REPORT DIGEST
EASTERN ILLINOIS UNIVERSITY
Financial Audit, Single Audit, and Compliance Examination
For the Year Ended: June 30, 2011
Release Date: March 8, 2012
Summary of Findings:
Total this audit: 8
Total last audit: 5
Repeated from last audit: 4
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 Full Report are also available on the worldwide web at www.auditor.illinois.gov
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SYNOPSIS
• The University did not properly calculate current
depreciation and improperly classified completed projects in the financial
statements.
• The University did not ensure information submitted by
students applying for financial aid was properly verified to ensure accurate
information is reflected on the Institutional Student Information Report (ISIR).
• The University did not deposit receipts and refunds
timely.
• The University did not have adequate internal controls to ensure new employees timely completed ethics training.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
NEED TO IMPROVE CAPITAL ASSET ACCOUNTING AND DEPRECIATION
CALCULATIONS
Eastern Illinois University (University) did not properly
calculate current depreciation and improperly classified completed projects in
the financial statements.
We noted the following:
• The University classified 56 asset items as building
improvements, which were depreciated using the 50-year estimated useful life of
a building instead of the 20-year estimated useful life for building
improvements. As a result, current year depreciation expense was understated by
$484,489. The auditors proposed an adjusting entry to the University to correct
this error, which the University recorded.
• The University accounted for a substantially completed
residence hall window retrofitting project, totaling $923,737, as construction
in progress instead of a building improvement. The auditors proposed an
adjusting entry to reclassify the project, which University recorded.
According to University personnel, the use of 50-year life
for building improvements was due to difference in judgment and the
misclassification of substantially completed project was due to oversight. (Finding 2, pages 20-21)
We recommended the University enhance internal controls over
reporting and depreciating capital assets to ensure proper accounting for asset
classifications and depreciation.
University officials agreed with the finding, indicating
they will implement controls to improve the reporting and depreciation
accounting for capital assets.
NONCOMPLIANCE WITH VERIFICATION REQUIREMENTS
The University did not ensure information submitted by
students applying for financial aid was properly verified to ensure accurate
information is reflected on the Institutional Student Information Report (ISIR).
During verification testing, we noted information in the ISIR for two of 68 (3%) students tested did not match with
the verification documentation provided by the students. As a result, one noted
student’s Expected Family Contribution (EFC) should
have been reduced and the student’s Pell award should have been increased by
$300. This was corrected by the University by increasing the student’s Pell
award in the subsequent academic year. The error for the other student did not
ultimately affect the award amount.
According to University personnel, discrepancies in the
information were due to human error.
(Finding 3, pages 22-23)
We recommended the University enhance controls over student
aid verification to ensure supporting documentation submitted by students
agrees with information on the Institutional Student Information Report to
minimize the risk of inaccurate awards of student financial aid.
University officials agreed with the finding, indicating
they will establish procedures to double-check that the corrected information
gets entered into the ISIR.
LATE DEPOSIT OF RECEIPTS AND REFUNDS
The University did not deposit receipts and refunds timely.
During testing of receipts and refunds, we noted 26 of 80
(33%) receipts and refunds, totaling $217,424, were deposited between two to 13
days after the checks were received by University personnel. We noted untimely
deposits from several departments across campus, including the business office,
Doudna Fine Arts Center, Panther catering, Panther
camps, student catering, clinic services, parking facilities, and athletics.
According to University personnel, late deposits were due to
procedural errors and other responsibilities taking priority at different
University departments. (Finding 5, page
25)
We recommended the University investigate the reasons
departments are not complying with receipt deposit rules and determine
appropriate enforcement actions to ensure compliance with the University’s
policy.
University officials stated they want deposits to be made
timely and will work with the University’s fiscal agents to improve compliance
with the University’s policy.
NEED TO COMPLY WITH ETHICS TRAINING REQUIREMENTS
The University did not have adequate internal controls to
ensure new employees timely completed ethics training.
During testing, we noted 16 of 25 (64%) new hires tested
completed ethics training from one to 56 days late. The State Officials and Employees Ethics Act
requires new employees entering a position requiring annual ethics training
complete an initial ethics training course within 30 days after commencing
employment.
According to University personnel, the delay in completing
ethics training was due to oversight and other job priorities taking
precedence. (Finding 8, page 29)
We recommended the University’s Ethics Officer monitor new employees to ensure ethics training mandated by
State law is completed in a timely manner.
University officials agreed with the finding, noting they
are implementing a system to track all new employees to ensure they timely
complete required training.
OTHER FINDINGS
The remaining findings are reportedly being given attention
by the University. We will review the
University’s progress towards the implementation of our recommendations in our
next audit.
AUDITORS’ OPINION
Our auditors stated the financial statements of Eastern
Illinois University as of and for the year ended June 30, 2011 are fairly
stated in all material respects.
WILLIAM G. HOLLAND
Auditor General
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SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this engagement were E.C. Ortiz & Co. LLP.