SPRINGFIELD, Ill. – State tax collectors have problems with numbers, an audit found.

The Department of Revenue wasn’t paying attention to an account which ran out of money, falsified vouchers to hide prepayment of bills and didn’t have money for other payments, in part because of budget diversions by Gov. Rod Blagojevich, according to Auditor General William Holland’s report Tuesday.

The agency acknowledged falling asleep at the switch on the depleted fund, but defended its other actions as attempts to pay bills on time and only when money was available.

The department collects local sales tax receipts and puts them in an account until they’re reimbursed to cities. But the fund ran out of money in March 2007 and the state didn’t even know until Chicago officials reported they did not get their sales tax check, Holland’s office said.

The audit said that since 2003, Chicago and 89 other municipalities increased their local sales taxes, but Revenue didn’t set aside enough to cover those hikes and the account ran dry.

“We didn’t pay very good attention,” Revenue spokesman Mike Klemens said.

Procedures for regular six-month reviews of sales tax fund balances have been written, Klemens said.

Agency officials also falsified vouchers to hide the fact that they were prepaying bills for telecommunications services provided by the Department of Central Management Services, the audit found.

They created documents to make it look like they were paying $1.6 million in bills from the 2007 fiscal year when the checks were really prepayments for fiscal year 2008, a violation of state law, Holland said. Another $2.8 million was prepaid for 2008 but taken from 2007 funds.

In a departure from recent practice, Holland’s office would not say whether he forwarded the findings to law enforcement authorities.

Klemens said the agency thought state law allowed such prepayments. He said some prepayments were made based on what Revenue knew it owed and simply hadn’t yet received a bill.

The audit said the practice could allow the agency to claim it spent more of its appropriated budget than it actually had spent. Agencies that don’t spend their entire budget risk not getting as much money the following year.

The audit also found that Revenue was late in paying municipalities money due under tax increment financing agreements which set aside tax revenue for developing a city’s blighted areas.

The audit pointed out that Blagojevich took $1.5 million out of the fund in 2005 to pay other bills, reducing the amount available to cities. It was one of dozens of fund “sweeps” of money Blagojevich made of special funds, saying they had excess money.

Klemens said the fund transfer put the agency a few hundred thousand dollars behind in reimbursing cities and officials have waited until enough money has been collected to make the payments, creating a delay of only a few days.