NORTHERN ILLINOIS UNIVERSITY
For the Year Ended: June 30, 2011
Release Date: March 8, 2012
Summary of Findings:
Total this audit: 1
Total last audit: 0
Repeated from last audit: 0
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
This digest covers our financial audit of Northern Illinois University for the year ended June 30, 2011. A compliance examination covering the year ended June 30, 2011 will be issued at a later date.
• The University needs to improve internal controls over financial reporting.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
FINANCIAL REPORTING PROCESS
Northern Illinois University needs to improve internal control over financial reporting.
During our review of the draft financial statements of the University provided to the auditors, several errors and omissions relating to the draft financial statements and note disclosures were identified and corrected. Some of the more significant items were as follows:
• In January 2011, the University issued $67,135,000 of Auxiliary Facilities System Revenue Bonds (Series 2011) to refund the outstanding principal amount of the Series 1999 and the Series 2001 Auxiliary Facilities System Revenue Bonds. In relation to the issuance of the Series 2011 Bonds, the University did not disclose the economic gain resulting from the transaction of $500,000 or the difference in debt service between the new and old debt, a loss of $1,200,000, as required by generally accepted accounting principles (GAAP).
• Part of the restricted investments and marketable securities balance related to proceeds from bonds that will be used for capital additions, improvements and renovations was not properly classified between the current and noncurrent assets on the Statement of Net Assets, resulting in a reclassification of $42,160,000 in restricted investments and marketable securities from current assets to noncurrent assets.
According to University management, the missing disclosures were due to an oversight by management when the draft financial statements were prepared. (Finding #1, pages 5-6 in the Report Required Under Government Auditing Standards)
We recommended the University improve controls over financial reporting to ensure accurate presentation and disclosure of the University’s annual financial statements.
The University accepted our recommendation.
Our auditors stated the financial statements of Northern Illinois University as of June 30, 2011, and for the year then ended, are fairly stated in all material respects.
WILLIAM G. HOLLAND
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were McGladrey & Pullen LLP.