The City of Chicago Office of Inspector General (OIG) has completed a follow-up to our January 2019 audit of the Chicago Board of Election Commissioners (CBOEC). Based on the Board’s responses, we conclude that CBOEC has fully implemented five of the nineteen audit recommendations, substantially implemented five, partially implemented five, and not implemented four.
The purpose of the 2019 audit was to determine whether CBOEC employed sufficient financial controls to prevent waste, fraud, and abuse; whether its human resources program was designed to support its mission; and whether it maintained a contingency plan to ensure continuity of operations in the event of attack or disaster.
Our audit found that CBOEC spent taxpayer money on unnecessary expenses, and both overcharged its funders—the City of Chicago and Cook County—and caused them to record financial transactions incorrectly. Some of CBOEC’s employees were not receiving benefits to which they may have been entitled. CBOEC did not budget accurately for personnel, and its hiring, compensation, and succession planning activities did not align with best practices. Lastly, CBOEC could not assure the public that it would be able to maintain election operations in the event of an attack or disaster. Although CBOEC was informed of several of these problems in May 2009, CBOEC did not follow through on many of the corrective actions it committed to undertake.
Based on the results of the audit, OIG made recommendations aimed at improving CBOEC’s fiscal administration, bringing its hiring, compensation, and employee succession programs into alignment with best practices, and establishing plans to ensure the safety and reliability of elections in the event of catastrophe. CBOEC provided a set of preliminary responses to the audit’s recommendations on January 16, 2019, and committed to providing a final response by May 31, 2019. However, OIG never received a final response from the Board.
In September 2019, OIG inquired about the status of CBOEC’s corrective actions in response to the audit. The Board provided a response to OIG’s inquiry in October but did not respond to our subsequent requests for clarification until February 2020.
Based on CBOEC’s responses, OIG concludes that CBOEC fully implemented five of the nineteen audit recommendations, substantially implemented five, partially implemented five, and not implemented four.
Regarding its financial practices, CBOEC has acquired access to the City’s electronic financial system; returned unused grant funds to the State of Illinois; discontinued the practice of allowing its commissioners to accrue vacation time; and begun reporting its executive director’s vacation time to the County. Additionally, CBOEC has begun reconciling its transaction logs and regularly depositing revenue; begun using proper appropriation codes in its budget requests; received a refund from the County for an hourly payroll miscalculation; created an initial inventory of its contracts; and improved its purchasing rules. CBOEC also stated that it has segregated its internal payroll duties and reduced its reliance on sole source procurements.
Regarding its human resources program, CBOEC stated it has analyzed its obligations under the Affordable Care Act and chosen to end its practice of employing hourly workers. CBOEC also updated its Employee Handbook, developed an employee performance management program with criteria for salary increases, and committed to finalizing job descriptions for “key/critical positions.” Finally, CBOEC created a detailed contingency plan and inventory of its IT hardware and software.
Once fully implemented, OIG believes the corrective actions reported by CBOEC may reasonably be expected to resolve the core findings noted in the audit. We urge CBOEC to fully implement remaining corrective actions, including,
• undergoing regular independent audits,
• developing financial policies,
• requesting access to the County’s electronic financial system,
• eliminating its non-payroll checking account or implementing a centralized financial system,
• documenting a cost allocation framework in an intergovernmental agreement with the City and County,
• developing information systems controls that segregate payroll duties,
• issuing refunds to the City and former hourly employees for payroll miscalculations,
• conducting an organization-wide staffing analysis, and
• developing a comprehensive hiring policy that defines hiring roles.