REPORT DIGEST

 

NORTHERN ILLINOIS UNIVERSITY FOUNDATION

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2007

 

 

Summary of Findings:

(Financial Audit)

Total this audit†††††††††††††††††††† 3

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

Repeated from last audit††††† 0

 

 

 

Release Date:

March 25, 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

http://www.auditor.Illinois.gov

 

 

 

 

 

 

INTRODUCTION

 

This report contains findings pertaining to the Financial Statement Audit.The report contains three audit findings.These findings pertain to significant deficiencies in internal control over financial reporting.

 

 

 

SYNOPSIS

(Financial Statement Findings)

 

®      The Northern Illinois University Foundation did not provide the auditors with complete and accurate financial statements and disclosures presented in accordance with generally accepted accounting principles.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{Expenditures and Activity Measures are summarized on the reverse page.}

 

 

 

 

 

 

NORTHERN ILLINOIS UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the Year Ended June 30, 2007

 

FINANCIAL OPERATIONS (ALL FUNDS)

FY 2007

FY 2006

REVENUES (Operating and Nonoperating)

Gifts.....................................................................

Investment Income...............................................

Services Contract Revenue from NIU...................

All Other Income.................................................

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

 

$10,380,218

7,039,198

538,690

†††† 782,928

$18,741,037

 

$13,919,238

3,565,157

523,074

†††† 395,455

$18,402,924

EXPENSES

Support for University Departments and Programs

Fundraising..........................................................

Foundation Operations and Administration............

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

Building and Land Transferred to University..........

Total Expenses.....................................................

 

Increase in Net Assets

 

$5,090,758

2,059,719

1,340,032

1,120,160

††††††††††††††††

$ 9,610,669

 

$9,130,365

 

$7,173,855

1,056,756

1,126,830

736,494

5,549,024

$15,642,959

 

$2,759,965

STATEMENT OF NET ASSETS

AT JUNE 30, 2007

AT JUNE 30, 2006

Cash and Cash Equivalents...................................

Investments..........................................................

Capital assets.......................................................

Building Construction in Progress..........................

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

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

 

Accounts Payable and Accrued Liabilities.............

Bonds and Notes Payable....................................

Deposits Held for NIU Alumni Association...........

Endowment Administered for NIU.......................

Other Liabilities....................................................

Total Liabilities.....................................................

 

Net Assets

Unrestricted ........................................................

Restricted Nonexpendable...................................

Restricted Expendable..........................................

Invested in capital assets.......................................

Total Net Assets..................................................

$†† 455,540

62,343,683

4,937,552

11,079,315

5,015,620

$83,831,710

 

$2,760,118

9,851,215

2,579,917

3,602,897

†† 735,296

$19,529,443

 

 

$5,370,717

35,048,337

18,945,661

4,937,552

$64,302,267

$ 4,727,117

49,158,409

4,259,237

832,265

4,158,770

$63,135,798

 

$1,101,290

1,410,319

2,332,380

2,913,882

†† 206,025

$7,963,896

 

 

$5,367,120

29,900,664

15,644,881

4,259,237

$55,171,902

FOUNDATION PRESIDENT

During Audit Period:Mallory M. Simpson

Currently:Mallory M. Simpson

 

 

 

 

 

 

 

 

 

 

 


Incomplete and inaccurate financial statements

 

 

 

 

 

 

 

 

Construction period interest not capitalized

 

Note disclosure changes

 

 

 

 

 

 

 

 

 

 

Foundation attributes conditions to insufficient resources, timeline pressure and complex transactions

 

 

 

 

 

 

 


Foundation agrees with auditors

 

 

 

 

FINDING, CONCLUSION, AND RECOMMENDATIONS

 

††††††††††† FINANCIAL STATEMENT PREPARATION

 

The Foundation did not provide the auditors with complete and accurate financial statements and disclosures presented in accordance with generally accepted accounting principles.

 

Upon initial review of the draft statements provided by Foundation personnel, we raised various questions and made suggestions regarding the accounting for and/or presentation of the following accounts, transactions and disclosures.They included:

 

        An adjustment to capitalize construction period interest in the amount of $389,945.This change resulted in net changes to the cash flows statement.

        Modification to note disclosures for required information.Some of the necessary changes addressed:

    1. Remaining commitments on construction contract and certain limited partnerships.

    2. Future debt service requirements displaying both principal and interest requirements.

    3. Disclosures for cash and investments.

        The amount of accrued compensated absences reported was overstated by $71,064.

 

According to Foundation personnel, a number of factors contributed to this result.Significant new and complex transactions, balancing insufficient resources and timeline pressure led to a less than optimal process for review.(Finding 1, pages 5-6)

 

We recommended the Foundation review its current process for preparation and review of the annual financial statements.

 

 

Foundation officials agreed with our recommendation and stated that it would carefully review the opportunities to improve the financial reports.

 

OTHER FINDINGS

 

The other findings concerned the Foundationís lack of a formal capitalization policy and lack of a formal fraud prevention and detection program.

 

 

AUDITORSí OPINION

 

 

††††††† Our auditors state the Foundationís financial statements as of June 30, 2007 are fairly presented in all material respects.

 

 

 

 

††††††††††††††††† ______________________________________

††††††††††††††††††† WILLIAM G. HOLLAND, Auditor General

 

†††††† WGH:JAF:pp

 

 

SPECIAL ASSISTANT AUDITORS

 

Clifton Gunderson, LLP were our special assistant auditors on this audit.