REPORT DIGEST

NORTHEASTERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

(In accordance with the Single Audit Act and OMB Circular A-133)

For the Year Ended:
June 30, 2001

Summary of Findings:

Total this audit 3
Total last audit 3
Repeated from last audit 1

Release Date:
March 26, 2002

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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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at http://www.state.il.us/auditor

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

 

 

  • The University lacked controls over the monitoring of unemployment compensation resulting in questionable benefits paid to employees.
  • The University failed to fully monitor the subgrantees for the Federal Gear-Up program.

 

 

 

 

 

 

{Financial Information is summarized on the reverse page.}

NORTHEASTERN ILLINOIS UNIVERSITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 2001

FINANCIAL OPERATIONS (CURRENT FUNDS)

FY 2001

FY 2000

REVENUES
State Appropriations
General Revenue Fund
Education Assistance Fund
Capital Development Fund
Payments on behalf of University
Student tuition and other fees
Grants (principally federal awards)
Student Union sales and services
Parking revenue
Illinois Future Fund
Other sources

Total

EXPENDITURES AND MANDATORY TRANSFERS
Instruction
Research
Public Service
Academic Support
Student services and Programs
Institutional support
Operation of plant
Scholarships and Fellowships
Auxiliary enterprises
Mandatory transfers

Total


$36,636,100
5,973,944
920,941
11,269,364
23,911,604
20,638,946
142,920
870,577
0
4,013,977


$104,378,373

$31,454,819
246,981
11,370,932
7,083,955
6,009,667
20,434,014
10,872,017
8,787,979
2,103,903
375,705

$98,739,972


$34,530,391
5,799,999
2,079,316
9,806,842
22,900,574
14,500,346
144,658
822,523
19,982
4,007,272


$94,611,903

$29,275,289
199,401
7,283,411
6,654,168
5,848,781
18,212,841
10,535,847
8,015,391
2,166,619
1,322,812

$89,514,560

SELECTED ACCOUNT BALANCES (ALL FUNDS)

JUNE 30, 2001

JUNE 30, 2000

Cash and short-term investments
Equipment
Buildings and Land
Accrued compensated absences
Fund balances (deficit):
Unrestricted
Restricted
$21,052,850
43,355,323
91,842,851
11,865,943
$134,343,479
5,421,234
$17,666,966
43,071,021
88,320,741
13,061,443
$124,480,788
5,455,148
SUPPLEMENTARY INFORMATION

FY 2001

FY 2000

Employment Statistics
Administration
Faculty
Civil Service
Students

Total Employees

Selected Activity Measures
Annual full-time equivalent students - Undergraduate
Annual full-time equivalent students - Graduate
Full-time equivalent cost per student - Undergraduate
Full-time equivalent cost per student - Graduate


222
371
473
401

1,467


6,251
1,435
$6,880
$9,779


213
361
451
411

1,436


6,137
1,464
$6,376
$9,349

UNIVERSITY PRESIDENT
During Audit Period: Dr. Salme H. Steinberg
Currently: Dr. Salme H. Steinberg
 

 

 

 

 

 

Questionable unemployment benefit claims and payments paid to State employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subgrantee audit reports not received by the University as required

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LACK OF CONTROLS IN MONITORING UNEMPLOYMENT COMPENSATION

The University failed to develop adequate controls over the review of unemployment benefit claims and payments. This resulted in questionable benefits being paid by the State to employees who were still receiving a paycheck from the University.

In our follow-up testing from the prior year audit, we sampled 15 University employees who received $39,363 in unemployment benefits. In 20 percent (3 of 15) of the cases sampled, we questioned the appropriateness of $1,586 paid out in unemployment benefits. Two questionable cases were for employees receiving a paycheck and unemployment check simultaneously. In one case, a student received unemployment but the University was unable to find any unemployment claim information. (Finding 2, pages 18-19) This finding has been repeated since 1999.

We recommended the University further develop its policies and procedures for the review of unemployment benefit activity by instituting a control whereby the individual that processes unemployment activity could verify and protest cases where benefit recipients were simultaneously working and receiving unemployment. Further, the University should maintain all necessary documentation regarding unemployment claims.

University officials responded they have further developed their policies and procedures for review of unemployment benefit activity by instituting an additional control. (For previous University responses, see Digest footnote 1.)

FAILURE TO FULLY MONITOR SUBGRANTEES

The University has a five year $31.3 million dollar Federal grant for the Gear-Up program to provide or guarantee low-income students financial assistance to attend an institution of higher education. For fiscal year 2001, total expenditures for this program were $5,912,638.

During fiscal year 2000, the University passed through $732,829 of funds received to six subgrantees. The subgrantees were paid on a reimbursement basis from quarterly progress and expenditure reports received from them and reviewed by the University. The grant agreement required the subgrantee to provide the University with a current certified audit report no later than six months after the subgrantee’s fiscal year (by December 31, 2000).

Prior to our inquiries, the University had received no reports for the fiscal year 2000 subgrants and had done no follow-up. After our inquiry, the University requested and received 3 of 6 (50%) of the required audit reports before the end of our fieldwork. Federal regulations require pass through entities to properly monitor subgrantees to ensure that subrecipients have complied with audit requirements. (Finding 1, pages 16-17)

We recommended the University develop procedures to properly monitor and administer subgrants.

University officials agreed with our recommendation and stated they will implement the procedures necessary for compliance, as well as actions to take for noncompliance.

OTHER FINDINGS

The remaining finding and recommendation is less significant and is reportedly being given attention by University management. We will review progress toward implementation of our recommendations in our next audit.

University responses were provided by Mark Wilcockson, Vice President for Finance and Administration.

 

AUDITORS' OPINION

Our auditors stated the University’s financial statements at June 30, 2001 and for the year then ended are fairly presented in all material respects.

 

___________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:ROQ:ak

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were Nykiel, Carlin & Co.

DIGEST FOOTNOTES

#1 LACK OF CONTROLS IN MONITORING UNEMPLOYMENT COMPENSATION

2000: "The University concurs with the recommendation and will further develop and improve its policies and procedures for the review of unemployment benefit activity. In particular, as recommended by the Office of the Auditor General, the University will assign the responsibility of monitoring and protesting, if applicable, unemployment claims to a specific unit within the Personnel Department and secure the necessary training to fulfill their responsibilities."

1999: "The University is in the process of developing formal policies and procedures for the review of unemployment benefit activity that includes protesting all cases of potential ineligibility so that State resources are adequately protected. In addition, the University is consulting with legal counsel to ensure that citizens’ rights are not jeopardized, thereby, placing the University at risk."