REPORT DIGEST NORTHEASTERN ILLINOIS UNIVERSITY FINANCIAL AND COMPLIANCE AUDIT Summary of Findings:
WILLIAM G. HOLLAND Iles Park Plaza |
{Financial Information
is summarized on the reverse page.} |
NORTHEASTERN ILLINOIS
UNIVERSITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 1997
FINANCIAL OPERATIONS (CURRENT FUNDS) | FY 1997 |
FY 1996 |
|
|
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SELECTED ACCOUNT BALANCES (ALL FUNDS) | JUNE 30, 1997 |
JUNE 30, 1996 |
Cash and
short-term investments Equipment Buildings and Land Accrued compensated absences Fund balances (deficit): Unrestricted Restricted Loan Net investment in plant Unrestricted Restricted Income Fund |
$10,126,519 |
$5,702,193 |
SUPPLEMENTARY INFORMATION | FY 1997 |
FY 1996 |
|
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 |
|
5,438 |
UNIVERSITY PRESIDENT | |
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$850,000 spent on computer system that does Accounts receivable procedures not followed Year 2000 Planning Deficiencies for Computer Systems |
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE PLANNING IN SELECTION AND IMPLEMENTATION OF NEW COMPUTER SYSTEM The University did not adequately plan the selection and implementation of its new academic and administrative computer system. Although the project was originally targeted to be completed by November 1996, it was still incomplete at the conclusion of our current audit. The University purchased a software package that did not meet its needs and required extensive modifications. Also, the University paid for the software before it was delivered, and the software package was not adequately tested before implementation. The University paid the vendor over $850,000 for the new academic and administrative computer system. When the new system did not perform as expected, the University was left without a working financial package. As a result, the University was unable to prepare auditable financial statements in a timely manner. The University has abandoned these new financial and purchasing software modules, and it was receiving these services from another vendor at an estimated monthly cost of over $10,000. (Finding 2, pages 14-15) We recommended the University review the contractual requirements for the new computer system and take appropriate action to address noncompliance with the original terms of the agreement. The University should also develop a planning framework to ensure required components of computer system development projects are adequately addressed. The University agreed with this finding and stated that they are in contract negotiations with the vendor regarding the academic and administrative system. DEVIATION FROM ESTABLISHED ACCOUNTS RECEIVABLE PROCEDURES The University did not follow its established accounts receivable procedures by not placing holds on past due student accounts we tested totaling $14,000 and by not sending prompt notices of offset claims totaling $5,600 to students. Consequently, these students were allowed to register for classes without taking care of their past due accounts. (Finding 4, page 18) We recommended the University enforce current collection procedures to allow for timely holds on student accounts and issuance of notices of offset claims. The University agreed with our recommendation and stated that it is reinforcing its procedures and assigning additional personnel to the accounts receivable collections process. YEAR 2000 PLANNING AND IMPLEMENTATION DEFICIENCIES The University's current efforts to define and correct impending computer problems due to the impact of the year 2000 are not fully adequate. The year 2000 can cause problems with computer-based systems due to the manner that computers process calendar dates. This problem can cause significant business problems if not identified and corrected. Since the University uses computer systems to process information to meet its mandates and objectives, addressing the technical issues surrounding the upcoming millennium is important. The University's efforts to implement a year 2000 compliant system failed and formal year 2000 plans have not been developed and communicated at this point in time. In addition, technical areas such as local and wide area networks, telecommunication, physical security system, and facility and maintenance systems have not been formally addressed. The corrective work requires considerable programming effort to examine numerous lines of source code in order to locate and fix the date fields, and correct them. If the University does not give high priority to this issue, systems relied upon to meet mandates and objectives could have serious problems. The University needs to have a plan in place where the scope of the impact has been inventoried, and corrective process defined and scheduled or implemented. (Finding 3, page 16) The University has accepted our recommendation to assess this problem, develop a plan, and devote the necessary resources to implement corrective action. OTHER FINDINGS The remaining findings and recommendations have been given appropriate attention by the University. We will review progress toward implementation of our recommendations in our next audit. Responses to the findings were provided by Cleve McDaniel, Vice President of Administrative Affairs. AUDITORS' OPINION Our auditors state the June 30, 1997 financial statements of Northeastern Illinois University are fairly presented. _____________________________________ WGH:ROQ:ak SPECIAL ASSISTANT AUDITORS Deloitte & Touche LLP were our special assistant auditors for this audit. |