Auditor General Opinions

Chicago South Shore and South Bend Railroad

A compliance audit of the Chicago South Shore and South Bend Railroad showed that the railroad had overstated its operating deficit by $6,868,224 in the 18 months ending June 30, 1980. In reports filed with the Regional Transportation Authority (RTA), which funds 18 percent of the railroad's operating deficit, the South Shore listed deficits which included state income taxes as expenses and did not show subsidies as income. According to the auditor general, both practices were contrary to South Shore's agreement with the RTA. Responding to the audit, the railroad said that the language of its agreement with the RTA was never intended by either party to include passenger subsidies.

The auditor general's report recommended that the South Shore refund $1,236,280 — 18 percent of its operating deficit — to the RTA. The report also recommended that the South Shore and the RTA review the subsidy to determine a fair rate of funding for the railroad's operations in Illinois.

Teachers' Retirement System

The Teachers' Retirement System of Illinois has established a "centralized accounting department" in response to a recommendation contained in a compliance audit for the year ending June 30, 1980. The auditor general found that the system, which has 136,750 members, had repeatedly used its internal auditor for end-of-fiscal-year accounting duties because it did not have the staff to complete the heavy year-end accounting workload. This "impairs the effectiveness" of the internal auditor, since it results in his having to audit his own work. The retirement system has now hired a new internal auditor and has assigned the previous one solely to accounting duties.

February 1982/Illinois Issues/25