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CAFR finally released

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Illinois

* Comptroller Susana Mendoza’s office…

The Comprehensive Annual Financial Report (CAFR) released today shows Illinois cut its general funds deficit by $6.849 billion — from a deficit of $14.612 billion in fiscal year 2017 to a deficit of $7.763 billion in fiscal year 2018. That is largely because of a refinancing of state debt from high-interest to low-interest repayment.

The state’s total assets were approximately $53.9 billion on June 30, 2018, a decrease of $400 million from June 30, 2017. The state’s total liabilities were approximately $248.1 billion on June 30, 2018, an increase of $33.3 billion from June 30, 2017. The state’s largest liability balances are the net pension liability of $133.6 billion and the other post-employment benefits liability of $55.2 billion.

Health and social services expenditures of $29.2 billion comprised the largest expenditure function for fiscal year 2018, decreasing by $1 billion from fiscal year 2017. The second-largest expenditures, education expenditures, including spending for elementary and secondary education as well as higher education, totaled $25.4 billion, an increase of $3 billion, or 14%, from fiscal year 2017.

The Illinois Office of Comptroller compiles the CAFR from reports submitted by individual state agencies that are required to be audited by the Auditor General’s Office. If any of those audits is not complete, the Office of Comptroller cannot publish the CAFR. Since December, the Office of Comptroller has been ready to publish the CAFR as soon as the remaining audits were completed.

A primary reason for delay in the release of the fiscal year 2018 CAFR was the need for the new administration to try to piece together data lost by an IT vendor working for the previous administration’s departments of Healthcare and Family Services and Human Services.

As the Illinois Office of Comptroller noted in a June 28, 2018, report, four months’ worth of long-term care eligibility findings in 2017 were missing. (see attached report)

Comptroller Susana Mendoza said the prior administration relied too heavily on third-party non-government contractors to perform sensitive data conversions without adequate monitoring controls from state agency officials.

“We should not expect outside consultants to perform critical government functions, especially regarding data involving eligibility determinations under the state’s Medicaid program serving the state’s most vulnerable citizens, without adequate controls to protect the state’s program and ultimately state taxpayers,” Comptroller Mendoza said.

In April, Comptroller Mendoza announced her office would institute new contract reporting requirements for IT vendor agreements of more than $5 million. The new Information Technology Milestone Report rules require state agencies to publish progress and performance updates on ongoing IT initiatives, precisely to avoid data losses like this.

In addition to the missing data the Auditor General’s Office encountered at the departments of Healthcare and Family Services and Human Services, late adjustments relating to receivables were required as a result of the audit of the Department of Employment Security.

Comptroller Mendoza agrees with a repeated finding by the Auditor General’s office that the state needs a coordinated financial reporting system. However, it is important to note that was not a primary reason for this year’s delay.

The attached report is here. The CAFR is here.

posted by Rich Miller
Thursday, Aug 29, 19 @ 10:17 am

Comments

“to try to piece together data lost by an IT vendor working for the previous administration’s departments of Healthcare and Family Services and Human Services.” The financial ERP will make it even worse.

Comment by Anyone Remember Thursday, Aug 29, 19 @ 10:23 am
== That is largely because of a refinancing of state debt from high-interest to low-interest repayment. ==

Where would we be today if this was done 4 years ago? Or 6 years ago?

Comment by Hamlet's Ghost Thursday, Aug 29, 19 @ 10:27 am
The state’s total liabilities were approximately $248.1 billion on June 30, 2018, an increase of $33.3 billion from June 30, 2017. The state’s largest liability balances are the net pension liability of $133.6 billion and the other post-employment benefits liability of $55.2 billion.

No plans from JB or the Democrats to address either issue. Just a lot of back slapping about all of their “accomplishments” last session

Comment by Lucky Pierre Thursday, Aug 29, 19 @ 10:32 am
Another walk down the GovJunk memory lane nightmare. SpankyBaise must be so proud

Comment by Annonin' Thursday, Aug 29, 19 @ 11:07 am
= The financial ERP will make it even worse. =

That is true if DoIT adopts the Bhatt / O’Toole approach of forcing agencies to work within the limitations they decide will be the final product. The cluster CIOs need to stand up for the needs of their agencies. A few agencies have found themselves in trouble with the Feds because they could no longer produce financial reports required by law.

= Comptroller Mendoza agrees with a repeated finding by the Auditor General’s office that the state needs a coordinated financial reporting system. =

After years of roll out deadlines trumping practical needs and political gamesmanship, perhaps we are now finally back to where we were in 2010 when Quinn, Holland, and Topinka recognized this was a problem and causing the CAFR’s abundant tardiness.

