REPORT DIGEST

 

ILLINOIS

CONSERVATION

FOUNDATION

 

FINANCIAL AUDIT

AND COMPLIANCE EXAMINATION

(In Accordance with the
Single Audit Act and OMB Circular A-133)

For the Year Ended:

June 30, 2004

 

Summary of Findings:

Total this audit††††††††††            ††† 2

Total last audit††††††††††            ††† 3

Repeated from last audit†††††††††† 2

 

Release Date:

March 24, 2005

 

 

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

 

 

To obtain a copy of the Report contact:

Office of the Auditor General

Iles Park Plaza

740 E. Ash Street

Springfield, IL 62703

(217) 782-6046 or TTY (888) 261-2887

 

This Report Digest is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

 

 

SYNOPSIS

 

        The Foundation had deposits in banks in excess of the FDIC insurance limits.Further, the Foundation had not requested the banks to pledge any additional collateral to secure the deposits.

 

        The Foundation did not comply with certain parts of the State Comptroller Act and the Illinois Procurement Code as follows:

 

-          Information on locally held funds was not submitted to the Office of the State Comptroller.

 

-          Copies of grants in excess of $10,000 were not filed with the Office of the State Comptroller.The Foundation awarded 29 grants to sub-grantees in excess of $10,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{Financial Information is summarized on the reverse page.}

 

 

 

ILLINOIS CONSERVATION FOUNDATION

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

FOR THE FISCAL YEAR ENDED JUNE 30, 2004
 

OPERATING STATEMENT (Governmental Funds)

FY 2004

FY 2003

Revenues:†††††† Fund Raising Events...................................................

†††††††††††††††††††††††† Donations - Restricted...............................................

††††††††††††††††††††††† Grants and Receipts from Other Governments.............

††††††††††††††††††††††† Donations Ė Unrestricted.............................................

††††††††††††††††††††††† Merchandise Sales Ė Unrestricted................................

††††††††††††††††††††††† Investment Income - Unrestricted................................

††††††††††††††††††††††† Investment Income - Restricted...................................

††††††††††††††††††††††† Increase (Decrease) In Fair Value Of Restricted†††††† Investments..............................................................

††††††††††††††††††††††† Increase In Fair Value Of Unrestricted Investments......

††††††††††††††††††††††† On-Behalf Payments...................................................

††††††††††††††††††††††† Publication Sales - Unrestricted...................................

††††††††† †††††††††††††Change in Prepaid Expenses.......................................... †††††††††††††††††††††††† ††††††

††††††††††††††††††††††††††††††††††† Total Revenue.................................................

Expenditures:Administrative............................................................

†††††††††††††††††††††††††† Education.................................................................. †††††††††††††††††††††††††† Education................................................................

†††††††††††††††††††††††††† Natural Resources and Recreation Programs............

†††††††††††††††††††††††††† On-Behalf Payments................................................

††††††††††††††††††††††††††††††††††† Total Expenditures..........................................

Change In Net Assets.....................................................................

Net Assets, Beginning of Year.......................................................

Net Assets, End of Year..................................................................

$††† 70,208††††

1,718,816

1,165,817

53,699

10,059

55,988

4,293

 

5,009

62,657††††

165,946

16,857

††††††††††††† 43†††††††††††

$3,329,392

$†† 234,665††

6,489

1,836,241

†††† 165,946††††

$2,243,341

$1,086,051††

3,832,244

$4,918,295

$†††† 85,031

889,434

1,362,410

60,401

1,047

38,573

3,700

 

(2,084)

0††††

225,005

0†††††††††††

††††††††††† 614

$2,664,131

$†† 203,780

10,542

1,995,610

†††† 225,005

$2,434,937

$†† 229,194

3,603,050

$3,832,244

STATEMENT OF NET ASSETS (Governmental Activities)

June 30, 2004

June 30, 2003

Assets:††††††††††††† Cash And Cash Equivalents......................................

††††††††††††††††††††††††† Accounts Receivable.................................................

††††††††††††††††††††††††† Accrued Investment Income......................................

††††††††††††††††††††††††† Inventory..................................................................

††††††††††††††††††††††††† Prepaid Expenses.....................................................

††††††††††††††††††††††††† Investments...............................................................

††††††††††††††††††††††††††††††††††† Total Assets....................................................

Liabilities:†††††† Accounts Payable......................................................

Deferred Revenue......................................................

Total Liabilities...............................................

Net Assets:††††† Natural Resources & Recreation - Restricted...........

†††††††††††††††††††††††† Endowment/Nonexpendable Ė Restricted...................

†††††††††††††††††††††††† Education - Restricted................................................

†††††††††††††††††††††††† Unrestricted..............................................................

††††††††††††††††††††††††††††††††††† Total Net Assets.............................................

$2,083,333

14,061

6,276

17,026

6,638

2,863,815††††††

$4,991,149

$†††† 32,491

†††††† 40,363††††

$†††† 72,854

$4,643,025

70,011

7,507

†††† 197,752††††

$4,918,295

$3,727,612

27,577

2,410

14,978

6,595

†††††† 65,002

$3,844,174

$†††† 11,930

††††††††† †††††0

$††† 11,930

$3,450,860

65,002

9,703

†††† 306,679

$3,832,244

FOUNDATION EXECUTIVE DIRECTOR

During Audit Period:Jess Hansen

Currently:Jess Hansen

†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††


 

 

 

 

 


$68,381 in bank balances was unprotected by FDIC insurance or other collateral

 

 

 

 

 

 

 

 

 

 

 


Lack of sufficient supervision

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Non compliance with the State Comptroller Act

 

 

 

 

 

Information on locally held funds was not submitted to the Office of the Comptroller

 

 

 

 

Non Compliance with the Illinois Procurement Code

 

 

 

Copies of grants in excess of $10,000 were not filed with the Office of the Comptroller

 

 


The Foundation awarded 29 grants to sub-grantees in excess of $10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Foundation management disagrees with the finding and state they are not a State Agency

 

 

 

 

Auditorís comment

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

BANK BALANCES IN EXCESS OF FDIC INSURANCE

 

††††† Bank balances in excess of FDIC insurance limits were not protected by collateral pledged by banks.During our testing of cash balances, we noted the Foundation did not request securities from their banks to collateralize bank balances in excess of the FDIC insurance limit of $100,000.A total of $68,381 in bank balances was unprotected by collateral at June 30, 2004.

