REPORT DIGEST

 

 

ILLINOIS STATE UNIVERSITY FOUNDATION

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2004

 

COMPLIANCE EXAMINATION

For the Two Years Ended

June 30, 2004

 

Summary of Findings:

Total this audit 2

Total last audit 3

Repeated from last audit 1

 

Release Date:

 March 16, 2005

 

 

 

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

 

 

 

SYNOPSIS

 

        The Foundation did not submit the annual Fiscal Control and Internal Audit Act Certification to the Auditor General by May 1, 2004.

 

        The Foundation and University Athletic Department did not properly control pre-numbered raffle tickets.

 

 

 


ILLINOIS STATE UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the Year Ended June 30, 2004

COMPLIANCE EXAMINATION

For the Two Years Ended June 30, 2004

 

 

FINANCIAL OPERATIONS (ALL FUNDS)

 

FY2004

 

FY2003

 

OPERATING REVENUES

 

 

 

Service contract with University.....................................

$260,000

$260,000

 

Other Operating Revenues.............................................

68,808

53,636

 

Total Operating Revenues.........................................

328,808

313,636

 

OPERATING EXPENSES

 

 

 

Student Aid, scholarships and awards............................

$1,373,482

$1,231,391

 

Expenditures on behalf of ISU departments and programs

 

2,753,526

 

2,496,724

 

Other Operating Expenses.............................................

775,324

839,926

 

Total Operating Expenses..........................................

4,902,332

4,568,041

 

Operating loss.........................................................

($4,573,524)

($4,254,405)

 

NONOPERATING REVENUES (EXPENSES)

 

 

 

Contributions gifts and donations................................

$8,891,957

$4,961,793

 

Interest on capital related debt.......................................

(43,208)

(43,090)

 

Investment income (loss)...............................................

5,918,503

905,048

 

Expenditures for ISU capital projects.............................

(3,845,997)

(693,267)

 

Other............................................................................

757,354

617,799

 

Net nonoperating revenues......................................

$11,678,609

$5,748,283

 

Income before additions to permanent endowments.......

$7,105,085

$1,493,878

 

Additions to permanent endowments.............................

$4,856,118

$3,931,270

 

Increase in net assets...............................................

$11,961,203

$5,425,148

 

 

 

 

 

NET ASSETS

 

 

 

Net Assets-beginning of year ........................................

$54,065,362

$48,640,214

 

Net Assets-end of year.................................................

$66,026,565

$54,065,362

 

 

 

 

 

 

OTHER SIGNIFICANT ACCOUNT BALANCES

AT JUNE 30, 2004

AT JUNE 30, 2003

 

Cash and Investments........................................................

$57,304,228

$47,571,298

 

Total Assets....................................................................

$68,397,163

$55,540,274

 

Long-Term liabilities...........................................................

$1,187,741

$1,221,570

 

Total Liabilities...............................................................

$2,370,598

$1,474,912

 

Net Assets Restricted-Nonexpendable............................

$38,426,543

$28,525,765

 

Net Assets Restricted-Expendable..................................

$26,150,982

$24,405,518

 

Total Net Assets.............................................................

$66,026,565

$54,065,362

 

 

MANAGING DIRECTOR

During Audit Period: Dr. Susan Kern

Currently: Dr. Susan Kern

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Late submission of Fiscal Control and Internal Audit Act Certification to the Auditor General

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individuals selling raffle tickets were not required to return unsold tickets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

 

Our report covers the financial audit of the Illinois State University Foundation for the fiscal year ended June 30, 2004 and a compliance examination for the two years ended June 30, 2004.

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

CERTIFICATION OF INTERNAL CONTROLS NOT SUBMITTED ON TIME

 

The Foundation did not submit the annual Fiscal Control and Internal Audit Act Certification to the Auditor General by May 1, 2004. The Foundation submitted the annual Fiscal Control and Internal Audit Act Certification to the Auditor General on June 3, 2004.

 

The Fiscal Control and Internal Auditing Act (30 ILCS 10/3003) requires the chief executive officer of all State agencies to prepare a certification stating whether the systems of internal controls comply with requirements of the Act and submit the certification to the Auditor General by May 1st of each year. (Finding 1, page 8)

 

The Foundation stated the failure to submit the certification by May 1st was due to oversight.

 

We recommended the Foundation comply with the Fiscal Control and Internal Auditing Act and submit the certification by May 1st.

 

Foundation officials agreed with our recommendation and stated they will submit the annual certification by May 1st.

 

 

NEED TO IMPROVE CONTROLS OVER RAFFLE TICKETS

 

The Foundation and University Athletic Department did not properly control pre-numbered raffle tickets. The proceeds of the raffle went to the Foundation.

 

During our testing we noted the Athletic Department held a raffle to benefit athletics during both fiscal year 2004 and 2003. Approximately 30,000 tickets were distributed for sale for each of the fiscal years 2004 and 2003. The individuals selling the tickets were not required to return unsold tickets. The estimated value of unsold tickets is $101,000 and $107,000. The events generated $49,269 and $42,659 of revenue for the Foundation in fiscal years 2004 and 2003, respectively.

 

Failure to adequately control raffle tickets and receipts does not promote accountability. (Finding 2, page 9) This finding was first reported in 1998.

 

The Foundation indicated that the Athletic Department does not have a system for accounting for unsold tickets.

 

We recommended that the Foundation work with the Athletic Department to develop and implement procedures to track pre-numbered raffle tickets. We also recommended the Athletic Department account for all unsold tickets to ensure all funds raised have been properly turned over to the Foundation.

 

Foundation officials agreed with our recommendation and stated they will work with the Athletic Department to develop and implement procedures to track pre-numbered raffle tickets including a reconciliation of funds received and unsold tickets. (For previous University response, see Digest Footnote)

 

Ms. Ronda Queen, financial coordinator, provided Foundation responses in correspondence dated February 8, 2005.

 

 

AUDITORS' OPINION

 

Our auditors state the financial statements of the Illinois State University Foundation as of June 30, 2004, and for the year then ended, are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:CML:pp

 

 

 

SPECIAL ASSISTANT AUDITORS

 

Our special assistant auditors for this engagement were Clifton Gunderson LLP.

 

DIGEST FOOTNOTE

 

LACK OF CONTROLS OVER PRE-NUMBERED RAFFLE TICKETS Previous Foundation Response

 

2002: Accepted. The Foundation will work with the University Athletic department personnel to formalize written procedures for handling raffle ticket sales. The procedures will include an accounting of all pre-numbered tickets and funds collected.