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REPORT DIGEST
ILLINOIS STUDENT ASSISTANCE COMMISSION -
ILLINOIS
PREPAID TUITION PROGRAM
FINANCIAL AUDIT For the Year Ended: June 30, 2007 Release Date: March 6, 2008
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 the
Full Report are also available on the worldwide web at www.auditor.illinois.gov |
INTRODUCTION
This report covers our financial audit of the Illinois Student Assistance Commission – Illinois Prepaid Tuition Program as of June 30, 2007 and for the year then ended. SYNOPSIS ¨ The Illinois Student Assistance Commission does not have sufficient controls over the financial reporting process for the Illinois Prepaid Tuition Program. {Expenditures and Activity Measures are summarized on the reverse page.} |
ILLINOIS STUDENT ASSISTANCE COMMISSION
PREPAID TUITION PROGRAM
FINANCIAL AUDIT
For The Year Ended June 30, 2007 (In Thousands)
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FINANCIAL
OPERATIONS |
2007 |
2006 |
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OPERATING REVENUES Income from investment securities....................... Application and other fees.................................. Interest income (other)....................................... TOTAL...................................................... OPERATING EXPENSES Accreted tuition expenses................................... Management and professional services............. Investment management fees.............................. Salaries and employee benefits........................... TOTAL...................................................... Net Operating Income (Loss).............................. Transfer out............................................................. Change in Net Assets........................................... Net Assets (Deficit), July 1....................................... Net Assets (Deficit), June 30............................... |
$124,331 2,259 533 $127,123 $54,684 3,179 3,042 736 $61,641 $65,482 (25) $65,457 (29,135) $36,322 |
$49,329 2,342 419 $52,090 $44,367 3,002 2,621 740 $50,730 $1,360 (25) $1,335 (30,470) $(29,135) |
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SELECTED BALANCE
SHEET ACCOUNTS |
June 30, 2007 |
June 30, 2006 |
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Cash and cash equivalents........................................ Investments and marketable securities....................... Current Liabilities: Tuition
payable.................................................. Accreted tuition payable..................................... Other current liabilities........................................ Total current liabilities................................... Tuition & accretion payable, long-term..................... Net Assets, (deficit)................................................. |
$ 7,268 986,333 28,832 2,170 1,071 $32,073 $925,199 $36,322 |
$10,746 777,302 24,758 1,863 920 $27,541 $789,628 $(29,135) |
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ACTUARIAL (DEFICIT) as of June 30 - Per Actuarial Reports |
2007 |
2006 |
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Net assets, before tuition/accretion payable.............. Add - Actuarial present value of future payments expected to be made by contract purchasers... Deduct - Actuarial present value of future payments expected to be paid by the program......... Actuarial (deficit) as of June 30................................ Contracts purchased and outstanding....................... |
$992,522 187,396 (1,264,132) $(84,214) 50 |
$787,114 186,468 (1,120,511) $(146,929) 47 |
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AGENCY DIRECTOR(S) |
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During Audit Period: Mr. Andrew Davis (1/1/07-Current); Mr. Larry E. Matejka
(7/1/06-12/31/06) Currently:
Mr. Andrew Davis |
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Insufficient controls
Certain financial statement disclosures
were not properly calculated
Commission relies on contractual
investment advisor |
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO
IMPROVE CONTROLS OVER FINANCIAL REPORTING The Illinois Student Assistance
Commission (Commission) does not have sufficient controls over the financial
reporting process. During our review of the draft financial
statements of the Illinois Prepaid Tuition Program (the Program), the
disclosures related to the multiple ratings of securities as required by the
Governmental Accounting Standards Statement No. 40, Deposit and Investment Risk Disclosures were not properly
calculated by the Commission. These disclosures were subsequently corrected
and are properly disclosed on the final financial statements. The Program’s
investments subject to these disclosures totaled approximately $994 million. Commission
officials stated that they rely on their contractual investment advisor to
prepare this information. (Finding 1, page 30). Commission officials agreed with our recommendation to strengthen internal controls over financial reporting and stated it would implement quality control procedures. OTHER FINDING The remaining finding concerned the Commission’s internal audit program. We will review progress toward implementation of all recommendations during the next audit.
AUDITORS’ OPINION Our auditors stated the financial statements of the Program are fairly presented in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were McGladrey & Pullen, LLP. |