REPORT DIGEST

UNIVERSITY OF ILLINOIS

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2019

Release Date:  January 16, 2020

FINDINGS THIS AUDIT:  2

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

FINDINGS LAST AUDIT: 4

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

The University’s financial audit report
consists of three sets of financial
statements as follows – the financial
statements of the University, the revenue
bond financial statements of the Auxiliary
Facilities System and the Health Services
Facilities System.

This digest covers the University of
Illinois’s Financial Audit as of and for the
year ended June 30, 2019.  The University’s
Compliance Examination (including Single
Audit) will be issued in a separate report
at a later date.

SYNOPSIS

• (19-1) The University has not established
adequate internal controls over accurately
identifying and recording deferred expense
transactions and reporting prepaid expenses
at fiscal year-end for financial reporting
purposes.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE PROCEDURES OVER EXPENSE DEFERRALS
AND OTHER CUT-OFF RELATED ISSUES

The University has not established adequate
internal controls over accurately
identifying and recording deferred expense
transactions and reporting prepaid expenses
at fiscal year-end for financial reporting
purposes.

In relation to our test work over expense
transactions, we reviewed 225 cash
disbursement transactions (totaling
$30,122,686), 60 P-Card expense transactions
(totaling $368,921), and 60 T-Card expense
transactions (totaling $234,802) recorded
during the fiscal year.  In relation to our
test work over revenue transactions, we
reviewed 60 cash receipt transactions
recorded during the fiscal year (totaling
$52,459,178). We also reviewed 18 cash
disbursements occurring subsequent to year-
end (totaling $67,263,877).  Additionally,
we separately reviewed 14 internal journal
voucher transactions recorded during the
fiscal year (totaling $1,054,912).

During our review of these transactions,
some of the items that were not recorded in
the proper accounting period are as follows:
• Three general and service expense cash
disbursements (totaling $208,425) that were
recorded as expenses for fiscal year ended
June 30, 2019, should have been fully
accrued as of June 30, 2018.
• One travel expense cash disbursement
(totaling $6,821) that was recorded as
expense for fiscal year ended June 30, 2019,
should have been fully accrued as of June
30, 2017.
• One telecommunication expense (totaling
$33,625) that was recorded as expense for
the fiscal year ended June 30, 2019, should
have been partially deferred as of June 30,
2019 at an amount of $30,614, and then
recognized as expenses for the fiscal year
ending June 30, 2020.
• One cash receipt (totaling $5,685) that
was recorded as operating revenue for the
fiscal year ended June 30, 2019, should have
been fully accrued as of June 30, 2018.
• Three general expenses charged on P-cards
(totaling $11,836) that were recorded as
expenses for the fiscal year ended June 30,
2019, should have been fully accrued as of
June 30, 2018.  (Finding 1, Pages 5-6)  This
finding has been repeated since 2009.

We recommended the University continue to
review its process to assess the existence
of current period revenues and expenses and
consider changes necessary to ensure they
are accurately identified and recorded for
presentation in the University’s financial
statements.

University officials agreed with the
finding.

OTHER FINDING

The remaining finding pertains to inadequate
controls over university procurement card
transactions and is reportedly being given
attention by the University.  We will review
the University’s progress towards
implementation of our recommendations in our
next engagement.

AUDITOR’S OPINION

Our auditors stated the financial statements
of the University, the Auxiliary Facilities
System and the Health Services Facilities
System as of June 30, 2019, and for the year
then ended, 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