audit or gener alNSAA
Annual ConferenceJune 12, 2004
Management Audit of theIllinois State Toll Highway
Authority
NSAA EXCELLENCE IN ACCOUNTABILITY AWARDS
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Illinois Toll Road System
274 miles of roads 1.2 million vehicles each day
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How did we get here?
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TOLLWAY: Originally constructed in 1958 March 2002 Reconstruction Plan:
$5.5 Billion; 88% toll increase
“The Authority has seen years of financial mismanagement, cost overruns, wasteful expenditures and poor planning….”
“It presented its 20-year, $5.5 billion plan to rebuild and extend tollways on a single sheet of paper….”
“To get public input … it arrogantly scheduled 12 different hearings all on the same night, at the same time.”
“Before one barricade or detour sign goes up or shovelful of concrete is poured, the Illinois State Toll Highway Authority has a far more urgent patch-up job: its credibility.”
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Chicago Tribune editorials:
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How did we get here?
THE PHONE CALL
President of the Senate
Historically, Tollway has not been anxious for oversight by anyone
Audit Resolution passed the Senate on May 21, 2002 and the House on June 2, 2002
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How did we get here?
One other minor detail…
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The Resolution requiredthe audit to be completed within
one year of its passage.
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Challenges:
Open-ended resolution:
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Determine whether the Toll Highway Authority is managing or using its resources in an economical and efficient manner
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Challenges:
Large complex agency:
1,900 employees
$379 million budget
Technical areas, such as bonds, construction, etc.
Under intense public scrutiny
200 miles away from Springfield Office
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What we did:
Divided the Tollway into18 functional areas, such as personnel, planning, contracting, real estate, etc.
Made one staff person responsible for each of these areas (staff had multiple areas)
Clearly defined responsibilities; staff development
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Organizational Chart of OAG:
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ASSISTANT TOAUDITOR GENERAL: CLARKE
CULLY – Graphic DesignerHAMILTON – Office Mgr.
LIVINGSTONE – SecretaryBRADLEY – Messenger Clerk
EXECUTIVE SECRETARY:
SMITH
DEPUTY AUDITOR GENERALSJOHN W. KUNZEMAN
CHARLES G. WOODWARD
FISCAL OFFICER: PAPE
LEONARD – Sr. Fiscal Asst.WALKER – Admin. Specialist
LEGAL COUNSEL: PATTON
DAHLQUIST – Admin. Mgr.WALKER – Admin. Specialist
AUDITOR GENERAL
WILLIAM G. HOLLAND
FINANCIAL/COMPLIANCE
DIRECTOR: BULLARDASST. DIRECTOR: STEPHENS
StilesAppelbaumCarhillUsherwoodRuddLabonteClarkKizziahDavisFoxWardenLongCampbellHartsonBallion
DzierwaOliveSchertzTaylorJohnsonKirkNwosuProhaskaKingSullivanEricksonFallerMcDowellSmith, A.
INFORMATION SYSTEMS
DIRECTOR: SAMPIAS
DevittHumphriesLovejoyGudgelWagnerMehochkoFrench
PERFORMANCE
DIRECTOR: SCHLOUCH
DadaWittrockMittelstaedtMaziarzPaoniHeltonWahlbrinkPetersButcherFlessner
BaptistBarkerGlahnAllenRobertsBrownWegerCorsLydigsen
Organizational Chart of OAG:
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ASSISTANT TOAUDITOR GENERAL: CLARKE
CULLY – Graphic DesignerHAMILTON – Office Mgr.
