioner Schneider, moved to receive and file Communication No.
285947. The motion carried.
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285953 |
SHERIFF OF COOK COUNTY, Thomas J. Dart, by Jack Kelly,
Chief Financial Officer, transmitting a Communication, dated requesting permission to write-off non-collectible checks
from the Municipal Fund for the following years: YEAR AMOUNT 2000 $1,555.40 2001 $1,684.60 2002 $1,400.20 2003 $1,447.92 2004 $1,437.60 2005 $1,524.68 * Referred to the
Audit Committee on |
Commissioner Peraica asked Jack Kelly, Chief Financial
Officer for the Office of the Sheriff, whether these non-collectible checks
were for eviction services or for other services.
Mr. Kelly replied that these were for other services,
including summons and divorce fees.
Vice Chairman Goslin,
seconded by Commissioner Quigley, moved to receive and file Communication No.
285953. The motion carried.
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284405 |
OFFICE OF THE COUNTY AUDITOR, by Laura A. Burman, C.P.A.,
Cook County Auditor, transmitting a Communication, dated submitting herewith a copy of the financial
report of the Inmate Trust and Petty Cash Funds, Department of Corrections, Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on * Deferred on |
Mr. Kelly reviewed the details behind the findings regarding
a nearly $300,000 difference between accounts, and described their ongoing
efforts to reconcile that difference.
Vice Chairman Goslin,
seconded by Commissioner Butler, moved to receive and file Communication No.
284405. The motion carried.
286846 |
REVIEW OF THE CONTROLS OF THE FINANCIAL OPERATIONS OF THE submitting herewith a copy of the review of
the controls of the financial operations of the Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on |
Vice Chairman Goslin requested that Communication Number
286846 be deferred, in order that it may be discharged at the
Chairman Daley explained that a letter from the State’s
Attorney has been received on this subject, and that the subject is expected to
be discussed in Executive Session at the
Vice Chairman Goslin,
seconded by Commissioner Gorman, moved to defer consideration of Communication
No. 286846. The motion carried.
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286860 |
FINANCIAL REPORT OF THE TELEPHONE COMMISSIONS AND SALVAGE
SALES, DEPARTMENT OF CENTRAL SERVICES.
Transmitting a Communication, dated submitting the financial report of the
Telephone Commissions and Salvage Sales, for the Department of Central
Services, for the period ended Please accept this report and refer it to the Audit
Committee for review. Please note that field work on this audit was conducted
from 2004 through 2006, and our findings represent issues we found present
throughout our fieldwork and were evident as of our exit conference with the
Department of Central Services in March 2007. The management responses to the findings and
recommendations presented in our report were provided by Mary Jo Horace,
Interim Chief Information Officer, Bureau of Information Technology and
Automation. As you may be aware, a document titled ‘Central Services
Audit Responses’ was provided by Catherine Maras O’Leary, former Chief of the
Bureau of Information Technology and Automation, in regards to our Department
of Central Services management letter dated April 2, 2007. As this correspondence was dated We noted many inaccuracies in the ‘Central Services Audit
Responses’ provided by Catherine Maras O’Leary. We provided our comments regarding these
inaccuracies and additional information surrounding our management letter and
its content in a letter to President Stroger dated * Referred to the
Audit Committee on |
Chairman Daley indicated that Catherine Maras O’Leary,
former Chief Information Officer of
Dorothy Loving, Audit Supervisor from the Office of the Cook
County Auditor, was introduced and gave a summary of the audit. She stated that the audit was of the
financial transaction portion and also to find whether the parties were
complying with the contract. Upon
review, the Auditor’s Office could not find invoices from the subcontractor,
Crucial Communications LLC, for services rendered or materials provided for
their $1.7 million participation in the contract. Copies of the invoices were requested from
SBC/AT&T, the contractor for this contract.
However, SBC/AT&T indicated that there were no invoices.
Furthermore, Ms. Loving reported that there were some
inaccuracies in management responses to these audit findings. For example, one audit finding raises the
question of whether the County is owed $551,000. The answer to this question hinges upon when
the contract began. According to Ms.
Loving, the contract was amended or modified with SBC/AT&T in July 2006,
without Board approval, and allegedly reflected a change in the original
contract’s start date. She stated that
this change could preclude the County from collecting the over $551,000 that
she believed was owed by SBC/AT&T.
Mr. Driscoll stated that the original contract was executed
on
Commissioner Peraica asked the State’s Attorney if their
office was reviewing whether the minority contractor certification for this
contract was not properly handled according to County procedures.
Mr. Driscoll replied that he was unsure, but that he would
find out. He said that he personally was
not reviewing this, as his Bureau would not be involved in this type of review.
Other difficulties that Ms. Loving faced in completing the
audit were described. She stated that
the lack of recordkeeping at Central Services with regard to this contract
presented the auditors with problems in attempting to get an understanding of
the reliability of SBC/AT&T’s records.
Revenue was being paid and reported by SBC/AT&T, however, if revenue
is being based upon a number, the auditors wanted to know if that number is
accurate. According to Ms. Loving, no
one in Central Services had been verifying that information.
She said that they were keeping track of it to some extent,
but their figures were inaccurate. When
the audit began, these inaccuracies were pointed out to them by the Auditor’s
Office. As a result, they proceeded to
try and recover some of those dollars.
Commissioner Quigley asked whether Crucial Communications
LLC is still being paid.
With regard to the overall contract, Ms. Loving replied that
the County is still on a month to month with SBC, until an RFP is completed.
