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REPORT DIGEST ILLINOIS STUDENT ASSISTANCE COMMISSION– ILLINOIS DESIGNATED ACCOUNT PURCHASE PROGRAM FINANCIAL
AUDIT For the Year Ended: June 30, 2007 Release Date: March 6, 2008
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 www.auditor.illinois.gov |
INTRODUCTION
This digest covers our financial audit of the Illinois Student Assistance Commission – Illinois Designated Account Purchase Program for the year ended June 30, 2007. SYNOPSIS ¨ The Illinois Student Assistance Commission does not have sufficient controls over the financial reporting process for the Illinois Designated Account Purchase Program.
{Expenditures and Activity Measures are summarized on the reverse page.} |
ILLINOIS STUDENT ASSISTANCE COMMISSION
ILLINOIS DESIGNATED ACCOUNT PURCHASE PROGRAM
FINANCIAL AUDIT
For the Year Ended June 30, 2007 (in thousands)
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FINANCIAL
OPERATIONS |
2007 |
2006 |
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OPERATING REVENUES Interest - student loans..................................................... Interest - investments....................................................... Total......................................................................... |
$180,392 11,822 $192,214 |
$144,004 19,019 $163,023 |
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OPERATING EXPENSES Interest and other student loan expenses.......................... External loan servicing..................................................... Salaries and employee benefits........................................ Management and professional services............................ Marketing....................................................................... Other operating expenses................................................ Total........................................................................ |
$253,471 25,412 10,824 9,140 1,891 3,079 $303,817 |
$213,806 25,202 10,629 12,589 2,421 3,060 $267,707 |
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OPERATING (LOSS)........................................................ |
$(111,603) |
$(104,684) |
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NONOPERATING REVENUES Federal special allowance and student interest subsidy...... SPECIAL ITEMS AND TRANSFERS Special item..................................................................... Transfers in..................................................................... Transfers out.......................................................................................... Change in net assets.................................................. |
97,759 (17) 0 (56,298) $ (70,159) |
97,198
0 (566) $ (8,052) |
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SELECTED BALANCE SHEET ACCOUNTS |
2007 |
2006 |
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Unrestricted current assets: Cash and investments...................................................... Restricted current assets: Cash and cash equivalents............................................... Investments (including interest accrual)................................. Notes receivable............................................................. Student loans and interest receivable................................ Federal special allowance and interest subsidy.................. Restricted noncurrent assets: Notes receivable............................................................. Student loans receivable, net............................................ Current liabilities: Current portion of revenue bonds payable and Revolving line of credit................................................................ Accounts payable and accrued expenses.......................... Due to other funds........................................................... Noncurrent liabilities: Revenue bonds payable................................................... Net
Assets.......................................................................... |
$82,256 $74,230 $38,693 $45,655 $698,037 $20,432 $37,354 $2,798,110 $235,651 $25,224 $27,020 $3,439,094 $ 69,425 |
$43,948 $329,453 $20,848 $45,097 $730,494 $30,990 $36,897 $3,128,269 $43,500 $22,055 207 $4,162,509 $139,584 |
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AGENCY DIRECTOR |
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During audit Period: Mr. Andrew Davis (1/1/07-Current); Mr. Larry E. Matejka (7/1/06-12/31/06) Currently: Mr. Andrew Davis |
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Insufficient controls over financial
reporting process
Numerous errors were identified
Restricted net assets were understated by
$1.1 million Investment disclosures not included in
the footnotes $3.1 million liability under-recorded IDAPP went through a major
re-organization
Commission officials agree with auditors
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FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO IMPROVE CONTROLS OVER FINANCIAL
REPORTING The Illinois Student Assistance
Commission (Commission) does not have sufficient controls over the financial
reporting process. Numerous errors/adjustments were
identified during the audit of the Illinois Designated Account Purchase
Program (IDAPP) and review of underlying records. Some of the more
significant adjustments/errors were as follows:
ü
Restricted net assets were understated by
approximately $1.1 million, and unrestricted net assets were overstated by
the same amount. ü
Supplementary schedules of outstanding debt
did not agree to the financial statements or footnotes. ü
Investment disclosures required by GASB
Statement 40 pertaining to $77 million in money market accounts were not
included in the footnotes.
Per discussion with Commission
management, IDAPP went through a major re-organization of personnel,
including senior level management and also underwent a major restructuring of
its student loan portfolio. This contributed to delays and inaccuracies in
the preparation and reporting of financial statements. (Finding 3, pages 43-44) We recommended that the Commission
improve controls over financial reporting to ensure accurate presentation and
disclosure in its financial statements.
Commission officials agreed with our recommendation and stated that it would ensure that processes and procedures are put in place to improve internal controls and prevent delays and inaccuracies in the financial reporting process. OTHER
FINDING The other finding concerned the Commissions internal audit program. We will review progress toward implementation of all recommendations during the next audit. AUDITORS’ OPINION Our auditors stated the financial statements of the Program are fairly presented in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were McGladrey & Pullen, LLP. |