REPORT DIGEST

ILLINOIS JOINING FORCES FOUNDATION

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  August 17, 2023

FINDINGS THIS AUDIT: 4

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 3 -- 3
Category 2:  0 -- 1 -- 1
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 4 -- 4

FINDINGS LAST AUDIT: 4

Category 1: Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State
laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, 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

INTRODUCTION

The auditors expressed an ADVERSE
opinion on the Illinois Joining Forces
Foundation’s (Foundation) basic
financial statements.  The Codification
of Statements on Auditing Standards
(AU-C § 705.09) states auditors “should
express an adverse opinion when the
auditor, having obtained sufficient
appropriate audit evidence, concludes
that misstatements, individually or in
the aggregate, are both material and
pervasive to the financial statements.”

This digest covers the Foundation’s
financial audit for the year ended June
30, 2021.  The Foundation’s compliance
examination for the year ended June 30,
2021, will be released under a separate
cover.

SYNOPSIS

• (21-1) The Foundation did not present
adequate financial statements and
related note disclosures for Fiscal
Year 2021.
• (21-2) The Foundation did not adhere
to the Foundation’s bylaws and/or
internal policies, which constituted
the Foundation’s internal control
structure.  In addition, discrepancies
existed between the Foundation’s bylaws
and internal policies.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FAILURE TO PRESENT ADEQUATE FINANCIAL
STATEMENTS AND NOTES

The Illinois Joining Forces Foundation
(Foundation) did not present adequate
financial statements and related note
disclosures for Fiscal Year 2021.

During testing, some of the more
significant issues we noted included
the following instances where the
Foundation did not present the
financial statements and related note
disclosures in accordance with the
Financial Accounting Standards Board
(FASB) Accounting Standards
Classification (ASC):

• The Foundation did not disclose all
of its material related-party
transactions for Fiscal Year 2021.

• The Foundation did not disclose
whether it had any subsequent events.

During testing, some of the more
significant issues we noted included
the following instances where the
Foundation did not present the
financial statements and related note
disclosures in accordance with sources
such as practices that are widely
recognized and prevalent, either
generally or in the industry, including
good business practices:

• The Foundation disclosed in Note 3
(Liquidity and Availability of
Resources) and in Note 6 (Net Assets
With Donor Restrictions) an amount of
$250,000 as time restricted net assets.
This does not agree to underlying
information in the general ledger,
which indicates an amount of $258,583
in net assets with time restrictions.

• The Foundation disclosed in Note 7
(Line of Credit) a line of credit of
$60,000.  However, the Foundation did
not provide documentation supporting
the amount of the line of credit.  As
such, we were unable to determine
whether the disclosure was accurate.

• The Foundation disclosed in Note 9
(Note Payable) that its monthly
payments for its Small Business
Administration loan are due beginning
2.5 years from the date of the note,
June 16, 2020.  This does not agree
with information presented in the loan
agreement, which indicates that monthly
payments are due beginning 12 months
from the date of the note.
Additionally, the Foundation disclosed
in Note 9 a schedule of future loan
payments which was inaccurate and did
not agree to information presented in
the loan agreement. (Finding 1, pages
23-28)

This finding has been reported since
2018.

We recommended the Foundation utilize
professional tools, such as checklists,
to improve the completeness and quality
of its financial statements and related
note disclosures.  Additionally, we
recommended the Foundation develop and
consistently apply a method for
classifying and allocating expenses on
its statement of functional expenses.

The Foundation stated it follows GAAP
accounting.  Additionally, the
Foundation stated the items noted in
the finding highlight classification
findings, which the Foundation did not
believe were material to the bottom
line of the organization.  The
Foundation indicated it would correct
these classification findings in future
financial statements beginning with
Fiscal Year 2023, and the Foundation
stated it will utilize tools such as
checklists to improve the completeness
and quality of the financial statements
as recommended.

In an auditor’s comment, we maintained
the Foundation did not present adequate
financial statements and related note
disclosures for Fiscal Year 2021, as
enumerated within the finding.

