Delinquent Financial Reporting Puts Orland At Risk For Forced Audit: Comptroller

ORLAND PARK, IL — After falling delinquent on its 2022 and 2023 financial reporting, the Village of Orland Park is under a tight deadline to take steps to show compliance, or risk a forced audit by the Illinois Comptroller's Office, a notice from the office shows.

In a letter dated Sept. 18 and issued to Mayor Keith Pekau and Finance Director Chris Frankenfield, the director of the Comptroller's tighter-focused Local Government Division stated the office "has the statutory obligation to facilitate the financial reporting process for local governments, and to assist local governments in complying with their mandated fiscal responsibilities."

Local governments are required by law to file an Annual Financial Report (AFR), Audit Report and Tax Increment Finance reports. Reports not filed in a timely manner are considered delinquent, wrote Director Rosanna Barbaro-Flores, and "consequently subject to fines and forced audit."

As the office prepares to assign such forced audits for fiscal year 2022, with fiscal year 2023 to follow, the letter advises the Village of Orland Park has until Oct. 17 to respond to the notice and include their:

• reason for non-compliance: "due to natural disaster or passage of time, including detailed explanation or any available supporting documentation."
• compliance plan, including a proposed compliance date. If a certified public accountant will be used to fulfill compliance, proof of contract must be supplied.
• reasons the Village disagrees with the non-compliant status.

If the Village fails to respond on time, it could undergo a forced audit, and would also be temporarily suspended from the Local Debt Recovery program on Oct. 17, the notice reads.

In response, the Village has since informed the Comptroller's Office that it has enlisted the services of CPA Sikich LLC to complete its 2022 and 2023 audits. The former is expected to be completed by Oct. 31, a representative from the firm said in a letter attached to the response. The 2023 audit is estimated to be completed by March 31, 2025.

In the Village's response obtained by Patch, Village of Orland Park Finance Director Chris Frankenfield cited reasons for the delinquencies including staff turnover and loss of institutional knowledge dating back to 2021, in addition to a firm merger that delayed the completion of its 2021 reports, transition to a new finance management system, and staffing disruptions—namely, the resignation of the Village's finance director in June 2024.

"These circumstances, while not a natural disaster, constitute unique and exceptional challenges that impacted the Village's ability to comply with reporting requirements within the mandated timeframe," Frankenfield wrote.

In addition to hiring Sikich LLP, he said, the Village has restructured its finance department, "hired permanent and qualified staff, and implemented new internal controls" to ensure the Village meets its requirements moving forward.

The Village does not dispute the delinquent status, he wrote, yet "we disagree with any implication the Village has been negligent in addressing its financial obligations."

Frankenfield again pointed to delays caused by external auditors in addition to transitioning to a new system as "extraordinary, unavoidable challenges."

Frankenfield also asked that the Comptroller reconsider the forced audit, "in light of our ongoing progress, the detailed compliance plan provided, and the engagement of Sikich LLP to ensure timely completion of the necessary reports."

In a phone call, Frankfenfield declined comment to Patch.