REPORT DIGEST
NORTHERN ILLINOIS
UNIVERSITY COMPLIANCE EXAMINATION
(In accordance with the Federal Single
Audit Act and OMB Circular A-133) For the Year Ended: June 30, 2007 Summary of
Findings: Total this year - Financial Audit 2* - Compliance Audit 4 6 Total last year - Financial Audit 2* - Compliance Audit 2 4 Repeated from last year - Financial Audit 1* - Compliance Audit 1 2 *Financial Audit Previously Released Release Date: May 22, 2008
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 |
INTRODUCTION
The Financial Audit for the year ended June 30, 2007 was previously released on March 25, 2008. That audit contained two findings which pertained to significant deficiencies in internal control over financial reporting (numbers 1-2) and one prior year finding not repeated (number 3). This report addresses findings pertaining to the State Compliance Examination and Federal Single Audit conducted in accordance with OMB Circular A-133. In total this document contains four audit findings (numbers 4-7).
SYNOPSIS
·
The
University understated its cash and investment balances reported to the
Illinois Office of the Comptroller on its locally held funds report for June
30, 2007 by $31 million.
·
The
University did not obtain timely approval for outside research or consulting
activities.
{Expenditures and Activity Measures are summarized on the next page.}
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NORTHERN ILLINOIS UNIVERSITY
COMPLIANCE
EXAMINATION
(In
Accordance with the Single Audit Act and OMB Circular A-133)
For The Year Ended
June 30, 2007
COMPARATIVE
SCHEDULE OF INCOME FUND REVENUES AND EXPENSES
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FY 2007
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FY 2006
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INCOME FUND REVENUES
Tuition, net
of waivers...........................................................
Material fees........................................................................
Extension...............................................................................
Interest
income.....................................................................
Other...................................................................................
Total Income Fund Revenues.........................................
INCOME FUND EXPENSES
Personal
services..................................................................
FICA/Medicare....................................................................
Contractual
services..............................................................
Travel..................................................................................
Commodities.........................................................................
Award/grants
and matching funds..........................................
Equipment and
library books..................................................
Telecommunications...............................................................
Automotive...........................................................................
Capital
repairs and permanent improvements..........................
CMS health
insurance...........................................................
Unemployment
compensation benefits....................................
Total Income Fund Expenses.......................................... |
$97,087,230
5,496,245
5,346,207
2,298,091
1,028,749 $111,256,522
$65,003,835
1,666,255
22,622,266
1,102,634
1,801,989
1,463,457
126,643
1,303,225
177,651
4,867,241
1,204,000
39,449 $101,378,645 |
$90,350,856
5,290,947
5,025,919
1,718,248
1,053,854 $103,439,824
$58,246,785
1,452,603
20,548,519
1,084,272
1,971,448
2,533,050
2,013,070
1,269,631
185,173
13,088,449 1,204,000
28,839 $103,625,839 |
SUPPLEMENTARY INFORMATION (Unaudited) |
FY 2007 |
FY 2006 |
Employment Statistics
Appropriated and Nonappropriated funds:
Faculty/administrative............................................................
Civil service..........................................................................
Student
employees................................................................
Miscellaneous
contracts.........................................................
Total Employees..............................................................
Selected Activity Measures
Fall semester enrollment – Undergraduate................................
Fall semester enrollment – Graduate.........................................
Fall semester enrollment – Professional.................................... |
2,210
1,462
521
147 4,340
17,107
3,043
385 |
2,187
1,453
533
148 4,321
16,768
3,077
415 |
UNIVERSITY PRESIDENT
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During Audit Period and
Currently: Dr. John G. Peters |
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Cash and
investments understated by $31 million
University
disagrees Auditors’
comment Outside research and
consulting not approved timely
Approvals were late Prior written approval required
The University
agreed with the recommendation but not the facts as presented Auditors’ comment
Documentation did
not support compliance
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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS NEED TO IMPROVE LOCALLY HELD FUNDS
REPORTING The University understated its cash and investment balances reported to the Illinois Office of the Comptroller on its locally held funds report for June 30, 2007 by $31 million. During our compliance examination we noted the cash and investment balance reported to the Comptroller’s Office on its quarterly “Report of Receipts and Disbursements of Locally Held Funds” (Form C17) for the quarter ended June 30, 2007 was $31 million less than the cash and investment amounts reported in its June 30, 2007 financial statements. University personnel stated that the understatement of the cash and investment balances was the result of timing differences and the basis of accounting used to prepare the different reports. (Finding 5, page 20) We recommended the University improve its procedures for preparing the locally held funds report so that year-end cash and investment balances agree to those reported in its financial statements. University officials disagreed with the finding. The University management stated it prepares and files the required form by the mandated due date of July 31 and all cash and investment activity for the fiscal year is properly disclosed by the GAAP package deadline of September 30. In an auditors’ comment auditors noted the University disagreed with the finding but did not dispute the facts as stated in the finding that cash and investments reported to the Illinois Office of the Comptroller were understated by $31 million for the quarter ended June 30, 2007. We continued to urge the University to comply with Statewide Accounting Management System Procedures and file an accurate locally held fund report by the reporting deadline. COMPLIANCE WITH UNIVERSITY FACULTY
RESEARCH AND CONSULTING ACT University faculty did not obtain timely approval for outside research or consulting activities. During our testing of 25 faculty requests for approval of outside consulting or research, we noted that 9 of the requests (36%) were not approved until after the estimated start dates for the outside consulting or research. The approvals ranged from 2 to 163 days late. The University Faculty Research and Consulting Act (110 ILCS 100/) requires “prior written approval of the President of that institution, or a designee of such President, to perform the outside research or consulting services...” University procedures require such requests be submitted to the Office of the Provost for approval prior to the start of any work. (Finding 6, pages 21-22) We recommended the University comply with the Act and communicate its procedures and the requirements of the University Faculty Research and Consulting Act to the faculty. The University agreed with the recommendation, but did not agree with the facts as presented. The form requires the faculty to give an estimated date for when their services will be used outside of the University. The external auditors have interpreted the estimated date to be the date that work is actually performed. The auditors have used the estimated date in their testing criteria as opposed to the date that the faculty signed the form. Further, University officials stated they would do a thorough review of the form to eliminate potentially confusing data elements while maintaining compliance with the Act. In an auditors’ comment auditors noted
the University’s request for approval forms for outside consulting and
research included only the estimated start date for outside consulting and
research. The University asked
auditors to correlate the faculty’s signature date with the start date of the
outside consulting and research absent any documentary evidence that any such
correlation exist. If the estimated
date used by the auditors is not valid as the University is stating in its
response, then no valid start date exists on the form. In either scenario, the University’s
documentation did not support compliance with the University Faculty Research
and Consulting Act. We continued to
recommend the University comply with the Act.
OTHER FINDINGS The
remaining findings are reportedly being given attention by the
University. We will review the
University’s progress toward the implementation of our recommendations in our
next compliance examination.
AUDITORS' OPINION We conducted a compliance examination of the University for the year ended June 30, 2007 as required by the Illinois State Auditing Act, the Single Audit Act and OMB Circular A-133. A financial audit and report required under Government Auditing Standards covering the year ending June 30, 2007 were issued separately. ___________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORS
Our special
assistant auditors were Clifton Gunderson LLP. |