The Office of the Inspector General, Audit Division, has completed an audit of the Victims of Crime Act grants awarded by the U.S. Department of Justice (DOJ), Office of Justice Programs (OJP), Office for Victims of Crime (OVC), to the Illinois Court of Claims (Court), located in Springfield, Illinois. Between October 1, 2002, and April 30, 2006, the Illinois Court of Claims was awarded five grants, totaling $41,354,000. The main purpose of the grants was to help reduce the financial burden imposed on victims of violent crime and their families through payment for items such as medical and hospital related expenses, counseling, funeral and burial expenses, or loss of income related to the crime.
We tested the Court’s compliance with essential grant conditions, including grant drawdowns, grant expenditures, reporting, and accomplishment of grant objectives. We found that the grantee appeared to be meeting grant objectives and that the claim payments were properly authorized and fully supported.1 However, our audit revealed improper grant drawdowns, instances of unallowable and unsupported expenses in grants 2002-VCGX-0017 and 2003-VCGX-0013, as well as record-keeping and reporting deficiencies in all of the awards reviewed. As a result, we identified $450,792 in dollar-related findings from the fiscal year (FY) 2002 and FY 2003 awards.2
The OJP Financial Guide requires funds to be accounted for separately and not be commingled with other funds on either a program or project basis. Our review determined that it was the Court’s normal practice to deposit all grant funds into the state of Illinois’ General Fund. Although the Court maintained a separate accounting ledger related to the grant, only administrative costs were posted to this ledger.
According to OVC officials, grantees should be able to identify specific victim claim payments paid with Victims of Crime Act (VOCA) grant funds. However, neither the Court’s accounting records nor documentation in the paid claim files contained information on which claims were paid with federal funds. As a result of this practice, the grantee could not identify specific crime victim payments paid with federal funds.
The OJP Financial Guide requires grantees to ensure that the Federal cash on hand is the minimum amount needed for disbursements that will be made within a few days. Additionally, the OJP Financial Guide refers to the Cash Management Improvement Act which cites Title 31, United States Code, Section 6503. This statute requires that the States pay interest in the event that the States drawdown funds before the funds are needed to pay for program expenses. We determined that it was the grantee’s normal practice to draw down funds as advances to cover administrative expenses. We noted one instance where the advance covered costs for the following 10 month period. This practice of drawing down funds in excess of immediate need resulted in $3,598 in interest payable to the federal government.
The OJP Financial Guide states that OVC grant funds are available for use during the fiscal year in which they are awarded plus 3 additional fiscal years. Further, any funds not properly obligated within that period will lapse and revert to the awarding agency. The Court’s final drawdown for grant 2002-VCGX-0017 included $22,912 for transactions obligated and expended over a 2 month period after the grant end date. As a result, we question the $22,912 in grant funds that were not properly utilized in the period of availability.
Office of Management and Budget (OMB) Circular A-87 states that when employees work on multiple activities or cost objectives, the distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation. Our review found that although the grantee had previously developed a rate by which salary costs were allocated to the OVC grants and other Court work, the allocation methodology could not be substantiated and the grantee’s personnel records did not distribute the employees’ time by activity. Court staff stated that the allocation rate was based upon historical caseload distribution by activity, but records to support how the allocation was computed were not retained. As a result, the salary and fringe benefits charged to the grants were not fully supported and we question $399,333 ($296,582 in grant 2002-VCGX-0017 and $102,751 in grant 2003-VCGX-0013).
Between July 2005 and April 2006, the State transferred unobligated federal grant funds totaling $24,949 from the Court’s administrative VOCA grant account to the State’s General Fund. Court staff told us that they believed this occurred because the State was experiencing a cash flow problem and needed the funds to meet the State’s needs. The Court did not incur any expenses to support the State’s taking of these funds. Consequently, we question the $24,949 as an unsupported expenditure and unallowable use of grant funds.
The OJP Financial Guide requires that the Financial Status Reports (FSRs) contain actual expenditure and unliquidated obligation information. Our review found that the FSRs for all of the awards were improperly prepared because the data in the FSRs was based on draw down amounts and not expenditure information. Consequently, it was not possible for us to reconcile information reported in the FSRs to the grantee’s disbursement ledgers.
In response, the Deputy Court Administrator explained that the federal awards were treated as a reimbursement of State expenditures that were executed earlier in the fiscal year. As a result, Court officials believed that it was not necessary to separately account for the funds and instead deposited them directly in the General Fund.
Our report contains nine recommendations to address the preceding issues, which are discussed in detail in the Findings and Recommendations section of the report. Our audit objectives, scope, and methodology appear in Appendix I.
The Inspector General Act of 1978, as amended, contains our reporting requirements for questioned costs and funds to better use. However, not all findings are dollar-related. See Appendix II for a breakdown of our dollar-related findings and for definitions of questioned costs and funds to better use.