‘Central Management Services Department – Financial Audit’ – InsuranceNewsNet

SPRINGFIELD, Ill., June 10 (TNSRep) – The Illinois Auditor General released the financial audit following the June 9, 2022involving the Department of Central Management Services:

Here are excerpts:

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The Department did not adequately monitor the billing of Professional Services Fund and the Health insurance reserve fund.

During testing of internal service fund billings, amounts due from other agencies, and amounts due from component units, we noted the following:

* Several State agents are collectively represented by the Downstate Teamsters, Cook County Teamsters Local No. 700, Fox Valley Teamsters Local No. 330 and Teamsters Local No. 916 at:

* Department;

* Department of Corrections (DOC);

* Department of Innovation and Technology (Do it); oh Department of Social Services (DHS);

* transport department (POINT);

* Illinois State Police (ISP), which are paid by the ISP, Illinois Gaming Board (IGB), Illinois State Turnpike Authority (ISTHA) and DOT;

* Department of Veterans Affairs (DVA);

* Department of Natural Resources (MRN); and,

* Employment Security Department (covered position currently vacant).

In accordance with the various agreements, these employees covered by these agreements may choose not to benefit from the health coverage of the State Employees’ Collective Insurance Scheme (SEGIP) and to benefit from the health coverage of their employees through the union system. Retiring employees will participate in SEGIP for life, dental, and vision insurance benefits as employees, then transition to SEGIP for all of their other post-employment benefits (OPEB), including healthcare, retirement. In order to pay the unions for the health costs of these employees, SEGIP initially pays the union and the Department then prepares additional billings for SEGIP to recover these costs and collect the associated retiree portion of group insurance contributions for the SEGIP with the employer of each employee. These payments are made to Health insurance reserve fund.

From June 30, 2021, $6,522,614 additional billings were due to the Ministry. We noted that the Department did not actively monitor its amounts owed by several state agencies and ISTHA to ensure amounts owed were collected in a timely manner. For example, we found that six out of nine agencies (67%) made no payments or made payments significantly lower than what was due since 2018.

After these matters were brought to the attention of the Department, $3,735,687 was collected for these billings by December 2021.

* The Department is developing fees for professional services to be paid to the Professional Services Fund using expenditures for the last full fiscal year, calculating a percentage of total expenditures, and then prorating the amounts to organizations by fund and dollar amount that receive professional services from the Ministry. This percentage is then multiplied by the annual professional services budget to determine the amount billed to each agency. During testing, we noted that agencies receiving professional services from the Department were being billed based on established percentages for fiscal year 2020 instead of fiscal year 2021. This resulted in 41 of 45 (91%) agencies receiving professional services from the Department were billed the wrong amount. The amounts under-billed to agencies ranged from $200 at $269,200and the amounts overcharged to agencies ranged from $200 at $704,900. (Conclusion 2, pages 67-69)

We recommended the Department ensure that internal service fund billings are correctly calculated and follow up on unpaid bills in a timely manner.

The Department accepted the finding and recommendation. The Department stated that it has implemented processes and procedures to monitor and track Internal Services Funds billings in a timely manner to ensure agencies pay these bills within the fiscal year. where the liability is incurred. With respect to billing for professional services, the Department stated that it has updated its procedures and review processes to ensure that billing is correctly calculated.


The Department did not have a reconciliation process to provide assurance that the census data submitted to its pension and other post-employment benefit (POB) plans was complete and accurate.

During testing, we found that the Department had not performed a full first reconciliation of its census data recorded by the State Employees Retirement System of Illinois (SERS) and the Benefits office within the state of Illinois, Department of Central Management Services (Bureau) personnel files of departmental employees to establish a base year of complete and accurate census data.

After establishing a base year, the Department had not developed a process to annually obtain from SERS and CMS the incremental changes recorded by SERS and CMS in their census data records and reconcile those changes with internal records. of the Department. (Conclusion 3, pages 70-72)

We recommended that the Department work with SERS and its Office to develop a process for annual reconciliation of its active members’ census data from the Department’s underlying personnel records to a report of each census data plan submitted to plan actuary. After performing a first full reconciliation, the Department may limit the annual reconciliation to focus on incremental changes to the census data file from the previous actuarial valuation, provided no risk is identified that a incomplete or inaccurate reporting of census data may have occurred in previous periods. .

The Department agreed with the finding and recommendation and stated that Personnel office (BoP) has completed the initial reconciliation of census data. BoP is prepared to ensure that annual reconciliations are done in conjunction with SERS.


The remaining finding relates to the failure to determine the premiums that allow for the establishment of a strong actuarial reserve for the community college health insurance program.

We will review the Department’s progress in implementing our recommendation during our next financial audit.


The auditors have prepared the Department’s financial statements as of and for the year ended June 30, 2021are stated fairly in all material respects.

This financial audit was carried out by Sikich LLP.

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The report is published at http://www.auditor.illinois.gov/Audit-Reports/Compliance-Agency-List/CMS/FY21-CMS-Fin-Digest.pdf

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