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REPORT DIGEST NORTHERN FINANCIAL
AUDIT For the Year Ended: June 30, 2007 AND STATE COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2008 Summary of Findings: Total this audit 1 Total last audit 2 Repeated from last audit 1 Release Date: April 30, 2009
State of
Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL
To obtain a copy of the
Report contact: Office of the Auditor
General
(217) 782-6046 or TTY (888)
261-2887 This Report Digest and the
Full Report are also available on the worldwide web at
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INTRODUCTIONThis digest covers our financial audit of the Northern
Illinois University Alumni Association (Alumni Association) for the year
ended June 30, 2008 and our State compliance examination of the Association
for the two years ended June 30, 2008.
SYNOPSIS¨ The Alumni Association did not have a formal fraud risk assessment in place. {Expenditures and Activity
Measures are summarized on the reverse page.} |
NORTHERN
FINANCIAL AUDIT AND STATE COMPLIANCE EXAMINATION
For the Period Ended June 30, 2008
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FINANCIAL OPERATIONS |
FY
2008 |
FY
2007 |
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REVENUES
(Operating and Nonoperating) Gifts..................................................................... Royalties.............................................................. Program support from NIU President allocation Investment income (loss)...................................... Total
revenues................................................ |
$57,314 45,371 - (104,421) (1,736) |
$55,050 68,256 10,000 340,147 473,453 |
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EXPENSES Scholarships and fellowships................................. Alumni relations, outreach, events and travel.........
Total expenses............................................... Increase (Decrease) in Net Assets |
43,000 358,525 401,525 $(403,261) |
53,000 193,542 246,542 $226,911 |
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STATEMENT
OF NET ASSETS |
AT
JUNE 30, 2008 |
AT
JUNE 30, 2007 |
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Cash and cash equivalents.................................... Prepaid expenses and other receivables................ Cash and Investments Administered by NIU
Foundation..................................................... Total Assets......................................................... Total Liabilities..................................................... Unrestricted Net Assets....................................... Restricted Non-expendable Net Assets................ Restricted Expendable Net Assets........................ Total Net Assets.................................................. |
2,223,897 2,266,110 156,720 1,706,227 123,585 279,578 $2,109,390 |
2,579,917 2,623,207 110,556 2,084,961 136,466 291,224 $2,512,651 |
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ASSOCIATION OFFICIALS |
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During Audit Period: Mr.
Joseph Matty (as of July 1, 2007); Mr. Michael Malone (Interim) (through June
30, 2007) Currently: Mr. Joseph
Matty |
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No formal fraud risk assessment program
is in place
The Alumni Association disagreed with our
recommendation
Auditors’ comment |
FINDING, CONCLUSION, AND
RECOMMENDATIONS FRAUD
PREVENTION AND DETECTION PROGRAM The Northern Illinois University Alumni Association (Alumni Association) did not have a formal fraud risk assessment program in place. The Alumni Association relies on current internal controls that have been put in place as well as several other key policies and practices to prevent and detect fraud but has not established a formal program to assess the specific risks associated with fraud. The Alumni Association is responsible for the development of internal controls and monitoring of their operating effectiveness. Additionally, it is management’s responsibility to establish reasonable controls to prevent and detect fraud. Management officials stated they believe the Association has adequate policies and procedures in place to address fraud risks. (Finding 1, pages 10-11 in the compliance report) We recommended that management establish and clearly document a continuous fraud prevention, deterrence and detection program. This program should include evaluating whether appropriate internal controls have been implemented in any areas identified as posing a higher risk of fraudulent activity. The Alumni Association disagreed with our recommendation and stated that a great deal of time and effort has been invested in researching best practices and in creating and implementing policies and practices to prevent and detect fraud. In an auditor’s comment we noted that the Alumni
Association was not able to provide any evidence during the course of our
audit work that it had established a formal fraud risk assessment
program. AUDITORS’ OPINIONOur auditors state the Alumni Association’s financial statements as of June 30, 2008 are fairly presented in all material respects. ______________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORSOur special assistant auditors for this audit were Clifton Gunderson, LLP. |