NEED TO IMPROVE INTERNAL CONTROLS OVER RECEIPTS, DISBURSEMENTS AND UNCOLLATERALIZED
BANK DEPOSITS
The Illinois Mathematics and Science Academy Fund for the Advancement of Education
(Fund) did not have adequate internal controls over its receipts and disbursements.
During testing, we noted that four of 24 bank reconciliations were not completed
timely; payments for two of 49 disbursements were not timely, and authorized signatures on
the bank account and certificates of deposit had not been updated timely. A departed Vice
President’s name had not been deleted from the bank authorization card until over
three months after his departure. In addition, cash and certificate of deposit balances at
one banking institution exceeded the amount insured by the FDIC by approximately $864,000
at fiscal year end, which was not in accordance with the Fund’s policy. (Finding 1,
pages 11-13)
We recommended the Fund review its cash management policies and practices to ensure
that assets are adequately safeguarded.
The Fund acknowledged weaknesses in controls related to bank reconciliations and
authorized signatures, and stated that delays in the payment of invoices are rare. In
regards to bank collateralization, the Fund response stated that the collateralization
policy was written by the former Vice President; the Board did not adopt this policy or
direct this action. Because the Fund’s monies do not belong to the State and are not
subject to the collateral law like IMSA’s accounts are and because 501(c)(3)s do not
generally require banks to collateralize their deposits beyond the FDIC amount, the new
Vice President for Advancement decided not to continue her predecessor’s policy. The
response concluded by stating the Fund will review its cash management policies and
procedures and if appropriate, changes will be made.
In an Auditors’ Comment, we noted that the collateralization policy was followed
until Fiscal Year 2001, and that, whether one is an individual depositor or a 501 (c) (3)
corporation like the IMSA Fund, it is prudent to ensure that assets are adequately
protected from the possibility of bank failure.
AUDITORS’ OPINION
Our auditors stated the financial statements present fairly, in all material
respects, the balance sheet of the IMSA Fund as of June 30, 2001 and 2000, and related
statements of revenues and expenses and cash flows for the years then ended.
___________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KMC:ak
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were DeRaimo, Hillger, &
Ripp, CPAs.
