REPORT DIGEST

CHICAGO STATE UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the Single Audit Act of 1984, and OMB Circular A-133)
For the Year Ended:
June 30, 1996

Summary of Findings:

Release Date:
May 15, 1997

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• The University failed to resolve $17,903 in discrepancies between bank deposits and cashiers' receipts.

• The University had errors in cash balances ranging from $8,123 to $90,890 because they failed to perform bank reconciliations in a timely manner.

• The University did not have supporting documentation for commodity expenditures totaling $620,224.

{Financial Information is summarized on the reverse page.}

FY 1996

FY 1995

$ 28,458,926
5,811,882
16,392,677
16,009,082
3,562,986
166,059
$ 70,401,612

$ 28,246,270
1,744,397
3,364,683
4,122,188
5,138,147
8,852,193
6,491,143
9,483,981
3,235,110
415,565
$ 71,093,677

$ 28,383,697
--
16,344,090
15,049,055
1,248,107
497,555
$ 61,522,504

$ 24,364,556
1,495,487
2,927,404
3,671,984
4,541,783
8,316,143
5,557,304
8,772,662
1,427,986
1,276,511
$ 62,351,820

JUNE 30, 1996

JUNE 30, 1995

$ 4,834,049
23,740,000
100,412,308
8,655,600

(6,492,766)
3,261,827
$ 75,651,565

$ 10,394,611
23,840,000
93,763,987
8,271,271

(5,778,111)
8,911,468
$ 68,638,703

FY 1996

FY 1995

906
628
1,534

6,437
2,359
$6,375

878
452
1,330

6,799
2,786
$5,814

Errors and irregularities in bank deposits

Untimely bank reconciliations and lack of evidence

The University was not able to provide documentation for commodity expenditures totaling $620,224

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

UNRESOLVED DISCREPANCIES BETWEEN UNIVERSITY RECEIPTS AND BANK DEPOSITS

The University failed to resolve various discrepancies in deposit amounts between cashiers' receipts and deposits totaling $17,903 per the bank in a timely manner, and bank deposits totaling $90,890 were not recorded on the general ledger.

On two separate occasions, bank deposits were made for $9,780 and $8,123 less than the amount indicated on the cashiers deposit ticket. Also, several errors occurred between deposits per bank and deposits listed on cashiers' deposit tickets which resulted in bank deposits totaling $90,890 not being recorded on the University's general ledger. (Finding 1, page 7)

We recommended the University investigate all discrepancies in a timely manner to prevent errors and irregularities in deposits of receipts.

University officials agreed with the recommendation and stated that operational changes have been made to insure timely reconciliations.

FAILURE TO PERFORM BANK RECONCILIATIONS TIMELY

The University failed to perform bank reconciliations in a timely manner and to provide evidence of the dates bank reconciliations were completed and reviewed.

Errors in cash balances ranging from $8,123 to $90,890 were not detected on a timely basis. Dates of reconciliations performed and evidence of a supervisor's review could not be verified by the auditors. (Finding 3, page 9) This finding has been repeated since 1994.

We recommended the University perform bank reconciliations on a timely basis and have them reviewed by a supervisor. Any discrepancies should be investigated at the time of the reconciliation.

University officials agreed with our recommendation and stated that they have hired external contractual staff to perform bank reconciliations. (For previous agency responses, see Digest Footnote 1.)

LACK OF DOCUMENTATION FOR EXPENDITURES

Documentation supporting expenditure transactions for commodities totaling $620,224 could not be located in the files. (Finding 7, page 13)

We recommended the University take necessary steps to ensure that complete and accurate documentation is maintained for all transactions. University officials agreed with our recommendation.

OTHER FINDINGS

The remaining findings are less significant and 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 John Meehan, Chief Internal Auditor.

AUDITORS' OPINION

Our auditors state the June 30, 1996 financial statements of Chicago State University and the University Auxiliary Facilities System Revenue Bond Fund are fairly presented.

___________________________________
WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Pandolfi, Topolski, Weiss & Co., Ltd. were our special assistant auditors for this audit.

DIGEST FOOTNOTES

#1 FAILURE TO PERFORM BANK RECONCILIATIONS TIMELY - Previous Agency Responses

1995: "We agree. Several staff accountant personnel changes resulted in the aforementioned bank reconciliation problems. Corrective action has occurred and this will not be a repeat finding."

1994: "We agree. A monthly reconciliation of all bank and cashier funds will be prepared on a monthly basis. Also, the supervisory review process will be completed and documented on a timely basis."