REPORT DIGEST

 

NORTHEASTERN ILLINOIS UNIVERSITY FOUNDATION

 

FINANCIAL AUDIT

For the One Year Ended:

June 30, 2007

 

COMPLIANCE ATTESTATION EXAMINATION

For the Two Years Ended:

June 30, 2007

 

Summary of Findings

Total this audit†††††††††††††          1

Total last audit†††††††††††††          0

Repeated from last audit        0

 

Release Date:

November 15, 2007

 

Image of Illinois State Seal

 

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 http://www.auditor.illinois.gov

 

 

 

 

 

 

SYNOPSIS

 

†††††

        The Foundation did not properly interpret and apply Government Accounting Standards Board Statement No. 33 Accounting and Financial Reporting for Nonexchange Transactions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


NORTHEASTERN ILLINOIS UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the Year Ended June 30, 2007

COMPLIANCE ATTESTATION EXAMINATION

For the Two Years Ended June 30, 2007
 

FINANCIAL OPERATIONS (ALL FUNDS)

FY 2007

FY 2006

REVENUES (Operating and Nonoperating)

††† Contributions....................................................................

††† Investment Income............................................................

††† University Support............................................................

††† Permanent Endowment Additions......................................

††† Other................................................................................

†††† †††† Total Revenues...........................................................

 

 

$ 297,352

525,923

91,296

110,553

††† 9,714

$ 1,034,838

 

 

$ 250,954

213,471

67,756

60,141

††† 8,257

$ 600,579

EXPENSES

††† Scholarships and Fellowships........................................

††† University Support........................................................

††† Institutional Support..........................................................

††† Fundraising.......................................................................

††† Grants and awards............................................................

†††† †††† Total Expenditures......................................................

††††

Increase in Net Assets..........................................................

 

$111,205

91,296

203,323

81,292

53,455

$ 540,571

 

$494,267

 

$150,690

67,756

205,527

84,573

19,128

$ 527,674

 

$ 72,905

SELECTED ACCOUNT BALANCES

(ALL FUNDS)

AT JUNE 30, 2007

AT JUNE 30, 2006

Cash and cash equivalents.....................................................

Short term investments..........................................................

Endowment investments........................................................

Other Assets.........................................................................

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

 

Accounts payable and accrued expenses...............................

Deferred revenues.................................................................

Net Assets............................................................................

Total Liabilities and Net Assets.............................................

$†††††† 166,389

1,981,695

2,663,481

†††††† 23,266

$ 4,834,831

 

$†††††† 6,042

752,888

4,075,901

$ 4,834,831

$†††††† 182,434

1,046,060

2,344,759

†††††† 24,839

$ 3,598,092

 

$†††††† 16,458

0

3,581,634

$ 3,598,092

FOUNDATION EXECUTIVE DIRECTOR

††† During Audit Period: Terry Bush

††† Currently: Terry Bush

 

 

 

 

 

 

 

††

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


$752,888 was recorded as other revenue instead of being deferred

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

FAILURE TO APPLY APPROPRIATE ACCOUNTING PRINCIPLES

 

††††† The Foundation did not properly interpret and apply Government Accounting Standards Board (GASB) Statement No. 33 Accounting and Financial Reporting For Nonexchange Transactions.

 

††††† The Foundation received $752,888 from Northeastern Illinois University (University) to set up a Gaining Early Awareness and Readiness for Undergraduate Program (GEAR UP) scholarship.The amount represented unspent grant funds from the GEAR UP program that the University had obtained the approval from the U.S. Department of Education to change the scope from the original proposal to establish a scholarship component for this program.

 

††††† The policy for the administration of the scholarship includes requirements for the eligibility of applicants, application process, requirement for the award, eligibility for renewal, renewal application process, the amounts and use of the scholarship funds, and the role of the Chicago GEAR UP Alliance (Alliance).The funds will be administered locally by the Alliance and awarded as scholarships to students who had participated in the GEAR UP program.The Foundation will hold and spend the funds as directed by the Alliance.

 

††††† As of fiscal year-end, the funds were invested and restricted for use by this program and no scholarships have been awarded.However, we noted that the Foundation recorded the $752,888 as other revenue, instead of deferred revenue.The Foundation subsequently revised the financial statements to include the adjustments necessary to apply the appropriate generally accepted accounting principles.

 

††††† According to Foundation management, the above exception occurred due to the complexity of the GEAR UP grant requirements which were not fully known at the time of receipt of the grant. (Finding 1, pages 29-30)

 

††††† We recommended the Foundation improve its procedures for identifying transactions that include special terms and properly account for such transactions in accordance with accounting principles generally accepted in the United States of America.

 

††††† Foundation management concurred with the finding and stated that they will strengthen their procedures.

 

AUDITORSí OPINION

 

††††† Our auditors stated the financial statements of Northeastern Illinois University Foundation as of June 30, 2007, and for the year then ended, are fairly presented in all material respects.

 

 

 

___________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:TLK:pp

 

SPECIAL ASSISTANT AUDITORS

 

††††† Our special assistant auditors for this audit were E.C. Ortiz & Co, LLP.