 

†††† The State Officers and Employees Money Disposition Act (30 ILCS 230/2c) (Act) requires State agencies to obtain appropriate collateral whenever funds deposited exceed the $100,000 FDIC insurance limit.The Foundation is considered a component unit of the State of Illinois and should be following the Act.

 

††† Foundation management indicated the situation arose due to a lack of sufficient supervision of the bank account balances.(Finding 04-1, page 17)This finding was first reported in 2003.

 

†††† We recommended the Foundation request the necessary collateral be pledged by the banks in sufficient amount so as to provide protection for their bank balances.

 

†††† Foundation management indicated they have met with the banks to develop ways to resolve this finding.(For the previous Foundation response, see Digest Footnote #1.)

†††††

NONCOMPLIANCE WITH STATUTORY MANDATES

 

†††† As part of our examination we tested the Foundationís compliance with certain statutory mandates.We noted two instances where, through our interpretation of the statutory mandates, the Foundation was not complying.

 

†††† First, we noted the Foundation was not filing documentation of the establishment of their locally held funds/accounts or quarterly reports of locally held fund/account activity with the Office of the State Comptroller as required by the State Comptroller Act (Act).†††††††††

 

†††† The Foundation has three locally held funds/accounts that are held outside of the State Treasury.†† Foundation management noted they did not believe the locally held fund requirements apply to them as the Foundation was created as a not-for-profit corporation under the General Not for Profit Corporation Act of 1986.

 

†††† Second, the Foundation was not filing copies of their grants in excess of $10,000 with the Office of the Comptroller as required by the Illinois Procurement Code (Code).The Illinois Conservation Foundation Act notes the Foundation is exempt from the Code when only private funds are used for procurement expenditures.During fiscal year 2004 the Foundation received approximately $1.17 million of federal grant funds.These funds maintain their public identity until they are expended for goods or services and would not be considered private funds.

 

†††† The Foundation awarded 29 grants over $10,000 during fiscal year 2004 from the federal funds they received.Foundation management indicated the language to exempt the Foundation from the Code when private funds are used for procurement expenditures was added to clarify the Foundation is exempt from the Code.

 

†††† Failure to comply with the State Comptroller Act and the Illinois Procurement Code are violations of statutorily mandated responsibilities.(Finding 04-2, pages 18-19)This finding was first reported in 2003.

 

†††† We recommended the Foundation either comply with the applicable requirements set forth in the statutes or seek a formal written interpretation from the State of Illinois Office of the Attorney General regarding the applicability of the statutes to the Foundation.

 

†††† Foundation management responded that they disagreed with the finding, as they do not believe they are a State agency.Foundation management went on to indicate they are in the process of seeking a formal written opinion from the Attorney General regarding the Foundationís status. (For the previous Foundation response, see Digest Footnote #2.)

 

†††† In our auditorís comment, we noted on May 25, 2004, the Foundation requested an informal opinion from the Attorney Generalís Office on the application of the statutes involved in this finding, along with several other statutes, to the Foundation.We are not aware of any request by the Foundation for a formal written opinion from the Attorney Generalís Office on the issues in this finding.

 

†††† Mr. Jess Hansen, Executive Director of the Illinois Conservation Foundation provided the Foundationís responses.

 

AUDITORíS OPINION

 

††††† Our auditors stated the Illinois Conservation Foundationís financial statements as of and for the year ended June 30, 2004 were fairly presented in all material respects.

†††††

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

 

SPECIAL ASSISTANT AUDITORS

 

†††††††† Ginoli & Company LTD were our special assistant auditors.

 

DIGEST FOOTNOTES

 

#1 - BANK BALANCES IN EXCESS OF FDIC INSURANCE Ė Previous Foundation Response

 

2003: The Foundation will establish procedures for monitoring the amounts maintained in its bank accounts to minimize account balances in excess of the FDIC insurance limit of $100,000 and will work with the appropriate banks to reduce the Foundationís risks in this regard.The Foundation will request collateral pledges from the banks where appropriate.

 

#2 - NONCOMPLIANCE WITH STATUTORY MANDATES Ė Previous Foundation Response

 

2003:The Foundation will begin filing annual certifications of its systems of internal control with the Office of the Auditor General.The Foundationís first certification will be filed by May 1, 2004.As noted in the audit finding, such certifications were not previously filed with the Auditor General because we did not believe the filing requirements of the Fiscal Control and Internal Auditing Act applied to the Foundation, which was established as a not-for-profit organization as authorized by State law.Similarly, the Foundation has not previously filed documentation regarding its locally held funds and copies of its grants and contracts in excess of $10,000 with the Comptroller because it was our understanding that such filing requirements did not apply to the Foundation.We will work with the Attorney General, Comptroller and other appropriate State entities to clarify the requirements that are applicable to the Foundationís activities.In addition, the Foundation will seek legislation to further clarify the statutory requirements applicable to the Foundation as a not-for-profit corporation.††