REPORT DIGEST

ILLINOIS 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• The University's current accounting system is outdated and inefficient for preparing financial statements and various other financial reports. This finding has existed since 1994.

• University-wide computer policies, procedures and standards for administering and securing the University's Local Area Networks were not adequately implemented.

{Financial Information is summarized on the reverse page.}

FY 1996

FY 1995

$ 69,842,498
57,686,564
55,651,417
4,367,330
40,451,582
5,998,567
17,429,487
$251,427,445

$ 57,381,148
12,337,731
6,727,064
14,359,027
22,039,252
14,276,963
15,107,560
3,171,112
13,572,821
34,839,550
32,273,203
6,755,292
17,429,487
$250,270,210

$ 66,031,457
55,081,853
20,163,781
4,348,495
36,743,972
5,463,165
16,448,527
$204,281,250

$ 54,803,196
7,227,457
8,140,420
17,572,239
20,919,178
12,450,243
14,555,112
2,328,333
13,203,175
-
28,920,323
7,030,615
16,448,527
$203,598,818

JUNE 30, 1996

JUNE 30, 1995

$ 6,406,043
30,812,484
364,046,919
21,510,810
45,859,684

(11,851)
1,572,780
9,582,455
329,419,508

$ 5,383,607
28,276,300
338,068,936
19,574,209
47,257,215

(523,609)
1,286,465
9,411,079
300,933,361

FY 1996

FY 1995

1,222.1
791.2
254.0

551.6
375.7
454.3
3,648.9

16,408
$6,684

1,199.3
752.4
278.4

358.2
549.6
369.1
3,507.0

16,354
$6,577

Outdated accounting system in need of upgrade

New accounting system needs to be a high priority

Computer security standards not fully implemented

LAN security not enforced on a University-wide basis

Oversight body needed to review and monitor LAN procedures

FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS

ACCOUNTING SYSTEM IS OUTDATED AND NOT EFFICIENT

The current accounting system utilized by the University Comptroller's Office is outdated and is not efficient for preparing financial statements and various other financial reports. This system has not been upgraded for several years. The various areas within the Comptroller's Office have ten different nonintegrated accounting systems which have evolved over time. These various systems process information throughout each fiscal year, and each system independently generates financial information. Preparation of the University's agency-wide financial statements is difficult because numerous combinations, eliminations, and allocations of amounts from the ten nonintegrated systems must be made.

An efficient and effective accounting system should facilitate the preparation of agency-wide financial statements, simplify daily record keeping, and enable individuals in various areas of the Comptroller's Office to have access and use the information from other areas. (Finding 1, page 7) This finding has been repeated since 1994.

University officials agreed with our recommendation to make the upgrading of the accounting system a high priority. They stated an accounting software package has been purchased and several implementation teams are meeting on a regular basis. (For the previous agency responses, see Digest Footnote 1.)

INADEQUATE IMPLEMENTATION OF COMPUTER SECURITY STANDARDS

Policies and procedures to control and monitor microcomputers and Local Area Networks (LANs) were inadequate. The University did not maintain adequate procedures or a centralized authority to ensure sufficient control over LANs. The University had at least 150 LANs established at the Normal campus with approximately 5,500 workstations. The degree of formality, the extent, and the effectiveness of LAN administration procedures were found to vary by network. This variance depended on the LAN Coordinators and their commitment to communicating and enforcing adequate controls. Our review found that the University had established standards but did not consistently enforce these standards on individual LANs.

University-wide policies, procedures, and standards regarding LAN administration and an oversight body to monitor compliance with these standards need to be implemented to assure the University's intellectual efforts and investment in technology are properly safeguarded. (Finding 3, page 10)

We recommended the University implement standard security guidelines to ensure security controls are adequately addressed on all University LANs. We also recommended an administrative oversight body be appointed to perform a review of the individual detailed LAN procedures and monitor LAN administration for compliance with the University standards.

University officials agreed that the standard security guidelines should be implemented. They also agreed with the recommendation to appoint an administrative oversight body which would perform reviews and monitor individual LAN administration and security procedures.

OTHER FINDINGS

The remaining findings and recommendations were less significant and have been given appropriate attention by University management. We will review progress toward implementation of our recommendations during our next audit. University responses were provided by Mr. Ron Jones, Assistant Vice President and Comptroller.

AUDITORS' OPINION

Our auditors state the June 30, 1996 financial statements of Illinois State University are fairly presented.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:KMA:pp

SPECIAL ASSISTANT AUDITORS

Geo. S. Olive & Co. LLC were our special assistant auditors for this audit.

DIGEST FOOTNOTE

#1 OUTDATED ACCOUNTING SYSTEM - Previous Agency Responses

1994: "The University agrees to make the upgrading of the accounting system a high priority. A team has been formed and initial review and planning began in July 1994."

1995: "The University agrees with the recommendation to make upgrading of the accounting system a high priority and is currently in the process of examining vendor software packages."