REPORT DIGEST ILLINOIS STATE UNIVERSITY Financial Audit, Single Audit, and Compliance Examination For the Year Ended June 30, 2014 Release Date: January 15, 2015 FINDINGS THIS AUDIT: 5 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 1 -- 1 Category 2: 1 -- 3 -- 4 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 4 -- 5 FINDINGS LAST AUDIT: 7 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 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 Full Report are also available on the worldwide web at www.auditor.illinois.gov SYNOPSIS • (14-01) The University had weaknesses in the University’s internal controls over compliance with the College Student Immunization Act. • (14-03) The University did not always ensure compliance with the University Faculty Research and Consulting Act and University policies regarding outside employment. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO IMPROVE INTERNAL CONTROLS OVER COMPLIANCE WITH THE COLLEGE STUDENT IMMUNIZATION ACT The Illinois State University (University) had weaknesses in the University’s internal controls over compliance with the College Student Immunization Act (Act). While the University had begun implementing new policies to ensure compliance with the Act, the University continued to have erroneous data within its health records. The auditors noted 18 students who were either erroneously reported as immune, reported as not immune who were exempted from complying with the Act, duplicated within the records, or missing from the dataset. In response to the auditors’ notification to the University of these conditions, Student Health Services performed a review of the students enrolled and attending classes in Fall 2013 who were identified by the University as likely to have been included within the potential population of noncompliant students who should have been precluded from enrolling in classes during Fiscal Year 2014. The University’s review indicated the following: • 16 students were enrolled and attending classes when they should have been blocked from registration. • Five students were erroneously coded as “on campus” when they were actually “off campus” students. • The University’s computer system was identifying students as noncompliant when the student was actually either in compliance with the Act or deferred by the University from having to meet the compliance requirement for medical reasons. According to University officials, these errors were due to oversight and computer coding problems. (Finding 1, pages 18-20) We recommended the University review, improve, and maintain a system of internal controls to monitor covered student compliance, identify noncompliant students and preclude them from enrolling in subsequent academic terms, and accurately report information to the Department of Public Health. University officials agreed with the recommendation. NEED TO IMPROVE COMPLIANCE WITH THE UNIVERSITY FACULTY RESEARCH AND CONSULTING ACT The University did not always ensure compliance with the University Faculty Research and Consulting Act and University policies regarding outside employment. During testing, the auditors noted the following: • 42 of 135 (31%) cases of outside employment had the Request for Approval of Secondary/Outside Employment Form approved by the University’s Provost one to 199 days late. • 36 of 135 (27%) cases of outside employment were not reported by the faculty member to the University for approval prior to filing the Annual Report of Secondary/Outside Employment Form with the University’s Provost before the deadline of August 31, 2014. • 24 of 135 (18%) cases of outside employment did not have the Annual Report of Secondary/Outside Employment Form submitted by the faculty member to the University’s Provost by the deadline of August 31, 2014. According to University officials, the failure to seek timely approval and file reports was due to employee oversight. (Finding 3, pages 23-24) This finding has been repeated since 2012. We recommended the University Provost implement internal controls to ensure faculty members with outside research, consulting services, or employment receive written pre- approval to conduct the requested activity and annually disclose the time spent on these activities in accordance with State law and University policy. University officials agreed with the recommendation and stated they will continue to assess the process and implement modifications to improve compliance. (For the previous University response, see Digest Footnote #1.) OTHER FINDINGS The remaining findings pertain to (1) weaknesses regarding the security and control of confidential information; (2) inadequate controls over contractual agreements; and, (3) noncompliance with the State Officials and Employees Ethics Act. These findings are reportedly being given attention by the University. We will review the University’s progress towards the implementation of our recommendations in our next audit. AUDITOR’S OPINIONS The auditors stated the financial statements of the Illinois State University as of and for the year ended June 30, 2014, are fairly stated in all material respects. The auditors also conducted a Single Audit of the University as required by OMB Circular A-133. Our auditors stated the University complied, in all material respects, with the types of compliance requirements that could have a direct and material effect on each of the University’s major federal programs for the year ended June 30, 2014. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the University for the year ended June 30, 2014, as required by the Illinois State Auditing Act. The auditors qualified their report on State compliance for Finding 2014-001. Except for the noncompliance described in this finding, the auditors stated the University complied, in all material respects, with the requirements described in the report. WILLIAM G. HOLLAND Auditor General WGH:djn SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for the audits and examination were BKD, LLP. DIGEST FOOTNOTES #1 - Noncompliance with the University Faculty Research and Consulting Act - Previous University Response 2013: The University agrees with the recommendation and will continue its assessment of the faculty research and consulting approval process and implement modifications to ensure more timely approvals and annual disclosures of outside research, consulting, and employment activities.