REPORT DIGEST

WESTERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2016

Release Date:  February 2, 2017

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  1 -- 0 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 0 -- 1

FINDINGS LAST AUDIT: 1

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, 2016. Western
Illinois University’s Compliance
Examination and Federal Single Audit
covering the year ended June 30, 2016 will
be issued in a separate report at a later
date.

SYNOPSIS

• (16-1) The University did not evaluate
changes in circumstances affecting capital
assets to determine whether impairment
occurred and did not properly account for
and report capital asset impairments in
the financial statements.

FINDING, CONCLUSION, AND RECOMMENDATION

IMPROPER ACCOUNTING FOR CAPITAL ASSET
IMPAIRMENTS

The University did not evaluate changes in
circumstances affecting capital assets to
determine whether impairment occurred and
did not properly account for and report
capital asset impairments in the financial
statements. We noted:

• Buildings planned for demolition were
still depreciated and maintained on the
books, rather than evaluated for
impairment and adjusted to reflect the
decline in value when management chose to
change the expected use.

• Deconstruction and demolition costs were
capitalized instead of expensed as
incurred.

• Notes to the financial statements did
not disclose idle capital assets or
impairment losses.
As a result, prior year net position
balances were overstated by $7,620,658 and
current year expenses were understated by
$752,057. The financial statements and
footnotes were corrected subsequent to
audit testing. (Finding 1, pages 53-55)

We recommended the University establish
procedures to ensure that transactions are
carefully reviewed for proper accounting
and disclosure and any necessary guidance
should be obtained to ensure conformity
with Generally Accepted Accounting
Principles (GAAP).

University officials agreed with the
finding and stated they will modify its
capital asset procedures to ensure proper
capitalization and as necessary, obtain
guidance to ensure conformity with GAAP.

AUDITOR’S OPINION

Our auditors stated the financial
statements of Western Illinois University
as of June 30, 2016 and for the year then
ended, are fairly stated in all material
respects.

FRANK J. MAUTINO
Auditor General

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SPECIAL ASSISTANT AUDITOR

Our Special Assistant Auditors for this
audit were Adelfia LLC.