REPORT DIGEST

 

PRAIRIELAND ENERGY, INC.

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2005

 

 

Summary of Findings:

Total this audit†††††††††††††            1

Total last audit†††††††††††           †† 1

Repeated from last audit†††††††††† 0

 

 

Release Date:

March 8, 2006 

 

 

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

®      The Company did not have adequate accounting records of sales and accounts receivable related to sales of energy to private individuals and companies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 


PRAIRIELAND ENERGY, INC.

FINANCIAL AUDIT

For the Year Ended June 30, 2005

 

FINANCIAL OPERATIONS

FY 2005

FY 2004

OPERATING REVENUES

††††† Steam Sales...............................................................

††††† Chilled Water Sales...................................................

††††† Hot Water Sales........................................................

††††† Electricity Sales.........................................................

††††††††††† Total...................................................................

 

OPERATING EXPENSES

††††† Energy Costs.............................................................

††††† Facilities Rental..........................................................

††††† Salaries†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††

††††† Office Rent................................................................

††††† Other........................................................................

††††††††††† Total...................................................................

 

NONOPERATING REVENUES (EXPENSES)

††††† Interest......................................................................

††††† Other........................................................................

††††† Income Tax (Expense) Credit....................................

††††††††††† Total...................................................................

 

INCREASE IN NET ASSETS.......................................

NET ASSETS - Beginning of Year..................................

NET ASSETS - End of Year...........................................

 

 

$6,556,847

1,566,845

2,871,692

86,427

$11,081,811

 

 

$7,430,498

2,903,970

44,772

14,400

27,328

$10,420,968

 

 

$3,728

1,920

(202,209)

$(196,561)

 

$464,282

$406,140

$870,422

 

$6,410,722

1,692,780

†† 2,872,330

0

$10,975,832

 

 

$7,886,251

2,903,880

42,463

1,200

16,375

$10,850,169

 

 

$1,873

45

(37,808)

$(35,890)

 

$89,773

$316,367

$406,140

 

SELECTED ACCOUNT BALANCES

AT JUNE 30,

2005

AT JUNE 30,

2004

Cash..............................................................................

Accounts Receivable......................................................

Deferred Income Taxes Payable.....................................

$156,493

$789,511

$315,872

$137,130

$391,113

$117,994

 

CORPORATION PRESIDENT

During Audit Period:Mr. Lyle Wachtel

Currently:Mr. Lyle Wachtel

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Inadequate accounting records

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Accrual basis of accounting recommended

 

INTRODUCTION

 

††††††† Prairieland Energy, Inc. is an Illinois corporation formed and wholly owned by the Board of Trustees of the University of Illinois.Prairieland was formed November 19, 1996 for the purpose of producing, acquiring and selling various forms of energy for the University and other customers.

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

INADEQUATE SALES AND ACCOUNTS RECEIVABLE RECORDS

 

††††††† The Company did not have adequate accounting records of sales and accounts receivable related to sales of energy to private individuals and companies.Prairieland Energy entered into agreements with several private individuals and companies to provide electricity, steam and chilled water starting in October 2004.The Company maintained its accounting records on a cash basis and did not have an accounts receivable subsidiary ledger that kept track of amounts owed to the Company for energy sales.Energy sales were recorded based on deposits reflected on the Company bank statements and not based on a detailed sales or cash receipts journal.In addition, certain invoices to customers were not generated on a timely basis.

 

††††††† In past fiscal years, the Company had a limited number of transactions which did not necessitate maintaining an accounts receivable subsidiary ledger and related journals.Company management stated they were in the process of negotiating with an outside accounting firm to provide accounting services for the Company.(Finding 1, page 20)

 

††††††† We recommended the Company maintain its accounting records on the accrual basis and establish an accounts receivable subsidiary ledger, sales journal, and cash receipts journal.In addition, invoices should be generated monthly for all customers.

 

††††††† The Company responded that it will evaluate the recommendation to move to an accrual method of accounting.

 

††††††† We will review progress towards implementation of our recommendation during our next compliance examination.

 

AUDITORSí OPINION

 

††††††† Our auditors stated the Corporationís June 30, 2005 financial statements are fairly presented in all material respects.

 

 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:KMA:pp

 

SPECIAL ASSISTANT AUDITORS

 

††††††† Our special assistant auditors were Clifton Gunderson LLP.