REPORT DIGEST

SOUTHERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  March 20, 2018

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 0

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 Southern Illinois
University Financial Audit as of and for the
year ended June 30, 2017.  Southern Illinois
University’s financial audit report consists
of three sets of financial statements as
follows - the financial statements of
Southern Illinois University (the
“University”); the financial statements of
the Housing and Auxiliary Facilities System
(HAFS), a segment financial report of the
University issued for bondholders; and the
Medical Facilities System (MFS), a segment
financial report of the University issued for
bondholders.

The University’s Compliance Examination
(including the Single Audit) covering the
year ended June 30, 2017 will be issued in a
separate report at a later date.

SYNOPSIS

• (17-1) The University did not ensure all
restrictions from revenue bond covenants were
properly reflected within the University’s
financial statements.

FINDING, CONCLUSION, AND RECOMMENDATION

INADEQUATE CONTROL OVER REPORTING FINANCIAL
STATEMENT ACCOUNTS

The University did not ensure all
restrictions from revenue bond covenants, as
well as classification between unrestricted
and restricted current and noncurrent cash
and investments, were properly reflected
within the financial statements.

The University had not designed its internal
controls to ensure accurate reporting of
restricted assets and restricted net position
under generally accepted accounting
principles. Also, flaws in the University’s
pooled investments allocation methodology
resulted in $45 million in overstated
restricted cash and understated restricted
investments in the draft financial
statements.  (Finding 1, pages 5-7)

We recommended the University periodically
review its internal controls over financial
reporting to provide assurance accounts are
properly classified under generally accepted
accounting principles.

The University agreed with the finding and
stated necessary reclassifications were made
to ensure the accuracy of the financial
statements. Management also noted that there
has been no misuse of restricted operating
funds of the closed systems.

We will review the Agency’s progress towards
implementation of our recommendation in our
next financial audit.

AUDITOR’S OPINION

The auditors stated the financial statements
of the University, HAFS, and MFS as of and
for the year ended June 30, 2017 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

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