LIVINGSTONE – SecretaryBRADLEY – Messenger Clerk
EXECUTIVE SECRETARY:
SMITH
DEPUTY AUDITOR GENERALSJOHN W. KUNZEMAN
CHARLES G. WOODWARD
FISCAL OFFICER: PAPE
LEONARD – Sr. Fiscal Asst.WALKER – Admin. Specialist
LEGAL COUNSEL: PATTON
DAHLQUIST – Admin. Mgr.WALKER – Admin. Specialist
AUDITOR GENERAL
WILLIAM G. HOLLAND
FINANCIAL/COMPLIANCE
DIRECTOR: BULLARDASST. DIRECTOR: STEPHENS
StilesAppelbaumCarhillUsherwoodRuddLabonteClarkKizziahDavisFoxWardenLongCampbellHartsonBallion
DzierwaOliveSchertzTaylorJohnsonKirkNwosuProhaskaKingSullivanEricksonFallerMcDowellSmith, A.
INFORMATION SYSTEMS
DIRECTOR: SAMPIAS
PERFORMANCE
DIRECTOR: SCHLOUCH
DadaWittrockMittelstaedtMaziarzPaoniHeltonWahlbrinkPetersButcherFlessner
BaptistBarkerGlahnAllenRobertsBrownWegerCorsLydigsen
DevittHumphriesLovejoyGudgelWagnerMehochkoFrench
Identified need for additional assistance – both “grunt work” and technical
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What we did:
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Used public accounting firm doing our financial audit of the Authority to assist in personnel, contract, and expenditure testing ($26,250)
GRUNT WORK:
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What we did:
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Obtained assistance in areas of road reconstruction, benchmarking, capital planning, from consultant who had done work for other toll roads ($112,835)
TECHNICAL:
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What we did:
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What we did: Contacted the Economic and
Fiscal Commission and the Illinois Gaming Board
Entered into Intergovernmental Agreements
Provided assistance at no charge to us
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What we did:
Used e-mail and electronic file transfers as much as possible to reduce travel cost and time – also helped with documentation
Surveyed 964 Tollway employees
Surveyed 32 toll road organizations in United States and Canada
Results were very valuable; did extensive benchmarking from the survey results
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An Intervening Event
Elections held in November 2002
Democratic Governor elected for the first time in 28 years
Governor-elect had made the “inefficient” Tollway an issue in the campaign
New Executive Director was open to change and accepted most of the 23 recommendations made in the report
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Legislative Audit Legislative Audit CommissionCommission
September 19, 2003September 19, 2003
Management Audit
ILLINOIS STATETOLL HIGHWAY AUTHORITY
Capital Planning
Regarding the $5.5 billion reconstruction plan:
Some supporting documentation was not prepared until we requested the back-up
Cost estimates prepared by the Tollway’s contractual engineering firm were not reviewed by Tollway staff
3A
Capital Planning
The $5.5 billion cost estimate was thehigh end cost estimate and less costly alternatives existed
4A
Uncollected Tolls
In 2002, the Tollway did not collect $11.2 million in tolls, or 3% of estimated toll revenue
Tollway’s 3% uncollected rate was among the highest of tolls roads we surveyed
7A
0%
3%
6%
9%
12%
15%
18%
UNCOLLECTED TOLLSDecember 2002
16.2%
Unattended Automatic
Lanes
6.0%
I-PASS OnlyLanes
ManualLanes
.3%
8A
Counting of Tolls
We recommended improvements in the Tollway’s collection and counting of tolls:
Limiting access to the Money Room, vault, currency counting areas
Improving Money Room video surveillance
9A
Bonds
Recommended Tollway look at refinancing certain bonds
Subsequent to the audit’s release, the Tollway refinanced bonds, saving $600,000
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Benchmarking
Compared the Tollway’s performance with that of other toll roads
11A
Total Staff Per Lane Mile
0
0.5
1
1.5
2
2.5
12A
$0.00$0.02$0.04$0.06$0.08$0.10$0.12
$0.14$0.16$0.18
Average Toll Rate Per Mile
6A
Percent of Electronic Toll Collection
0%
10%
20%
30%
40%
50%
60%
70%
13A
audit or gener alNSAA
Annual ConferenceJune 12, 2004
Management Audit of theIllinois State Toll Highway
Authority
NSAA EXCELLENCE IN ACCOUNTABILITY AWARDS