REPORT DIGEST

REPORT DIGEST

THE ALUMNI ASSOCIATION OF SOUTHERN ILLINOIS UNIVERSITY AT EDWARDSVILLE

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2005

AND

FINANCIAL AUDIT

For the Year Ended:

June 30, 2005

Summary of Findings:

Total this audit 2

Total last audit 3

Repeated from last audit 2

Release Date:

March 23, 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 and the Full Report are also available on

the worldwide web at

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

SYNOPSIS

· The Alumni Association is operating without a written contract with the University as required by the Legislative Audit Commission University Guidelines.

· The Alumni Association does not have an investment policy.

SOUTHERN ILLINOIS UNIVERSITY ALUMNI ASSOCIATION AT EDWARDSVILLE

FINANCIAL AND COMPLIANCE AUDIT

For The Two Years Ended June 30, 2005

FINANCIAL OPERATIONS (All Funds)	FY 2005	FY 2004
REVENUES
Operating revenues..............................................	$261,993	$287,873

EXPENSES
Operating expenses..............................................	$249,876	$284,530

Operating income...........................................	$12,117	$3,343

NONOPERATING REVENUES (EXPENSES)
Contributions.......................................................	$100	$35
Investment Income...............................................	$8,756	$6,593
Net change in fair value of investments..................	$6,687	$18,931
Net non-operating revenues............................	$15,543	$25,559

Increase in net assets......................................	$27,660	$28,902

NET ASSETS
Net Assets – beginning of year.............................	$214,076	$185,174

Net Assets – end of year......................................	$241,736	$214,076

OTHER SIGNIFICANT ACCOUNT BALANCES	AT JUNE 30, 2005	AT JUNE 30, 2004
Cash and Investments.................................................. Total Assets............................................................. Deferred Revenue....................................................... Total Liabilities........................................................ Net Assets – Invested in capital assets......................... Net Assets – Unrestricted........................................... Total Net Assets......................................................	$299,070 $316,999 $60,230 $75,263 $906 $240,830 $241,736	$261,850 $266,024 $37,660 $51,948 $1,992 $212,084 $214,076
EXECUTIVE DIRECTOR
During the audit: Mr. Remy Billups (through July 12, 2005) Currently: Vacant

LAC University Guidelines not being followed

No investment policy in place

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LACKING CONTRACT WITH UNIVERSITY

The Alumni Association does not have a written contract with Southern Illinois University that describes its relationship, services to be performed, and the associated costs with those services.

The Legislative Audit Commission University Guidelines 1982, as amended in 1997, require written contracts between the University and each of its university related organizations.

Alumni personnel believe that the Association is covered by the contract between the University and the Edwardsville Foundation, however we determined that the Alumni Association was not a party to this contract.

The University provided the Alumni Association with salaries and benefits totaling $172,598 and $173,546, in 2005 and 2004 respectively. (Finding 1, page 12)

We recommended and the Association agreed to reduce its relationship with the University to writing. Furthermore, the Association indicated that a contract with the University was finalized and subsequently signed, with an effective date of November 21, 2005.

LACKING POLICY REGARDING INVESTMENTS

The Alumni Association does not have an investment policy indicating the procedures, goals, and limits to be used during the investment decision-making process. Prudent business practices require such a policy.

Association personnel indicated that a policy has been drafted; however it has not yet been approved and implemented.

Investments in Fiscal Year 2005 totaled $233,646. (Finding 2, page 13)

We recommended and the Association agreed that an investment policy is necessary. The Association intends to develop an investment policy as it also addresses its strategic direction to best fit the needs of the University.

AUDITORS' OPINION

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

___________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KAL:pp

SPECIAL ASSISTANT AUDITORS

Kerber, Eck & Braeckel LLP were our special assistant auditors for this engagement.