From AP - News Headlines -

Audit Criticizes Archaic Ill. Accounting Systems

Illinois officials who promise to keep an eye on every tax dollar are trying to do it with 263 different systems for tracking money, including many that are old and incompatible, according to a report Thursday.

Auditor General William Holland said auditors found state agencies 24 different systems just for handling payroll.

Half of state government's financial reporting systems are more than 10 years old. Many are more than 20 years old, which Holland called "archaic.''

More than half the systems cannot share information. Dollars and cents have to be entered manually when transferring data, which increases the risk of mistakes.

State legislators were stunned by the audit's findings.

"I think it's disastrous. What private company with revenues of $33 billion wouldn't have a unified accounting system?'' said Sen. Chris Lauzen, R-Aurora, an accountant. "It's obvious that state government fiscal matters are in chaos.''

Rep. Jack Franks, head of the House State Government Administration Committee, called it "critically important'' for Illinois to track money carefully. He said the accounting systems are probably contributing to massive budget problems.

"It sounds almost Soviet-style, where nothing works,'' said Franks, D-Marengo.

State spending is under more scrutiny than ever as Illinois tries to climb out of the worst budget hole in its history. Officials passed a tax increase last month, but still face a deficit that could approach $10 billion.

A list in the audit shows agencies using everything from huge computer systems to personal finance programs such as Quicken to paper ledgers. One agency had a process labeled "egg inspection receipts.''

"We've got multiple systems that do not deliver in an efficient way, and they need to be replaced. There's no question about it,'' Holland said in an interview with The Associated Press.

The report did not estimate how much the financial systems cost the state because of errors or confusion. But auditors did note that 17 percent of agencies provided figures on what it costs to enter duplicate data in different systems. The cost just for that portion of state government was $11.3 million.

It takes Illinois more than a year to compile a final spending report after each budget ends, auditors said.

Bond-rating agencies, who help determine how much the state pays to borrow money, object to financial reports coming out late, the report said. One agency, Moody's, has twice cited late reports as part of the reason it lowered Illinois' rating.

Late financial reporting also can endanger the state's federal funding or trigger increased federal scrutiny of Illinois programs, the audit said.

Auditors recommended that state agencies under the governor's control work with the Illinois comptroller to improve financial reporting.

Bradley Hahn, spokesman for new Comptroller Judy Baar Topinka, said they "wholeheartedly agree with the recommendations, and we look forward to working with the governor's office to implement them.

Categories: Economics, Government, Politics