Mary Jo Horace, Director of the Department of Office
Technology, stated that Crucial Communications LLC is still on as a
subcontractor, and that they have a staff person on site performing duties, and
a group of people working at a service center.
Commissioner Butler asked who was paying whom on this
contract.
Chairman Daley stated that SBC/AT&T pays the
subcontractor.
Chairman Daley then introduced Catherine Maras O’Leary,
former Chief Information Officer of
Ms. O’Leary began by reading a statement into the record
(Attachment #2).
There were conflicting views between Ms. O’Leary and the
Office of the Auditor as to certain findings and statements made with regard to
this audit, particularly with regard to the question of when the contract began
and whether monies are due to the County, and whether certain functions were
performed, such as recordkeeping and oversight on the billings.
Chairman Daley clarified the contract dates for the
Committee members, stating that the proposed contract which was to be submitted
for Board approval was received by the Purchasing Agent on
Chairman Daley was concerned with the possibility that the
County may be owed over $551,000. He
indicated that he would like to hear from the Administration about collection
or negotiation efforts with regards to this amount.
Commissioner Quigley was interested in gaining insight into
the specifics of how and to what degree Crucial Communications LLC is involved
in the day-to-day operations of this contract.
Commissioner Beavers asked permission for the County’s Chief
Information Officer, Antonio Hylton, to address the Committee.
Mr. Hylton recently received a letter from SBC/AT&T on
this subject, a copy of which will be submitted for the record. (See Attachment #3.)
This letter suggested that the twelve-month extension would not be
honored after the contract’s termination date of
As a result of Mr. Hylton’s negotiations with SBC/AT&T
in response to this letter, the contract will stay at the existing terms and
higher commission until October 1st. In
addition, a new RFP has been developed to take this to a competitive
procurement process.
Mr. Hylton indicated that there would be answers sought to
the question of whether the county is owed, and resolution of the matter is
expected.
Chairman Daley requested that Mr. Hylton report this
information back to the Committee Chair, who will then give the information to
the members of the Committee.
Vice Chairman Goslin,
seconded by Commissioner Gorman, moved to receive and file Communication No.
286860. The motion carried.
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287213 |
VETERANS’ ASSISTANCE COMMISSION OF submitting herewith a copy of the report on
the Veterans’ Assistance Commission of Cook County, Illinois for the period
ended Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on |
Chairman Daley asked Richard Morbidoni, Superintendent of
the Veterans’ Assistance Commission, if the issues brought up in the report
have been corrected.
Richard
Morbidoni responded affirmatively.
Vice Chairman Goslin,
seconded by Commissioner Butler, moved to receive and file Communication No.
287213. The motion carried.
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287211 |
DEPARTMENT OF SUPPORTIVE SERVICES - ADOPTION, WITNESS AND
TRAVEL FEES. Transmitting a
Communication, dated submitting herewith a copy of the financial
report of the Adoption, Witness and Travel Fees for the Department of
Supportive Services, Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on |
Vice Chairman Goslin,
seconded by Commissioner Butler, moved to receive and file Communication No.
287211. The motion carried.
|
287212 |
2005 submitting herewith a copy of the 2005 Cook
County Property Tax Extension and Breakdown Report. Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on |
Vice Chairman Goslin,
seconded by Commissioner Butler, moved to receive and file Communication No.
287212. The motion carried.
|
287210 |
LIQUOR CONTROL COMMISSION - LICENSE FEE AND ADVERTISING
FUND. Transmitting a Communication,
dated submitting herewith a copy of the financial
report of the License Fee and Advertising Fund for the Liquor Control
Commission, Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on |
Vice Chairman Goslin,
seconded by Commissioner Butler, moved to receive and file Communication No.
287210. The motion carried.
|
287209 |
COOK COUNTY GRANT REPORT TO THE ILLINOIS DEPARTMENT OF
HUMAN SERVICES. Transmitting a
Communication, dated submitting herewith a copy of the FY 2005
Cook County DHS Grant Report. The
Illinois Department of Human Services (IDHS) requires annual financial
reporting from providers which receive funding from IDHS. Included in Please accept this report and refer it to the Audit
Committee for review. * Referred to the
Audit Committee on |
Vice Chairman Goslin,
seconded by Commissioner Butler, moved to receive and file Communication No.
287209. The motion carried.
Vice Chairman Goslin
moved to adjourn the meeting, seconded by Commissioner Butler. The motion carried and the meeting was
adjourned.
YOUR COMMITTEE
RECOMMENDS THE FOLLOWING ACTION WITH REGARD
TO THE MATTERS NAMED
HEREIN:
Communication Number 287222 Received
and Filed
Communication Number 284059 Received
and Filed
Communication Number 284062 Received
and Filed
Communication Number 286481 Received
and Filed
Communication Number 286859 Received
and Filed
Communication Number 284060 Received
and Filed
Communication Number 287214 Received
and Filed
Communication Number 285947 Received
and Filed
Communication Number 285953 Received
and Filed
Communication Number 284405 Received
and Filed
Communication Number 286846 Deferred
Communication Number 286860 Received
and Filed
Communication Number 287213 Received
and Filed
Communication Number 287211 Received
and Filed
Communication Number 287212 Received
and Filed
Communication Number 287210 Received
and Filed
Communication Number 287209 Received
and Filed
|
|
Respectfully
submitted, Audit
Committee xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx John P.
Daley, Chairman |
Attest:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Matthew B.
DeLeon, Secretary
The transcript for this meeting is available from the Office
of the Secretary to the Board,