REPORT DIGEST

NORTHEASTERN ILLINOIS UNIVERSITY

COMPLIANCE EXAMINATION AND SINGLE AUDIT
FOR THE YEAR ENDED JUNE 30, 2019

Release Date:  March 19, 2020

FINDINGS THIS AUDIT:  20

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  6 -- 14 -- 20
Category 3:  0 -- 0 -- 0
TOTAL:  6 -- 14 -- 20

FINDINGS LAST AUDIT: 21

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
FRANK J. MAUTINO, 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 federal Single Audit
and Compliance Examination of Northeastern
Illinois University (University) for the year
ended June 30, 2019.  A separate Financial
Audit as of and for the year ended June 30,
2019, was previously released on March 2,
2020. In total, this report contains 20
findings, none of which were reported in the
Financial Audit.

SYNOPSIS

• (19-01) The University did not timely notify
students when federal student aid loan funds
were credited to students’ accounts.
• (19-03) The University did not comply with
the internal controls and compliance
requirements on allowable cost and costs
principles.
• (19-04) The University did not communicate
required program information to subrecipients
of federal awards.
• (19-11) The University did not have adequate
controls over its property and equipment.

• (19-13) The University did not comply with
the College Student Immunization Act.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

UNTIMELY NOTIFICATION OF DISBURSEMENT OF LOAN
AND TEACH GRANTS

The University did not timely notify the
students when federal student aid loan funds
were credited to students’ accounts.

In testing 33 students who received Federal
Direct Student Loans and Teacher Education
Assistance for College and Higher Education
Grants (TEACH Grant) during the fiscal year,
we noted 25 (76%) students tested, in 46
disbursement transactions, were notified 39 to
49 days after the federal assistance was
credited to the students’ accounts.  The total
direct loan and TEACH Grants disbursed to
these students was $180,829.  In addition, we
noted 1 (3%) student was not notified of the
change in their federal loan. (Finding 1,
pages 17-18)

We recommended the University ensure
compliance with the federal regulations
regarding student notification.

University officials agreed with the finding.

WEAKNESSES OVER ALLOWABLE COSTS/COST
PRINCIPLES REQUIREMENTS

The University did not comply with the
internal controls and compliance requirements
on allowable costs and costs principles.

During our review of payroll documents for 29
employees, we noted the following:

• 14 (48%) employees submitted their time and
effort reports 9 to 42 days after the required
due date.
• Five (17%) employees did not submit
timesheets for the period tested.
• 16 (55%) employees for pay periods tested
were not timely completed and approved by the
supervisor or unit head. The timesheets were
approved one to 238 days late.

In addition, during our testing of 160
vouchers totaling $798,503, we noted the
following:

• Required signatures on purchase requisitions
and travel authorization of 2 (1%) vouchers
totaling $3,456 were not obtained. The
requisition forms for these vouchers totaling
$9,142, were increased, therefore requiring an
additional level of approval, which was not
obtained.
• Required signature of 6 (4%) vouchers
totaling $11,607 were not obtained.
• A voucher (1%) amounting to $1,100 was
charges to an incorrect expenditure category.
(Finding 3, pages 21-24)

We recommended the University improve its
procedures on time and effort reporting to
ensure timely submission of the reports and
compliance with University policy and Federal
regulations.  In addition, we recommended the
University strengthen its controls over
voucher processing to ensure compliance with
the University policies and prevent and detect
unauthorized transactions timely in compliance
with the University policy and Federal
regulations.

University officials agreed with the finding.

FAILURE TO COMMUNICATE REQUIRED INFORMATION TO
SUBRECIPIENTS

The University did not communicate required
program information to subrecipients of
federal awards.

During our testing of six subrecipients of the
Research and Development Cluster, Higher
Education Institutional Aid, and 21st Century
Community Learning Centers, the University did
not communicate the required information to 4
(67%) subrecipients with federal expenditures
totaling $131,256 to comply with federal
statutes, regulations, and terms and
conditions of the award.  (Finding 4 pages
25-26)

We recommended the University implement
uniform procedures across all departments to
serve as a guideline in communicating required
subaward information to subrecipients.

University officials agreed with the finding.

INADEQUATE CONTROLS OVER UNIVERSITY PROPERTY
AND EQUIPMENT

The University did not have adequate controls
over its property and equipment.

