REPORT DIGEST

ILLINOIS JOINING FORCES FOUNDATION

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  November 16, 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,
2022.  The Foundation’s compliance
examination for the year ended June 30,
2022, will be released under a separate
cover.

SYNOPSIS

• (22-1) The Foundation did not present
adequate financial statements and related
note disclosures for Fiscal Year 2022.
• (22-2) 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 2022.

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 2022.

• 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 $70,833 as time
restricted net assets.  This does not agree
to underlying information in the general
ledger, which indicates an amount of
$41,583 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 is working to
implement more processes and procedures and
would look into the use of professional
tools to improve the completeness and
quality of the financial statements. The
Foundation also stated that it has started
to implement a method for classifying and
allocating expenses. The Foundation also
stated that due to the timing of the
report, these findings may continue until
the year ending June 2024.

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 6 of 9 (67%) receipts tested,
totaling $27,400, 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 18 of 37 (49%) disbursements tested,
totaling $44,012, 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 it would develop and
consistently apply policies and procedures
to ensure stronger internal controls, where
needed. The Foundation stated it would
review the policies and procedures that
govern the Foundation’s operations and
apply needed changes to strengthen controls
over the retention and maintenance of
supporting documentation. The Foundation
stated that due to the timing of this
report, these findings may remain until the
Fiscal Year ending June 2024.

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 recommendations
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, 2022, 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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