NORTHEASTERN ILLINOIS UNIVERSITY
For the Year Ended June 30, 2010
Summary of Findings:
Total this audit: 1
Total last audit: 0
Repeated from last audit: 0
Release Date: January 27, 2011
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
This report contains only the finding pertaining to the Financial Statement Audit.
The State Compliance Examination and Federal Single Audit Reports will be issued at a later date.
• The University did not properly interpret and apply Generally Accepted Accounting Principles in recognizing grant revenue.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) NOT PROPERLY APPLIED TO GRANT REVENUE RECOGNITION
The University did not properly interpret and apply GAAP in recognizing grant revenue.
During our audit we requested documentation to support four grant revenue deferrals included in the University’s financial statements. Upon review of the grant agreements provided along with related documentation, we noted that revenue for two of the grants tested should have been recognized during the audit period rather than deferred to subsequent periods.
In one case, the grant was for the purchase of services. Under GAAP, revenue for services provided during the period should have been recognized. The second grant was a voluntary nonexchange transaction which did not stipulate an eligibility requirement. Under GAAP, revenue for this grant should have been recognized in the period received. The actual error identified was $123,753. The auditors have recorded a passed adjustment of the projected error in the amount of $199,602.
Failure to maintain accounting records and present financial reports in accordance with GAAP distorts the net assets of the University ad the State. (Finding 1, Page 50)
We recommended that the University improve its system for determining the timing of grant revenue recognition to properly account for such transactions in accordance with GAAP.
University officials concurred with the recommendation.
Our auditors state the June 30, 2010 financial statements are fairly presented in all material respects.
WILLIAM G. HOLLAND
SPECIAL ASSISTANT AUDITORS
Clifton Gunderson LLP was our special assistant auditors.