INADEQUATE INTERNAL CONTROL STRUCTURE

The Foundation did not adhere to the
Foundation’s bylaws and/or internal
policies, which constituted the
Foundation’s internal control
structure.  In addition, discrepancies
existed between the Foundation’s bylaws
and internal policies.

During testing, some of the more
significant deficiencies we noted
included the following:

• The Foundation did not maintain
adequate control or have formal
policies in place over personnel
records.  Specifically, we noted the
Foundation did not have a system or
process in place to track employee
attendance, and employee requests for
time off were not formally documented.

• For 11 of 17 (65%) receipts tested,
totaling $391,675, the Foundation was
unable to provide supporting
documentation sufficient to enable us
to determine whether the receipts were
complete, mathematically accurate, and
properly approved. As such, we were
unable to determine whether the
receipts met those requirements.

• For 36 of 36 (100%) disbursements
tested, totaling $275,993, the
Foundation was unable to provide
supporting documentation showing
approval of the disbursements.  As
such, we were unable to determine
whether the disbursements were properly
approved in accordance with applicable
policies.

• The Foundation had inconsistencies
between its bylaws and its internal
Financial Controls Policy.  The bylaws
require dual approval from both the
Board’s treasurer and another Board
member for expenses over $5,000.
However, the Financial Controls Policy
limits the Executive Director’s
expenditure authority to disbursements
of up to $1,000 and requires dual
approval for all expenses exceeding
$1,000. (Finding 2, pages 29-32)

This finding has been reported since
2016.

We recommended the Foundation’s
management and Board meet and agree on
specific internal control objectives,
policies, and practices.  Additionally,
we recommended Board members and
management formally develop and update
written policies and procedures to
facilitate the Foundation’s operations.
Finally, we recommended the Foundation
strengthen its controls over retention
and maintenance of supporting
documentation related to the
Foundation’s fiscal and financial
operations.

The Foundation stated that it believed
some parts of the finding were not
accurately stated.  The Foundation
stated that its Executive Director has
the authority to approve expenditures
of up to $5,000 not $1,000 as stated in
this section.  The Foundation stated
that it has documentation of approval
for expenditures over $5,000.  The
Foundation stated that it has
documentation of disbursements.  The
Foundation stated that it believed the
audit team removed access to specific
requests for Fiscal Year 2021 which
rendered the Foundation incapable of
providing the information to support
the Foundation’s compliance with these
findings.  The Foundation stated it has
established internal controls and
continues to review these.  The
Foundation stated that its management
will document the internal control
policies and practices and present them
for review annually to the Board of
Directors.  The Foundation stated that
due to the timing of these audit
findings, modifications made will not
be evidenced until the Foundation’s
Fiscal Year 2024.  The Foundation
stated that it developed and
implemented an employee handbook in
January of 2021, this handbook covers
some policies.  The Foundation stated
that it is continuing to develop
policies and procedures that support
its operations.  The Foundation stated
that it appreciated the recommendations
from the audit team and will work to
incorporate those recommendations as
appropriate.

In an auditor’s comment, we maintained
the Foundation did not adhere to the
Foundation’s bylaws and/or internal
policies, which constituted the
Foundation’s internal control
structure, and we maintain the
conclusion discrepancies existed
between the Foundation’s bylaws and
internal policies, as enumerated within
the finding. The Foundation did not
provide documentation to address the
parts of the finding it took issue with
in its above response, neither earlier
during the engagement when these
matters were first brought to its
attention nor in the formal finding
stage of the engagement.  In addition,
the Foundation’s claim the audit team
removed access to specific requests for
Fiscal Year 2021 is inaccurate.  The
audit team made repeated efforts to
communicate its requests to the
Foundation throughout the engagement
and adopted the use of a secure request
sharing software system which was
available to both the audit team and
the Foundation.

OTHER FINDINGS

The remaining findings pertain to
inadequate controls over board
membership and a lack of documentation
to substantiate compliance with grant
agreements.  We will review the
Foundation’s progress towards the
implementation of our recommendation in
our next financial audit.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Foundation as of and
for the year ended June 30, 2021, are
not fairly stated in all material
respects.

This financial audit was conducted by
the Office of the Auditor General’s
staff.

JANE CLARK
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

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