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90_HR0022
LRB9002479DNmb
1 HOUSE RESOLUTION
2 WHEREAS, The use of certificates of participation
3 prevents lawmakers from reviewing projects before the General
4 Assembly is requested to pay for them; and
5 WHEREAS, Certificates of participation are being used
6 for more than $175,000,000 worth of building projects; and
7 WHEREAS, Certificates of participation require a
8 nonappropriation clause that states that if the General
9 Assembly does not appropriate money for the lease payments,
10 the purchase contract is subject to termination and
11 cancellation; and
12 WHEREAS, Certificates of participation have higher
13 interest rates because of the required nonappropriation
14 clause and require bond insurance or a bank letter of credit
15 to accompany the certificate; and
16 WHEREAS, Other funding options that allow General
17 Assembly review should be used to finance State building
18 projects; therefore be it
19 RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE NINETIETH
20 GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that the Auditor
21 General is directed to conduct a management audit of the
22 State's use of certificates of participation; and be it
23 further
24 RESOLVED, that the audit shall include, but need not be
25 limited to, the following:
26 (1) for each issuance of a certificate of participation,
27 whether the State determined the financial desirability of
28 issuing the certificates before their issuance and, if so,
29 what factors were considered;
30 (2) whether the Department of Central Management
31 Services or the Bureau of the Budget has adopted
-2- LRB9002479DNmb
1 administrative rules or internal procedures concerning the
2 use of certificates of participation;
3 (3) whether State agencies are required to consult with
4 the Department of Central Management Services, the Bureau of
5 the Budget, or any other agency before entering into
6 agreements under which certificates of participation are
7 issued or caused to be issued; and
8 (4) whether reporting of the State's obligations under
9 those agreements is centralized and consistent; and be it
10 further
11 RESOLVED, that the Department of Central Management
12 Services, the Bureau of the Budget, and any other State
13 agency that may have information relevant to this audit shall
14 cooperate fully and promptly with the Office of the Auditor
15 General in the conduct of this audit; and be it further
16 RESOLVED, that the Auditor General shall commence this
17 audit as soon as possible and report his findings and
18 recommendations upon completion of the audit in accordance
19 with the requirements of the Illinois State Auditing Act; and
20 be it further
21 RESOLVED, that a suitable copy of this resolution be
22 delivered to the Auditor General, the Department of Central
23 Management Services, and the Bureau of the Budget.