REPORT DIGEST

GOVERNORS STATE UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

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

For the Year Ended:

June 30, 2003

Summary of Findings:

Total this audit                     4

Total last audit                     0

Repeated from last audit      0

 

Release Date:

February 24, 2004

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 TDD (217) 524-4646

 

This Report Digest is also available on

the worldwide web at

www.auditor.illinois.gov

 

 

 

SYNOPSIS

 
  • The University failed to provide currently enrolled students and current employees direct individual notice of the availability of the annual campus security report.
  • The University’s property control records did not accurately reflect property and equipment at the University.
  • The University did not comply with the University Faculty Research and Consulting Act.

 

 

 

 

 

 

 

 

 

 

 

 

 

{Financial Information is summarized on the reverse page.}

 

                                                  GOVERNORS STATE UNIVERSITY

                                              FINANCIAL AND COMPLIANCE AUDIT

                                                     For The Year Ended June 30, 2003

 

FINANCIAL OPERATIONS (CURRENT FUNDS)

FY 2003

FY 2002

OPERATING REVENUES

      Student tuition and fees (net of scholarship allowances)

      Grants and contracts

      Auxiliary enterprises

      Payments on behalf of the University

      Other operating revenues

            Total Operating Revenues

OPERATING EXPENSES     

      Instruction

      Research

      Public service

      Academic support

      Student services

      Institutional support

      Operation and maintenance of plant

      Auxiliary enterprises

      Depreciation

            Total Operating Expenses

Operating loss

NONOPERATING REVENUES (EXPENSES)

      State Appropriations

      Investment income

      Interest on capital assets and related debt

      Other nonoperating expenses

      Net nonoperating revenues

      Income (loss) before other revenues, expenses, gains and losses

      Transfers from the Capital Development Board

INCREASE IN NET ASSETS

Net assets, beginning of year

Net assets, end of year

 

$12,361,724

5,961,600

1,291,324

6,850,665

6,498,551

$32,963,864

 

$25,155,847

1,590,082

6,342,551

1,820,784

3,074,600

10,367,297

5,331,858

1,208,951

2,249,840

$57,141,810

($24,177,946)

 

$25,628,600

54,980

(223,592)

(104,097)

$25,355,891

$1,177,945

12,710,712

$13,888,657

$35,556,336

$49,444,993

 

$10,888,500

5,049,808

1,204,143

6,719,947

7,935,077

$31,797,475

 

$26,669,608

354,513

8,513,785

1,863,404

3,766,316

10,182,379

5,467,600

1,414,150

2,115,320

$60,347,075

($28,549,600)

 

$27,726,400

107,320

(235,587)

(11,775)

$27,586,358

($963,242)

7,184,798

$6,221,556

$29,334,780

$35,556,336

SELECTED ACCOUNT BALANCES (ALL FUNDS)

JUNE 30, 2003

JUNE 30, 2002

Cash and short-term investments

Capital assets

Accumulated depreciation .

Accrued compensated absences

Net Assets

$3,937,549

92,016,091

37,026,720

7,018,664

49,444,993

$3,447,967

79,085,821

35,196,366

7,844,371

35,556,336

SUPPLEMENTARY INFORMATION

FY 2003

FY 2002

Employment Statistics (Full Time Equivalent - Average Number)

Appropriated funds:

      Faculty/administrative

      Civil service

      Student employees

Nonappropriated funds:

      Faculty/administrative

      Civil service

      Student employees

            Total Employees

 

 

367.3

192.3

35.9

 

97.1

71.2

41.6

805.4

 

 

399.9

206.5

43.5

 

149.1

69.6

42.6

911.2

Selected Activity Measures

Annual full-time equivalent students – undergraduate

Annual full-time equivalent students - graduate

1,870

1,924

1,966

1,785

UNIVERSITY PRESIDENT

During Audit Period and Currently: Dr. Stuart Fagan

 

 

 

Failure to provide security report to students and employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Records did not accurately reflect property and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Five out of 25 faculty members performing outside research did not receive approval in advance

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

ANNUAL CAMPUS SECURITY REPORT

The University failed to provide currently enrolled students and current employees direct individual notice of the availability of the annual campus security report.

The Department of Education Student Assistance General Provision (34 CFR Part 668, Subpart D, 668.41) requires that by October 1 of each year, the University must distribute to all enrolled students and current employees its annual security report.

The University agreed to comply with the requirements of the Federal Regulations concerning institutional and financial assistance information for students and prospective students, upon signing the U.S. Department of Education Student Financial Assistance Program Participation Agreement.

If the University fails to take corrective actions, the United States Secretary of Education could take action against the University by imposing sanctions. The type of sanction would depend on the severity of the violations. Possible sanctions could include the assessment of fines and in very severe violations, the limitation, suspension, or termination of the University from participation in the Title IV, HEA Programs. (Finding 1, Pages 16-17)

We recommended that the University develop policies and procedures that ensure all currently enrolled students and all current employees receive direct individual notice of the availability of the annual campus security report as required by federal regulations.

University officials agreed with the finding and stated that they will implement the recommendation.

 

INADEQUATE EQUIPMENT AND PROPERTY CONTROL RECORDS

The University's property control records did not accurately reflect property and equipment.

Several different types of exceptions were noted during our testing of property including problems with recording, tagging and the valuation of the equipment.

Failure to keep accurate and detailed records of State property could result in inaccurate accounting and reporting of State assets. (Finding 2, pages 18-19)

We recommended that the University review its procedures for the maintenance of property control records and ensure all personnel are aware of their responsibilities related to the property within their departments.

University officials responded that they agreed that improvements to the property control record-keeping system are necessary and they have already started the implementation of a centralized plan for improvement.

 

UNIVERSITY FACULTY RESEARCH & CONSULTING

The University did not comply with the University Faculty Research and Consulting Act.

The University’s Office of the President requests that all faculty complete a form stating whether or not they intend to perform outside research and/or consulting services. Faculty members who intend to perform outside research and/or consulting are required to obtain approval from the University President prior to performing any outside services. Additionally, faculty members who perform outside research and/or consulting are also required to file an annual report in February of the following year.

During our testing we noted that five out of 25 members performing outside research and/or consulting did not receive approval before work started. They were approved 2 to 120 days after work was started. In addition, we noted that 7 out of 26 faculty members did not submit the annual reports until after our inquiry. (Finding 3, pages 20-21)

We recommended that the University ensure that faculty members comply with the University Faculty Research and Consulting Act.

University officials stated that they will revise their current policies and procedures to ensure compliance with the Act.

OTHER FINDING

The remaining finding is less significant and is reportedly being given attention by University officials. We will review progress toward implementation of our recommendations in our next audit.

University responses to the findings were provided by the President, Dr. Stuart Fagan in a letter dated December 4, 2003.

 

AUDITORS' OPINION

Our auditors stated the University’s financial statements as of June 30, 2003 and for the year then ended, are fairly presented in all material respects.

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:TLK:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were DeRaimo, Hillger & Ripp.