REPORT DIGEST

ILLINOIS COMMUNITY COLLEGE BOARD

FINANCIAL AND COMPLIANCE AUDIT
(In Accordance with the Single Audit Act of 1984 and OMB Circular A-128)
For the Two Years Ended:
June 30, 1996

Summary of Findings:

Release Date:
May 21, 1997

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• Since 1991, the ICCB has used appropriated funds to subsidize an estimated $13,135 in costs of the Illinois Community College System Foundation, a not-for-profit corporation created to benefit public community colleges and their students.

• The ICCB did not receive refunds of unexpended State grant monies from some community colleges by the required deadline. Our auditors noted 32 refunds totaling $46,909 which were between 9 and 169 days late.

{Expenditures and Activity Measures are summarized on the next page.}

($ In Thousands)

FY 1996

FY 1995

FY 1994

• Total Expenditures (All Funds)

OPERATIONS TOTAL
% of Total Expenditures
Personal Services
% of Operations Expenditures
Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures
Retirement Costs - Community College Districts
% of Operations Expenditures
Contractual Services
% of Operations Expenditures
EDP
% of Operations Expenditures
All Other Operations Items
% of Operations Expenditures
GRANTS TOTAL
% of Total Expenditures

• Cost of Property and Equipment

$254,191

$1,788
0.7%
$1,040
58.2%
$35
1.9%
-0-
0%
$281
15.7%
$302
16.9%
$130
7.3%
$252,403
99.3%

$831.3

$273,092

$29,344
10.7%
$1,072
3.7%
$101
0.3%
$27,543
93.9%
$255
0.9%
$246
0.8%
$127
0.4%
$243,748
89.3%

$765.7

$259,453

$29,325
11.3%
$1,084
3.7%
$108
0.4%
$27,543
94.0%
$221
0.7%
$243
0.8%
$126
0.4%
$230,128
88.7%

$709.3

($ In Thousands)

FY 1996

FY 1995

FY 1994

• Total Receipts (All Funds)
• Grants Awarded to Community Colleges
  Federal Programs
  State Programs
• Other Grants and Awards Given
• Number of Employees

$6,129

$7,907
$243,825
$671
35

$9,322

$7,129
$233,570
$3,049
36

$5,814

$5,067
$224,761
$300
36

• Prior to 8/7/94 Mr. Cary A. Israel, Executive Director
• Between 8/8/94 and 11/20/94 .. Dr. Ivan Lach, Acting Executive Director
• Between 11/21/94 and 6/28/96 Dr. Geraldine A. Evans, Executive Director

Currently Dr. Ivan Lach, Acting Executive Director

The Illinois Community College Board used appropriated funds to subsidize the Illinois Community College System Foundation

The Illinois Community College System Foundation does not directly benefit a State agency

Our audit disclosed 20 out of 32 grant refunds from community colleges were received late

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

SUBSIDY TO THE ILLINOIS COMMUNITY COLLEGE SYSTEM FOUNDATION

Since November 1991, the Illinois Community College Board (the ICCB) has used appropriated general revenue funds to subsidize an estimated $13,135 in costs of the Illinois Community College System Foundation (the Foundation).

The ICCB's appropriation bill did not specifically authorize expenditures on behalf of the Foundation. According to appropriation language, the ICCB's funding was for " the ordinary and contingent expenses of the (ICCB) central office ." Neither the appropriation bill nor its supporting budget documents disclosed the expected subsidies. The ICCB should advise the legislative appropriations committees, in writing, of the amounts of any expected subsidies to outside organizations.

The Auditor General has reported subsidies made by other State agencies to outside organizations. Those subsidies have typically been provided to organizations which directly benefit a State agency. This situation differs. The Illinois Community College System Foundation does not directly benefit a State agency. Rather, it was created to benefit the 49 community colleges which are all part of local government. (Finding 1, page 9)

ICCB officials state that they have in the past disclosed to appropriations staff the relationship between the ICCB and the Foundation. According to the response, the ICCB will continue to provide fiscal and other pertinent information concerning the relationship between the ICCB and the Foundation to the legislature and legislative staffs.

In recent years, the Foundation paid $36,000 for the development of a uniform financial reporting system for the Illinois community colleges. Officials indicate that this payment was beneficial to both the ICCB and the Illinois community college system.

GRANTS - LATE REFUNDS

Our audit disclosed 20 out of 32 grant refunds from community colleges were received late. The late refunds totaled $46,909. The Grant Funds Recovery Act requires unused grant funds to be returned within 45 days of the end of the grant period. (Finding 3, page 16)

ICCB officials accepted our recommendation to enforce its deadline for submitting refunds or unexpended grant funds.

OTHER FINDINGS

The remaining findings and recommendations were less significant and have been given appropriate attention by the ICCB management. We will review progress toward implementation of our recommendations during our next audit. Responses were provided by Mr. Michael Srbljan, Deputy Director for Fiscal Affairs.

AUDITORS' OPINION

Our auditors stated that the financial statements of the Illinois Community College Board for the two years ended June 30, 1996 are fairly presented.

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:JHL:vh

SPECIAL ASSISTANT AUDITORS

DeRaimo, Eisen & Fey were our special assistant auditors for this engagement.