Illinois’ Obsolete Financial Reporting Systems Waste Money, Jeopardize Bond Rating, Senate Hearing Warns

(Springfield, IL) – March 9, 2011. An Illinois State Senate panel held a special hearing on Wednesday to tackle a new report by the state’s auditor general claiming Illinois’ more than 260 separate financial reporting systems are a disorganized, disconnected, obsolete mess and that they waste taxpayer money and even jeopardize the state’s bond rating.

“The State of Illinois’ current financial reporting system is comprised of over 260 individual financial systems, ranging from manual spreadsheets to computerized databases,” Illinois Auditor General William Holland said, commenting on his year-long investigation.

Listen to Holland’s comments on WBBM Radio 780:

“The majority of these systems are not interrelated, and half are over 10 years old.”

“This isn’t something that can be solved overnight,” said State Senator Linda Holmes (D-Aurora), Chair of Senate State Government and Veterans’ Affairs Committee. “It’s an ongoing process, but we need to start laying the groundwork now and come up with a reasonable goal to accomplish down the road.”

Republican Comptroller Judy Baar Topinka testified at the hear on the need to modernized the state’s accounting systems and thanked Holmes for airing the issue at a committee hearing.

“With 263 different financial reporting systems in place, our state’s network is woefully inadequate and in need of a massive upgrade,” Topinka said. “Senator Holmes understands the importance of this issue, and I appreciate her leadership in bringing it before the committee.”

Currently, Illinois requires more than a year to compile a final spending report. And late financial reporting can potentially endanger federal funding opportunities or even hurt the state’s bond rating, according to Holmes.

Holland says Governor Pat Quinn and Topinka’s offices need to assemble a plan to fix the state’s accounting problems.

“We recommended that the Governor’s Office and the Office of the Comptroller should develop and implement a plan to correct the problems with the current financial reporting process and begin overhauling the State’s financial reporting system,” Holland said.

Sean Vinck, chief information officer for Quinn, said, “It’s a management solution and it’s a technology solution. It’s a long-term process that carries risks and rewards.”

“We cannot afford to put off these much-needed improvements any longer,” Holmes added.

The committee pledged to create a task force to help address the problem.