Illinois released its fiscal year 2025 Annual Comprehensive Financial Report last week, completing the report nearly eight months earlier than its 2024 ACFR.
In a statement, the office of Gov. JB Pritzker pointed to the governor's creation of the ACFR Internal Control Unit within the Governor's Office of Management and Budget.
The centralized structure allowed the governor to coordinate with the auditor general and the comptroller in ensuring consistent and timely reporting from supporting agencies statewide, the statement said.
"The release of the FY25 ACFR underscores Governor Pritzker's continued focus on strengthening Illinois' fiscal health and improving the state's efficiency," the governor's office said.
A spokesperson for Pritzker said the governor — along with Comptroller Susana Mendoza and Auditor General Christopher Meister — has set a goal of continued improvement in audit timeliness.
"With any new process or division, there are many components that will drive actual results, and we are hopeful that the new audit approach plus the support of the ACFR Internal Control Unit will enable the state to decrease the timelines for release," the spokesperson said by email.
The
"Previously, the audit of the ACFR was completed by relying on multiple individual state department audits, oftentimes resulting in duplicative work," Mendoza said. "A delay on any one of those departmental audits would lead to a delay in completing the ACFR audit."
The comptroller credited
The goal now is to get the fiscal 2026 ACFR out by Dec. 31, Mendoza said. But she noted that many agencies are involved in the ACFR process, and even after her office completes compilation of the ACFR, they must await approval from the auditor general's office before releasing the ACFR.
"We expect to see continued improvement on this release date, now that we have been through our first cycle of a statewide audit," she said.
This is "better not only for investors, but it's so much better for taxpayers, too," said Richard Ciccarone, president emeritus of Merritt Research Services, who co-authored
The state's 2025 audit clocked in at the fastest time since 2019, at around 344 days from the end of the fiscal year.
The state didn't publish
Ciccarone said he expects Illinois' audit timeline to improve even more in future years.
"It's a shame that the audit has to be late (at all), because they have some good numbers that they would want to get out," he said. "You see a number of positives in here."
The governor's office pointed to a $13.4 billion improvement in the state's general fund balance from fiscal year's end 2019 to fiscal year's end 2025.
Ciccarone noted the state's unrestricted net position improved in 2025 by about $11 billion year-over-year. Illinois' all-time worst number occurred in 2021, but the 2025 number is "the (best) level they've had since 2017," he said.
"Unrestricted net position to total expenses of government is the best they've done since 2014," he added. "And that was when they didn't include (other post-employment benefits) and other things."
About $2 billion of that improvement came from a reduction in general obligation debt, and another roughly $1.5 billion came from overall long-term debt reduction, he said.
Cash and short-term investments improved by about $4.2 billion.
"That's the best they've had on cash and investments since at least 2002," Ciccarone said. "They're much more protective of their liquidity position."
Another area of improvement was deferred outflows of resources, which was up about $3.08 billion, Ciccarone said.
The amount of deferred outflows reported is "related to (the) total amount of payments the state was able to make subsequent to 6/30," a spokesperson for the governor said, and is "attributable to the FY25 liabilities. This amount will vary every year depending on the actuarial valuations and amounts being able to be paid by the state. The payments going out increased this year, which could result from multiple compounding factors."
The largest growth in general fund expenditures, about $2.5 billion, came from health and social services. A spokesperson for the governor said the 2025 numbers don't reflect the impact of expected future cuts in federal Medicaid support and Supplemental Nutrition Assistance Program reductions.
"This is due to higher expenditures from the Healthcare Provider Relief Fund, which is the primary fund the state uses for Medicaid," the spokesperson said. "Increases here mirror the overall growth in the Medicaid program, including expenditures through the state's assessment programs. Expenditures made on Medicaid are directly tied to the partnership between the state and federal government to provide healthcare to lower income individuals and families."
Ciccarone said "the fact that they could still pull off an improvement is worth noting… Their days cash on hand for governmental activities in 2025 is the highest we've seen since 2003. This looks like their best that we've seen in the century, if you exclude 2003," when there was a $10 billion bond issue impacting the total.
"Total fund balance to expenditures was up to 7.7%," Ciccarone added. "That's the best they've done since the GASB fund balance rules changed in 2007," referring to the Governmental Accounting Standards Board.
Still, the state's OPEB liability saw the biggest increase the state has had in a while, growing by about $3.4 billion.
"You can wipe out the entire improvement in the pensions when your OPEB number goes up like that," Ciccarone said.
"According to the actuarial valuations for the state supported programs, it appears that the growth is due primarily to higher (Medicare Advantage prescription drug) premiums and higher claim experience," a spokesperson for the governor said.
On the state's pension liability, Ciccarone said, "Credit where credit's due, they've been starting to pay it down a bit."
However, he noted that the raw number of aggregate pension liability "still hasn't gone down, it actually went up," and he lamented the legislature's failure to pass the governor's full pension funding plan.
"It's to the disadvantage of taxpayers over the long term," Ciccarone said. "Those that will be hurt most are the next generations, and that's not right… It's unfortunate that there isn't a natural support base (for full pension funding), other than analysts who are concerned about credit quality."
The governor's spokesperson said Pritzker plans to keep trying. "The governor is committed to fully funding state pensions."
"I will continue to utilize the tool I implemented through legislation that allows me to pre-pay pensions," Mendoza said. "So far, SERS has estimated that of the $2.4 billion we have pre-paid since the law was changed, it has generated an additional $41 million for the pension funds."
Looking ahead, Mendoza said her efforts to bolster the state's rainy day fund will also become all the more important.
"For the past few years, we have been watching and reacting to the continued unpredictability in federal government funding," she said. "I'm glad the governor and the legislature have resisted withdrawals from the rainy day fund. Monthly transfers and deposits into the fund, for the most part, have been maintained without disruption."
While a monthly transfer that brought in $45 million to the fund annually has been paused for the current fiscal year, she noted, Illinois' fiscal year 2027 budget reinstates the transfer.
"That $45 million, along with other regular transfers and deposits, are estimated to generate an additional $197 million for the fund in the next fiscal year, bringing the balance to nearly $2.7 billion by this time next year," Mendoza said.
But "the biggest challenge facing Illinois, and quite frankly many other states, is the uncertainty of actions or inactions of the federal government," she emphasized. "We are still on edge following the administration's freeze earlier this year on federal childcare and family assistance funding," which was estimated to bring a $1 billion hit to Illinois.
Another area state officials are watching closely is Medicaid eligibility changes, Mendoza said. Not only can they have "a devastating impact on those needing healthcare," she said, but they can hobble the operations of safety net hospitals and nursing homes that rely on reimbursement for services to the poor.
The Illinois Department of Healthcare and Family Services expects "a drastic decrease in federal funding for Medicaid in Illinois, ranging from $26 billion to $51 billion over the next decade," she said.
Overall, Ciccarone said analysts will find much to like in Illinois' 2025 numbers. "(There are) 15 key factors that we look at year to year," he said. "They were all trending in a positive direction. That's very unusual.
"That pension number is an albatross for the state, in terms of the challenges they face," he added. "If we could reduce the pension liability, this would be a year to shout about for the state of Illinois."
