REPORT DIGEST

GOVERNORS STATE UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the One Year Ended:

June 30, 2006

Summary of Findings:

Total this audit                       1

Total last audit                       1

Repeated from last audit        0

Release Date:

January 18, 2007 

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 and Full Report are also available on

the worldwide web at

www.auditor.illinois.gov

SYNOPSIS

¨      The Foundation did not properly apply Government Accounting Standards Board (GASB) Statement No. 33 Accounting and Financial Reporting for Nonexchange Transactions.

FINANCIAL OPERATIONS (ALL FUNDS)

FY 2006

FY 2005 *

REVENUES

            Operating revenues

EXPENSES

            Operating expenses

                  Operating loss

NONOPERATING REVENUES (EXPENSES)

            Contributions

            Investment income

                        Net nonoperating revenues

            Gains (losses) before other revenues, expenses,

            gains and losses

            Total other revenues

                        Change in net assets

NET ASSETS

            Net assets-beginning of year

            Net assets-end of year

* - Certain reclassifications were made to the FY 2005 amounts

$84,461

$349,982

($265,521)

$188,747

   40,883

$229,630

($35,891)

$27,100

($8,791)

$2,118,908

$2,110,117

$116,148

$305,781

($189,633)

$207,749

   24,553

$232,302

$42,669

$25,993

$68,662

$2,050,246

$2,118,908

OTHER SIGNIFICANT ACCOUNT BALANCES

AT JUNE 30,

2006

AT JUNE 30,

2005

Cash, cash equivalents and certificates of deposit          

Capital assets..................................................

Accounts Receivable.......................................

        Total Assets.............................................

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

Net Assets

        Invested in capital assets...........................

       Restricted Nonexpendable........................

       Restricted Expendable..............................

       Unrestricted..............................................

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

$952,904

1,167,851       39,743

$ 2,160,498

$50,381

$1,167,851

694,935

242,365

      4,966

$2,110,117

$1,012,577

1,167,851

0

$ 2,180,428

$61,520

$1,167,851

667,835

322,437

      (39,215)

$2,118,908

FOUNDATION CHIEF EXECUTIVE OFFICER

During Audit Period and Currently: Dr. James Britt

Phone-a-thon pledges were not recorded in the financial statements

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES NOT PROPERLY APPLIED

     Governors State University Foundation (Foundation) did not properly apply Government Accounting Standards Board Statement No. 33 Accounting and Financial Reporting for Nonexchange Transactions.

     During our review of the Foundation board minutes, we noted that the Foundation had pledges.  Upon further inquiry, we found evidence that the Foundation does a phone-a-thon and receives pledges and does not record these amounts in the financial statements. Although the amounts uncollected as of June 30 are typically immaterial, it is possible that significant revenues could be unrecorded in any particular year.

     Foundation management indicated that they believed they were not required to recognize the pledges because the amounts uncollected are not enforceable and are immaterial at year-end.

     We recommended the Foundation record all transactions in accordance with generally accepted accounting principles.  (Finding 1, page 8)

     Foundation management accepted the recommendation and stated that they will establish a year-end procedure to record total pledges and an allowance for their uncollectibility.

AUDITORS’ OPINION

     Our auditors stated the financial statements of Governors State University Foundation as of June 30, 2006 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 on this audit were Nykiel Carlin & Co., LTD.