REPORT DIGEST

NORTHERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  May 18, 2022

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT – TOTAL8
Category 1:  0 -- 1 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 1 -- 1

FINDINGS LAST AUDIT: 1

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 Northern
Illinois University’s (University)
Financial Audit as of and for the year
ended June 30, 2021.  The University’s
Compliance Examination and Single
Audit will be issued in separate
reports at a later date.

SYNOPSIS

• (21-1) The University did not have
adequate internal control over
reporting its census data and did not
have a reconciliation process to
provide assurance census data
submitted to its pension and other
postemployment benefits plans was
complete and accurate.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER
CENSUS DATA

Northern Illinois University
(University) did not have adequate
internal control over reporting its
census data and did not have a
reconciliation process to provide
assurance census data submitted to its
pension and other postemployment
benefits (OPEB) plans was complete and
accurate.

Census data is demographic data (date
of birth, gender, years of service,
etc.) of the active, inactive, or
retired members of a pension or OPEB
plan.  The accumulation of inactive or
retired members’ census data occurs
before the current accumulation period
of census data used in the plan’s
actuarial valuation (which eventually
flows into each employer’s financial
statements), meaning the plan is
solely responsible for establishing
internal controls over these records
and transmitting this data to the
plan’s actuary.  In contrast,
responsibility for active members’
census data during the current
accumulation period is split among the
plan and each member’s current
employer(s).  Initially, employers
must accurately transmit census data
elements of their employees to the
plan.  Then, the plan must record and
retain these records for active
employees and then transmit this
census data to the plan’s actuary.

We noted the University’s employees
are members of both the State
Universities Retirement System (SURS)
for their pensions and the State
Employees Group Insurance Program
sponsored by the State of Illinois,
Department of Central Management
Services (CMS) for their OPEB.  In
addition, we noted these plans have
characteristics of different types of
pension and OPEB plans, including
single employer plans and cost-sharing
multiple-employer plans.  Finally,
CMS’ actuaries use census data for
employees of the State’s public
universities provided by SURS along
with census data for the other
participating members which is
provided by the State’s four other
pension plans to prepare the
projection of the OPEB plan’s
liabilities.

During testing we noted the following:

• The University had not performed an
initial complete reconciliation of its
census data recorded by SURS and CMS
to its internal records to establish a
base year of complete and accurate
census data.

• After establishing a base year, the
University had not developed a process
to annually obtain from SURS and CMS
the incremental changes recorded by
SURS and CMS in their census data
records and reconcile these changes
back to the University’s internal
supporting records.  (Finding 1, Pages
5-8)

We recommended the University work
with SURS to annually reconcile its
active members’ census data from its
underlying records to a report of
census data submitted to SURS’ actuary
and CMS’ actuary.  After completing an
initial full reconciliation, the
University may limit the annual
reconciliations to focus on the
incremental changes to the census data
file from the prior actuarial
valuation, provided no risks are
identified that incomplete or
inaccurate reporting of census data
may have occurred during prior
periods.  Any errors identified during
this process should be promptly
corrected by either the University or
SURS, with the impact of these errors
communicated to both SURS’ actuary and
CMS’ actuary.

University officials agreed with the
finding.

AUDITOR’S OPINION

The auditors stated the financial
statements of the University as of and
for the year ended June 30, 2021 are
fairly stated in all material
respects.

This financial audit was conducted by
CliftonLarsonAllen, 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:TLK