During our physical identification of 20 items
from the property records to the item, we
noted the following:

• One video set (5%) amounting to $1,437 could
not be located.  The University filed a
missing asset investigation report for this
item after the auditor’s observation.
• One ticket printer (5%) amounting to $1,969
did not have a tag number.
• Two (10%) equipment items consisting of a
laptop and a television totaling $5,628 were
found in a location different from the
location indicated in the property records

During our tracing of 20 items physically
identified to the property records, we noted
three (15%) equipment items consisting of a
projector, ticket printer, and a laptop
totaling $3,487 were found in a location
different from the location indicated in the
property records.

During our testing of 26 vouchers totaling
$499,603, we noted the following:

• Equipment items purchased consisting of
fiber optic transceivers and telecommunication
devices from two (8%) vouchers totaling
$72,889 were not tagged and were not included
in the property records.
• Various equipment items purchased, such as
music rotary filing cabinets and an HD scaling
auto-switcher, totaling $16,839 from two
vouchers (8%), were not timely recorded in the
property record.  These items were recorded
103 and 160 days after the vouchers were paid.

During our review of the University annual
inventory count certification, we noted the
following:

• The University did not accurately report the
results of its annual inventory count to CMS.
The University had no discrepancy reported on
its annual inventory certification as of
October 2018 submitted in February 2019 to
CMS.  The University performed the annual
inventory count between June 2018 to October
2018. During this timeframe, the University
identified 1,887 unlocated items totaling
$1,193,524.  1,578 items totaling $830,838
were non-computer items and 309 items totaling
$362,686 consisted of computers and laptops.
The University prepared and submitted deletion
requests for these unlocated items prior to
the submission of its annual inventory
certification to CMS, allowing the University
to report that there were no discrepancies
between its records and its annual inventory
count.
• The University did not have written
procedures to properly conduct the entire
physical count process including the objective
of the count, timing and types of counts,
instructions for counting and recording, and
researching and adjusting discrepancies, as
well as procedures and trainings to new
employees to perform the count.  (Finding 11,
pages 38-40)

We recommended the University improve its
procedures to ensure property and equipment
records are accurately maintained, University
assets are properly accounted for, and annual
inventory counts are properly conducted and
discrepancies accurately reported to CMS.

University officials agreed with the finding.

NONCOMPLIANCE WITH THE COLLEGE STUDENT
IMMUNIZATION ACT

The University did not comply with the
requirements of the
College Student Immunization Act (Act).

In Fiscal Year 2015, the University entered
into a ground lease agreement as a lessor to
lease its land to a lessee to develop,
finance, construct, and operate the
University’s student housing facility.  The
student housing facility opened for occupancy
in fall 2016.

During testing of 25 students enrolled in the
academic year 2018-2019, we noted the
following:

• The University did not obtain proof of
immunizations against preventable communicable
diseases for 14 (56%) students, of which 11
students enrolled in the subsequent semester
without providing proof of immunization.
• The University did not inform 9 (36%)
students of their incomplete immunization as
prescribed by the Act and allowed these
students to enroll in the subsequent semester.

In addition, the University did not file a
report with the Department of Public Health
(Department) as required by the Act.  (Finding
13 pages 43-44)

We recommended the University require and
maintain for inspection proof of immunization
from students prior to allowing the students
to attend the University. We also recommended
the University file the required reports to
the Department in compliance with the Act.
Lastly, we recommended the University seek a
formal Attorney General opinion on the
applicability of the Act.

University officials agreed with the finding.

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 engagement.

AUDITOR’S OPINIONS

The financial audit report was previously
released. The auditors stated the financial
statements of Northeastern Illinois University
as of and for the year ended June 30, 2019 are
fairly stated in all material respects.

The auditors also conducted a Single Audit of
the University as required by the Uniform
Guidance.  Our auditors stated the University
complied, in all material respects, with the
types of compliance requirements that could
have a direct and material effect on the
University’s major federal programs for the
year ended June 30, 2019.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the University for the year
ended June 30, 2020, as required by the
Illinois State Auditing Act.  The accountants
stated the University complied, in all
material respects, with the requirements
described in the report.

This Single Audit and compliance examination
was conducted by E.C. Ortiz & Co., LLP .

JANE CLARK
Division Director

This report is transmitted in accordance with
Section 3-14 of the Illinois State Auditing
Act.


FRANK J. MAUTINO
Auditor General

FJM:JGR