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McGladrey LLP ne South Wacker Dr, Ste, 800, Chicago,IL 60606 McGladrey Sew meglodey com July 29, 2015 To the Honorable President and Members of the Board of Trustees Village of Oak Lawn, Ilinois In planning and performing our audit of the basic financial statements of the Village of Oak Lawn, Illinois, (‘Village’) as of and for the year ended December 31, 2014, in accordance with auditing standards generally accepted in the United States of America, we considered the Village's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, we do not express an opinion on the effectiveness of the Village's internal control Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies, {A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the following deficiencies in the Village's internal control to be material weaknesses INTERDEPARTMENTAL COMMUNICATION — POLICE AND FINANCE ‘There was a lack of effective communication between the police department and finance department related to the federal funds, particularly those associated with the Department of Justice equitable sharing funds and the OCDETF Strikeforce ("Strikeforce"). Because state, local, and federal funds are commingled in one cash account in the Village's general ledger, the identification of the federal portion of equitable sharing funds was not readily available. In addition, from September 2012 through August of 2014, the Village held funds on behalf of the Strikeforce and the police department functioned as the administrator. There were several transactions that occurred between the Village's equitable sharing funds and the Strikeforce and documentation was not readily available by the police department. When departments outside finance authorize usage of federal monies, policies and procedures must be developed so there are controls in place to verify compliance with laws and regulations. In addition, unbeknownst to the finance department, in August 2014, paperwork was signed by the police department and approximately $1.1 million of former Strikeforce money was turned over to the Village. The finance department was not aware of this until 2015. We suggest the Village develop a set of, policies and procedures specific to funds administered by departments other than the finance department ‘Ata minimum, purchases must go through the traditional accounts payable process of the Village. Bank reconciliations should be performed on a monthly basis and reviewed by a member of management. easing turand conmslnngiiens Village of Oak Lawn, Illinois July 29, 2015 Page 2 Management's Response: Management is currently working with contacts at the Department of Justice to determine the correct course of action related to these funds. Management is also in the process of developing procedures related to funds administored by other departments.