REPORT DIGEST ILLINOIS STUDENT ASSISTANCE COMMISSION Compliance Examination For the Two Years Ended June 30, 2014 Release Date: April 2, 2015 FINDINGS THIS AUDIT: 6 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 2 -- 3 -- 5 Category 3: 0 -- 1 -- 1 TOTAL: 2 -- 4 -- 6 FINDINGS LAST AUDIT: 14 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 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 INTRODUCTION This digest covers our compliance examination of the Illinois Student Assistance Commission (Commission) for the two years ended June 30, 2014. A financial audit covering the year ending June 30, 2014 was previously released on February 11, 2015. In total, this report contains 6 findings, one of which was also reported in the Financial Audit. SYNOPSIS • (14-4) The Commission did not perform the required compliance reviews over schools receiving Monetary Award Program funds. GOLDEN APPLE SCHOLARS OF ILLINOIS PROGRAM Pursuant to the Higher Education Student Assistance Act, the Commission administers the Golden Apple Scholars of Illinois Program which is managed by the Golden Apple Foundation for Excellence in Teaching. During procedures performed, the auditors identified instances of noncompliance related to the Golden Apple Scholars of Illinois Program which is described in the separate agreed-upon procedures report. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS LACK OF COMPLIANCE REVIEWS OVER MONETARY AWARD PROGRAM FUNDS The Commission did not perform the required compliance reviews over schools receiving Monetary Award Program (MAP) funds. During the examination, it was noted that as of June 30, 2014, only 29 of 141 (21%) schools had their required compliance reviews performed in the preceding three year period. ISAC would have needed to review, on average, 47 schools each year to cover all 141 schools over a three year period. During Fiscal Year 2014, 2013 and 2012 the Commission awarded $373, $371, and $387 million in MAP funds, respectively. In addition, the results of the 29 required compliance reviews indicated that several students had become ineligible after the initial award. The Commission recovered $70,351, $72,513, and $275,124, respectively, in MAP funds from the schools with these students. (Finding 4, pages 15-16) We recommended the Commission follow the plan to perform timely compliance reviews, so that all schools are reviewed at least every three years as required by the Illinois Administrative Code. Commission officials agreed with the recommendation and are taking steps to review the process and perform the required school reviews on a timely basis going forward. OTHER FINDINGS The remaining findings are reportedly being given attention by the Commission. We will review the Commission’s progress towards the implementation of our recommendations in our next engagement. AUDITOR’S OPINION A financial audit covering the year ending June 30, 2014 was issued separately. Our auditors stated the financial statements of the Commission are fairly presented in all material respects. Auditors included a paragraph emphasizing that the Illinois Prepaid Tuition Program has a deficit of $276 million as of June 30, 2014. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Commission for the two years ended June 30, 2014, as required by the Illinois State Auditing Act. The auditors stated the Commission complied, in all material respects, with the requirements described in the report. WILLIAM G. HOLLAND Auditor General WGH:JGR SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for this examination were McGladrey LLP.