REPORT DIGEST

NORTHEASTERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  March 13, 2018

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  1 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 0 -- 0

FINDINGS LAST AUDIT: 3

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
FRANK J. MAUTINO, 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

INTRODUCTION

This digest covers the Northeastern Illinois
University’s (University) Financial Audit as
of and for the year ended June 30, 2017.  The
University’s Compliance Examination
(including the Single Audit) covering the
year ended June 30, 2017 will be issued at a
later date.

SYNOPSIS

• (17-01) The University did not have
adequate controls over financial close and
reporting.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER FINANCIAL CLOSE AND
REPORTING

The University did not have adequate controls
over financial close and reporting to allow
management or employees in the normal course
of performing their assigned functions to
prevent or detect financial statement
misstatements timely.  We noted the
following:

• The University misclassified its student
receivables and related allowance for
doubtful accounts totaling $11,241,739 and
$9,602,549, respectively, as noncurrent
assets instead of current assets on the
University’s financial statements.

• The University erroneously categorized a
portion of its student receivables aged over
365 days in the 91 to 180 days category
resulting in an understatement of bad debts
and allowance for doubtful accounts of
$753,828.

• The University misclassified the allocated
health, dental, and life insurance expenses
of operation and maintenance plant program to
the institutional support program totaling
$2,616,441.

• The University classified its revenues from
student and staff services and public service
activities as revenues of auxiliary
enterprises instead of other operating
revenues totaling $324,863 on the
University’s financial statements.

• The University did not remove the
University’s share of Excess Liquid Capital
totaling $165,518 from the University’s
Federal Perkins Loan Revolving Fund after the
return of federal share to the Department of
Education. As such, the restricted net
position for student loans and unrestricted
net assets were overstated and understated,
respectively.

• The University did not consistently ensure
noncapital assets are reported as restricted
when constraints upon the use of the
associated net positions, externally imposed
by creditors, change the availability of the
assets. As such, an adjustment to reclassify
noncapital assets totaling $1,404,363 from
unrestricted to restricted classification was
necessary.

• The University misclassified the net
position of funds restricted for repair and
replacement of the auxiliary system totaling
$412,480, as unrestricted. (Finding 1, pages
62-64)

We recommended the University review its
current process for the preparation and
review of the annual financial statements to
ensure financial information is complete,
accurate, and prepared in accordance with
GAAP.

University officials agreed with the
recommendation.

AUDITOR’S OPINION

The auditors stated the financial statements
of Northeastern Illinois University as of and
for the year ended June 30, 2017 are fairly
stated in all material respects.

This financial audit was conducted by E.C.
Ortiz & Co., LLP.

JANE CLARK
Division Director

This report is transmitted in accordance with
Section 3-14 of the Illinois State Auditing
Act.

FRANK J. MAUTINO
Auditor General

FJM:JGR