REPORT DIGEST ILLINOIS CONSERVATION FOUNDATION FINANCIAL AUDIT AND COMPLIANCE EXAMINATION (In Accordance with the Single Audit Act and OMB Circular A-133) For the Year Ended: June 30, 2009 Summary of Findings: Total this report 5 Total prior report 2 Repeated findings 2 Release Date: January 20, 2010 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.auditor.illinois.gov

SYNOPSIS ¨ The Foundation did not take timely action to collateralize bank balances in excess of the FDIC insurance limit of $100,000. ¨ The Foundation did not present information on the internet concerning their investment of public funds as required by the Act. ¨ The Foundation does not have adequate segregation of duties. {Financial and supplementary information are summarized on the reverse page.}

ILLINOIS CONSERVATION FOUNDATION

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

FOR THE YEAR ENDED JUNE 30, 2009

OPERATING STATEMENT (Governmental Funds)	FY 2009	FY 2008
Revenues: Donations - Restricted........................................................... Grants and Receipts from Other Governments....................... Donations – Unrestricted....................................................... Merchandise Sales – Restricted............................................ Investment Income - Unrestricted......................................... Investment Income - Restricted............................................ Increase /(Decrease) In Fair Value Of Unrestricted Investments Increase /(Decrease) In Fair Value Of Restricted Investments... On-Behalf Payments.............................................................. Publication Sales - Restricted................................................. Miscellaneous Income.......................................................... Total Revenue.......................................................... Expenditures: Administrative ............................................................. Natural Resources and Recreation Programs...................... On-Behalf Payments.......................................................... Total Expenditures.................................................... Change In Net Assets............................................................ Net Assets, Beginning of Year.............................................. Net Assets, End of Year........................................................	$1,354,776 647,207 108.739 36,553 99,078 3,523 (554,995) (18,989) 86,417 385 145 $1,762,839 $229,563 2,583,448 76,417 $2,899,428 $(1,136,589) 3,875,107 $2,738,518	$844,243 663,943 45,174 60,760 165,491 5,669 (252,982) (16,732) 75,480 1,798 28 $1,592,872 $254,516 2,107,613 75,480 $2,437,609 $(844,737) 4,719,844 $3,875,107
STATEMENT OF NET ASSETS (Governmental Activities)	June 30, 2009	June 30, 2008
Assets: Cash And Cash Equivalents................... Accounts Receivable............................ Accrued Investment Income................ Inventory....................................................... Prepaid Expenses........................................ Investments............................................... Total Assets................................... Liabilities: Accounts Payable And Accrued Expenses.........                          Accrued Expenses.......................................... Deferred Revenue.......................................... Total Liabilities......................................... Net Assets: Natural Resources & Recreation - Restricted.... Endowment/Nonexpendable – Restricted.........    Unrestricted..................................... Total Net Assets...................................	$385,930 62,907 13,385 0 7,005 2,426,010 $2,895,237 $136,071 1,143 12,500 $149,714 $1,608,761 46,234 1,090,528 $2,745,523	$1,007,977 259,358 14,778 3,825 7,726 2,912,114 $4,205,778 $319,813 0 3,132 $322,945 $2,229,290 65,222 1,588,321 $3,882,833
SUPPLEMENTARY INFORMATION	FY 2009	FY 2008
% of Administrative Expenditures to Total Expenditures..............	7.92%	10.44%
% of Total Expenditures From Federal Sources...........................	22.32%	27.24%
FOUNDATION CHIEF EXECUTIVES
During Engagement Period: Executive Director Gregory Legan (through 6/11/09) Chairman: Marc Miller Currently: Executive Director: Vacant Chairman: Marc Miller

Bank balances exceeded FDIC insurance limit on 27 different days for as much as $56,555. Public funds totaling $2,426,010 not presented on internet One employee performs all accounting functions

INTRODUCTION Our report covers the compliance examination and the financial audit of the Illinois Conservation Foundation (Foundation) performed in accordance with the Single Audit Act and OMB Circular A-133 for the fiscal year ended June 30, 2009. The Foundation was authorized to be created by the Illinois Department of Conservation, currently the Illinois Department of Natural Resources (IDNR) by statute on August 20, 1994. The role of the Foundation is to provide additional funding for IDNR’s conservation programs that are not receiving adequate State funding or cannot be implemented because State funding is not available. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS BANK BALANCES IN EXCESS OF THE FDIC INSURANCE LIMIT WERE NOT PROTECTED BY COLLATERAL PLEDGED BY THE BANK During our testing of cash balances, we noted the Foundation did not take timely action during fiscal year 2009 to collateralize (protect) bank balances in excess of the FDIC insurance limit of $100,000. Our testing identified that at June 30, 2009, one account exceeded the FDIC insurance limit on 27 different days for as much as $56,555. We recommended the Foundation request the bank pledge securities as collateral in a sufficient amount so as to cover the amounts in excess of the FDIC insurance limit. (Finding 1, page 17) This finding was first reported in 2007. Foundation management stated they do not believe the frequency of occurrence and amounts represent a significant risk but stated they will continue to monitor the situation and if it continues to be a problem, agree to request the banks pledge securities as collateral in a sufficient amount so as to cover the amounts in excess of the FDIC insurance limits. NONCOMPLIANCE WITH ACCOUNTABILITY FOR THE INVESTMENT OF PUBLIC FUNDS ACT The Foundation did not present information on the internet concerning their investment of public funds as required by the Act. The Foundation had investment balances of $2,426,010 that would be classified as public funds by the Act at June 30, 2009. We recommended the Foundation comply with the requirements of the Act and ensure the information concerning the investment of public funds is updated monthly by the 15^th of each month. (Finding 2, pp. 18-19) The Foundation respectfully disagreed with our recommendation. The Foundation is already exempt from the Investment of Public Funds Act and will seek legislation to clarify exemption to the Accountability for the Investment of Public Funds Act. SEGREGATION OF DUTIES The Foundation has one employee, the Executive Director, and two contractual employees. Because of the small size of the Foundation staff all of the accounting functions are performed by one employee which creates a segregation of duties issue. We recommended the Board of Directors remain involved in the financial affairs of the Foundation to provide oversight and independent review functions. The Foundation respectfully disagreed with our recommendation and stated they believe compensating controls have been put in place to minimize risk. AUDITORS’ OPINION Our auditors state the June 30, 2009 financial statements of the Foundation are fairly presented in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JSC:pp SPECIAL ASSISTANT AUDITOR Kyle E. McGinnis, CPA was our special assistant auditor. DIGEST FOOTNOTES #1 – BANK BALANCES IN EXCESS OF THE FDIC INSURANCE LIMIT WERE NOT PROTECTED BY COLLATERAL PLEDGED BY THE BANK - Previous Agency Response 2008: The Foundation does not believe the frequency of occurrence and amounts represent a significant risk. The Foundation will continue to monitor the situation and if it continues to be a problem, agrees to request that the banks pledge securities as collateral in a sufficient amount so as to cover the amounts in excess of the FDIC insurance limits.