= four months’ worth of long-term care eligibility findings in 2017 were missing. =

This is a fire. The Legislature really needs to grasp how big it is before the roof collapses. There needs to be a serious discussion regarding presumptive eligibility and why the new eligibility system is failing the way it is. I talked to a provider just the other day who said they prefer to deal with the OIG instead of DHS.

Think about that for a moment.

Comment by Bertrum Cates Thursday, Aug 29, 19 @ 11:13 am
I’ve heard the ERP disaster is growing … and will get even worse with the edict to have all.sgrncied participating by the end of the year.

Comment by RNUG Thursday, Aug 29, 19 @ 11:21 am
How do we not get the big revenue streams of the wealthiest paying a higher income tax, so we can have the money to begin paying down our massive pension debt? That has to be a top policy priority, if not the top priority, for Democrats in 2020, the campaign for the graduated income tax amendment.

Comment by Grandson of Man Thursday, Aug 29, 19 @ 11:37 am
Total OPEB liability as a percentage of covered-employee payroll:

539.19%

Nothing to see here.

Comment by City Zen Thursday, Aug 29, 19 @ 12:48 pm
===No plans from JB or the Democrats to address either issue. Just a lot of back slapping about all of their “accomplishments” last session===

Rauner for a whole GA went without *any* budget. Two years.

That’s one heck of an accomplishment.

Comment by Oswego Willy Thursday, Aug 29, 19 @ 12:52 pm
@LP… so you are saying there were no tax or fee increases during the last session? And they didn’t put on the ballot an amendment for a progressive tax?

Those may not be your preferred ways of dealing with debt, but they are actions to reduce the debt by bringing in more revenue.

Certainly Rauner’s continuous denial of a revenue problem for Illinois didn’t help him win re-election.

Comment by A Jack Thursday, Aug 29, 19 @ 1:14 pm
In the 2015 CAFR, OPEB was $33.051 billion. In the 2018 CAFR, it was $55.178 billion. An increase of 67% in 3 years. And unlike pensions, which have already had costs curbed for the future with Tier 2, there is no plan in place to curb future OPEB costs. Scary.

Comment by Smalls Thursday, Aug 29, 19 @ 1:25 pm
Smalls - The large increase was due to OPEB accounting rules changes. Search for “GASB Statement No. 75″ in the report for details.

Of course, this is just another way of saying the liability was understated all these years.

Comment by City Zen Thursday, Aug 29, 19 @ 1:41 pm
===No plans from JB or the Democrats to address either issue==

Hey Mr Wizard. That increase was under Rauner. You want to address that tidbt? Of course not. Bot

Comment by Demoralized Thursday, Aug 29, 19 @ 3:11 pm
Mr Wizard recalls the former Governor asking the Speaker to pass bipartisan pension legislation that passed the Senate and was never voted on in the House that would have saved over 1 billion a year.

How is that for a tidbit?

Comment by Lucky Pierre Thursday, Aug 29, 19 @ 3:15 pm
===was never voted on in the House===

Rauner never had 60 votes.

Had he the 60 votes, he would’ve put them on the stairs.

- Lucky Pierre -

All this defending of “Rauner Faux History”, how angry, upset, saddened are you keeping this up, even now, for a man who was looking to avoid running in the General Election?

The man wanted to walk away, was “done”, and here you are defending a man who wanted to quit… and bragged about it?

Boy, I’d either be embarrassed or sad I keep defending this person.

Comment by Oswego Willy Thursday, Aug 29, 19 @ 3:23 pm
Rauner Faux history about the Democrats addressing the explosion in pension and retiree health care liability?

How sad you mock any attempt to reform anything about government spending constantly and ignore the prior 12 years of total control of Springfield before Rauner.

Comment by Lucky Pierre Thursday, Aug 29, 19 @ 3:35 pm
- Lucky Pierre -

So you’re *not* embarrassed or think it’s sad that you defend a man who wanted to bail.

I’ll be embarrassed *for you*

LOL

(As an adult, i use “lol” daily)

Comment by Oswego Willy Thursday, Aug 29, 19 @ 3:41 pm
LP

How sad you totally ignore Rauners incompetence. I don’t recall ever ignoring the Democrats. What I do recall is you constantly babbling on about how Rauner was just a victim

Comment by Demoralized Thursday, Aug 29, 19 @ 5:42 pm
== ignore the prior 12 years of total control of Springfield before Rauner. ==

They may have had a D behind their name, but given the often advesarial relationship between Blago and the General Assembly, and even Quinn to some extent, it is hard to argue complete control for 12 years.

Comment by RNUG Thursday, Aug 29, 19 @ 7:43 pm