Audit of Illinois treasurer’s office finds $1.6 billion ‘understated’ in financial statements

[August 26, 2022]  By Greg Bishop | The Center Square

(The Center Square) – A recent audit of the Illinois Treasurer’s office shows several accounts understated $1.6 billion.

The report from the Auditor General for the fiscal year that ended June 30, 2021, said testing of financial statements show uncorrected duplicate deposits between the treasurer’s office and the office of the Illinois Comptroller.

“It was determined only the duplicate deposit portion of the reconciling items would have been double counted in the available cash balance reported by the [comptroller],” the report said.

The report was released in June and said state law requires financial reporting to be “properly recorded and accounted for to permit the preparation of accounts and reliable financial and statistical reports to maintain accountability over the State’s resources.”

Treasurer Michael Frerichs’ office said the finding was because of “incomplete information given to our office.”

Comptroller Susana Mendoza’s office accepted the finding and said it will work with the treasurer’s office on reports internal to the treasurer’s office.

State Rep. Tom Demmer, R-Dixon, who is challenging Frerichs in the November election, advocates to combine the treasurer and comptroller offices.

State Treasurer Michael Frerichs in Chicago.
Courtesy of BlueRoomStream

“But one thing that’s concerning with this I think is that after the auditor general has laid out, again, a repeat audit finding, repeated from last year, we only get a cursory explanation,” Demmer told The Center Square.

Frerichs, the incumbent Democrat, also supports combining the treasurer's and comptroller's offices.

Frerichs’ office said “audits help us do our jobs better” and the problem required a “routine accounting adjustment.”

Demmer said a recurring finding should not be discounted as “routine.”

“I think that given the seriousness of this, the dollar amount involved, $1.6 billion, the fact that it’s a repeated finding, I think that the people of Illinois deserve a more thorough explanation of what happened and what corrective steps are being taken to prevent it from happening again,” Demmer said.

The auditor general’s report said, “Strong management controls, due diligence and fiduciary responsibility require procedures to include proper checks and balances and adequate supervision to ensure proper financial reporting.”

Greg Bishop reports on Illinois government and other issues for The Center Square. Bishop has years of award-winning broadcast experience and hosts the WMAY Morning Newsfeed out of Springfield.