REPORT DIGEST WESTERN ILLINOIS UNIVERSITY Financial Audit For the Year Ended June 30, 2015 Release Date: January 14, 2016 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 0 -- 1 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 0 -- 1 -- 1 FINDINGS LAST AUDIT: 2 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 This digest covers the Western Illinois University Financial Audit as of and for the year ended June 30, 2015. Western Illinois University’s Compliance Examination and Federal Single Audit covering the year ended June 30, 2015 will be issued in a separate report at a later date. SYNOPSIS (15-1) The University had inadequate controls over its journal entries to ensure that journal entry transactions were appropriate, properly prepared, and timely approved. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER JOURNAL ENTRIES The University had not established adequate controls over its journal entries. We noted the following: • Recurring journal entries were not reviewed and approved, and specific mitigating controls were not documented to support this policy. • No monitoring procedures existed to periodically evaluate the recurring journal entry process and effectiveness of controls. Recurring journal entries totaled over $413.9 million in FY 2015. • 1,283 batches of journal entries totaling over $9.6 million were not reviewed because they fell under the University’s $100,000 review threshold. • Journal entries could be both prepared and posted by the same individual. (Finding 1, pages 53-55) This finding was first reported in 2013. We recommended the University develop effective policies and procedures that will strengthen controls and establish monitoring procedures to ensure proper operation of the journal entry review and approval process. University officials agreed with the finding and stated policy now requires approval of all non-recurring entries and they will document, assess, and monitor internal controls for recurring entries. Management also stated they are reviewing options for a more automated system, which would preclude posting of entries in the absence of an approval. (For the previous University response, see Digest Footnote #1.) AUDITOR’S OPINION Our auditors stated the financial statements of Western Illinois University as of June 30, 2015 and for the year then ended, are fairly stated in all material respects. FRANK J. MAUTINO Auditor General FJM:lkw SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for this audit were E.C. Ortiz & Co., LLP. DIGEST FOOTNOTES #1 - Inadequate Controls Over Journal Entries - Previous University Response The University agrees with the finding. The University will review its existing policy and procedures for processing, reviewing and approving journal entries. The University will also consider revisions to the policy that will strengthen controls.