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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
QUARTERLY EXPENDITURE REPORTS NOT SUBMITTED TIMELY
The
University did not submit the required quarterly expenditure reports for its
grant program passed through the Illinois State Board of Education.
During
our testing of the Twenty-First Century Community Learning Centers program we
noted that the required quarterly expenditure reports were submitted late for
all four quarters. The delays ranged
from 23 days up to 165 days past the due date. We also noted that these grant
projects were initially frozen by the grantor due to non-submission of the
fourth quarter expenditure reports as of September 22, 2005. (Finding 2,
Pages 21-22)
We recommended the University comply with all the reporting
requirements of its grant agreements and ensure timely submission of
reports. We also recommended that a
calendar of reporting deadlines be compiled and be monitored by the grant
fiscal administration to ensure compliance.
University officials agreed with the finding and
recommendation and stated that they will strengthen their efforts to ensure
compliance.
INADEQUATE CONTROLS OVER UNIVERSITY
PROPERTY AND EQUIPMENT
The University did not have adequate controls
over its property and equipment.
During our physical identification of 90 items in
the property records we noted:
·
Twelve (12) equipment items, with a total value of
$86,430 were not tagged with the University decal.
·
Five (5) items with a total value of $10,059 were not
found.
Information in the property records for thirty
four (34) equipment items tested were not updated as follows:
·
Three (3) items with a total value of $47,752,
scrapped in December 2003, were not deleted from the property records.
·
Five (5) items with a total value of $13,545 were no
longer in use but not reported as surplus.
·
The tag number affixed for four (4) items with a
total value of $9,590 did not match the tag number in the Property Listing.
·
The user name for eleven (11) laptops, with a total
value of $30,487were not indicated or did not match the user name in the
Property Listing.
·
Eleven (11) items with a total value of $33,016 were
found in a different location than reflected on the property listing.
During our tracing to the Property Listing of
items physically identified, we noted five (5) of 35 (14%) equipment items
tested were not included in the Property Listing.
In our testing of vouchers representing purchases
of new furniture with a total value of $228,076, we noted that all 5 (100%)
vouchers tested were not supported with a state property surplus-new
furniture affidavit that is required to be filed with the state surplus
administrator.
We also noted that a voucher amounting to $2,904
representing 8 handheld radios were not included in the Property
Listing.
During our review of University controls over
off-campus use of equipment and our detailed testing of sixty (60) off-campus
equipment use forms on file and physical verification of the 25 laptops
personally assigned, we noted the following:
·
Fifty-four (54) off-campus equipment use forms
obtained from Property Control covering 80 equipment items were not properly
completed. The forms had missing
information.
·
Items covered by thirteen (13) of these off-campus
equipment use forms were past due of their return, the longest being more
than a year from the date of the move.
·
Two (2) of the 80 (2%) items listed in two off-campus
equipment use forms were not included in the Property Listing.
·
The tag number indicated in the off-campus equipment
use forms for 5 equipment items tested did not match the tag number in the
Property Listing.
·
Off-campus equipment use forms were not prepared for
3 laptops assigned to employees. (Finding 3, Pages 23-28)
We recommended the University: a) Adhere to its
procedures to ensure that the property and equipment records are accurately
maintained and updated; b) Improve its controls over off-campus use of
property and equipment by reviewing the forms submitted by employees for
completeness and accuracy; c) Conduct periodic physical inventories and
property records should be updated with the results of the inventory; d) File
surplus-new furniture affidavit with the state surplus administrator for
purchases of new furniture; e) Ensure submission of the Agency Report of
State Property by the reporting deadlines.
University officials concurred with the finding
and state they have made significant progress in improving controls over
property control since this report finding last year.
TIME SHEETS NOT REQUIRED
The University did not require all
employees to submit time sheets as required by the State Officials and
Employees Ethics Act.
The
Act required the Illinois Board of Higher Education (IBHE), with respect to
State employees of public universities, to adopt and implement personnel
policies. The Act (5 ILCS 430/5-5(c)
states, “The policies shall require State employees to periodically submit
time sheets documenting the time spent each day on official State business to
the nearest quarter hour.” The IBHE
adopted personnel policies for public universities on February 3, 2004 in
accordance with the Act. The
University has not incorporated these policies into the University’s
policies.
During
our review of time sheets for 30 employees during the year, we noted that 11
employees documented time to the nearest quarter hour and 19 employees were
using the “negative” timekeeping system whereby the employee is assumed to be
working unless noted otherwise.
University
procedures do not require time sheets documenting the time spent each day on
official State business to the nearest quarter hour to be submitted for
faculty, administrative and professional, exempt civil service, student aide,
and graduate assistants. (Finding 4, Pages 29-30)
We recommended the University amend its
policies to require all employees to submit time sheets in compliance with
the Act.
The University did not accept this
finding. The University assumed
compliance with the statute based upon guidance from the Executive Inspector
General. The University received a
memo from the Executive Inspector General that stated that absence reporting
would be an appropriate method of time keeping under the Ethics Act. Under this system, an employee would only
report time during their normal work schedule that was not spent at work and
provide the category of leave taken for that time away.
In an auditor comment we noted that the
State Officials and Employees Ethics Act defines “State Agency” to include
“public institutions of higher learning…” 5 ILCS 430/1-5. Northeastern Illinois University is
defined as a “public institution of higher learning” in Section 2 of the Higher
Education Cooperation Act…” 110 ILCS 220/2.
Further, the State Officials and Ethics Act defines “State employee”
to be “any employee of a State agency.”
5 ILCS 430/1-5.
As noted in the finding, the State
Officials and Employees Ethics Act requires “State employees to periodically
submit time sheets documenting the time spent each day on official State
business to the nearest quarter hour…” 5 ILCS 430/5-5 (c). This timekeeping requirement went into
effect March 1, 2004. The negative
timekeeping system used for several categories of University employees
requires those employees to report only time away from State business, not the time spent
each day on State business. Further, it is logical to assume that, by
adopting this language, the legislature meant to effect a change in the
method used by State employees to record their time – that is, to adopt a
positive timekeeping system. Finally,
the May 24, 2004, memorandum from the Office of Executive Inspector General
upon which the University relied in maintaining its customary negative
timekeeping system for several categories of its employees clearly states
that it “is not a legal opinion.”
We
continue to believe that a positive timekeeping system for State employees is
required by the State Officials and Employees Ethics Act. If the University disagrees with this
conclusion, we further recommend that it seek a formal, written opinion from
the Attorney General’s Office on the requirements of this statutory provision.
OTHER FINDINGS
The
remaining findings are reportedly being given attention by the
University. We will review the
University’s progress toward the implementation of our recommendations in our
next audit.
University responses were provided by Mark
Wilcockson, Vice President for Finance and Administration.
AUDITORS' OPINION
Our auditors stated the
University’s financial statements at June 30, 2005 and for the year then
ended are fairly presented in all material respects.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:TLK:pp
SPECIAL ASSISTANT AUDITORS
Our special
assistant auditors were E.C. Ortiz & Co., LLP.
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