REPORT DIGEST

 

NORTHERN ILLINOIS UNIVERSITY FOUNDATION

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2008

AND

STATE COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2008

 

Summary of Findings:

Total this audit†††††††††††††††††††† 2

Total last audit†††††††††††††††††††† 3

Repeated from last audit††††† 2

 

 

Release Date:

April 30, 2009

 

 

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

 

This digest covers our financial audit of the Northern Illinois University Foundation (Foundation) for the year ended June 30, 2008 and our State compliance examination of the Foundation for the two years ended June 30, 2008.

 

 

 

SYNOPSIS

 

®      The Northern Illinois University Foundation did not provide the auditors with accurate financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

NORTHERN ILLINOIS UNIVERSITY FOUNDATION

FINANCIAL AUDIT AND STATE COMPLIANCE EXAMINATION

For the Period Ended June 30, 2008

 

FINANCIAL OPERATIONS

FY 2008

FY 2007

REVENUES (Operating and Nonoperating)

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

Investment income................................................

Rental income......................................................

Services contract revenue from NIU.....................

All other revenue..................................................

††††† Total revenues................................................

 

$15,585,711

(1,846,404)

966,846

538,690

†††† 559,765

15,804,608

 

$10,380,218

7,039,198

5,660

538,690

†††† 777,268

18,741,034

EXPENSES

Support for university departments and programs..

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

Foundation operations and administration..............

Scholarships and fellowships.................................

Total expenses.....................................................

Increase in net assets

 

10,281,157

1,468,481

1,390,314

1,060,259

14,200,211

$1,604,397

 

5,090,758

2,059,719

1,340,032

1,120,160

9,610,669

$9,130,365

STATEMENT OF NET ASSETS

AT JUNE 30, 2008

AT JUNE 30, 2007

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

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

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

Building construction in progress...........................

Pledges receivable, net.........................................

Other assets.........................................................

TOTAL ASSETS...............................................

 

Accounts payable and accrued liabilities................

Bonds and notes payable......................................

Deposits held for NIU Alumni Association............

Endowment administered for NIU........................

Contract payments to income beneficiaries............

TOTAL LIABILITIES......................................

 

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

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

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

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

TOTAL NET ASSETS......................................

$†† 1,427,266

56,160,049

16,995,291

-

†††††††† 5,278,866

† ††234,183

$80,095,655

 

741,731

7,236,041

2,223,897

3,232,221

† †††755,101

14,188,991

 

4,848,218

36,751,976

13,921,368

10,385,102

$65,906,664

$†† 455,540

62,343,683

4,937,552

4,540,767

11,079,315

† ††††474,853

$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

16,657,446

7,225,767

$64,302,267

FOUNDATION PRESIDENT

During Audit Period:Ms. Mallory M. Simpson

Currently:Ms. Mallory M. Simpson

 

 

 

 

 

 

 

 

 

 

The cash flow statement was not accurate

 

 

 

 

 

 


Payments for notes and bonds payable and construction were understated by $1.9 million

 

 

 

The Foundation attributed this result to insufficient resources, timeline pressure and complex transactions

 

 

 

 

 

 

FINDING, CONCLUSION, AND RECOMMENDATIONS

 

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

 

The Foundation did not provide the auditors with accurate financial statements.

 

Upon initial review of the draft statements provided by Foundation personnel, we raised various questions and made suggestions regarding the preparation of the cash flow statement.In our review we noted the following:

 

         Interest paid on note and bonds payable was understated by $153,624,

         Payments for the construction of a building for NIU was understated by $1,749,597, and

         Receipts of interest and dividend income were understated by $450,155.

 

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, page 10 in the compliance report)

 

We recommended the Foundation review its current process for preparation and review of the statement of cash flows and allocate the resources necessary to ensure a thorough review of the statement of cash flows by personnel possessing the appropriate skills and knowledge.

 

The Foundation accepted our recommendation and stated that it would carefully review opportunities to improve financial reporting.

 

OTHER FINDING

 

The other finding concerned the Foundationís lack of a formal capitalization policy.Progress toward the implementation of all recommendations will be the responsibility of the Foundationís auditors in the next audit.† †

 

 

AUDITORSí OPINION

 

Our auditors state the Foundationís financial statements as of June 30, 2008 are fairly presented in all material respects.

 

 

 

 

 

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

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

 

†††††† WGH:JAF:pp

 

 

SPECIAL ASSISTANT AUDITORS

 

Our special assistant auditors for this audit were Clifton Gunderson, LLP.