REPORT DIGEST NORTHERN ILLINOIS UNIVERSITY Single Audit and State Compliance Examination For the Year Ended June 30, 2015 Release Date: March 24, 2016 FINDINGS THIS AUDIT: 10 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 3 -- 7 -- 10 Category 3: 0 -- 0 -- 0 TOTAL: 3 -- 7 -- 10 FINDINGS LAST AUDIT: 9 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 SYNOPSIS • (15-6) The University completed inaccurate TA-2 Forms. The University also improperly reimbursed an employee for travel to and from headquarters during fiscal year 2014 and did not recoup any of the disbursements until fiscal year 2016. • (15-10) The University failed to comply with the requirements applicable to its property and equipment. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO PROPERLY COMPLETE TA-2 FORMS The University submitted incomplete TA-2 forms to the Legislative Audit Commission (Commission). The University also improperly reimbursed an employee for travel to and from headquarters during fiscal year 2014 and did not recoup any disbursements until fiscal year 2016. TA-2 forms are filed semi-annually with the Commission to report when the official headquarters of an employee differs from the location the employee performs most of his/her official duties and the reason for the difference. Northern Illinois University has each of its departments complete a TA-2 form listing the employees within the department meeting this criterion for filing with the Commission. Out of the 80 TA-2 forms tested, we noted the following errors: • 1 form (1%) was submitted to the Commission a day after the due date. • 1 form (1%) did not specify the official headquarters of the employees listed on the form and why it would differ from where they performed a majority of their official duties. • 2 forms (3%) did not include the last four digits of an employee’s social security number. During our testing of travel expenditures in fiscal year 2014 we noted that $31,945 of the $46,501 tested (69%) were reimbursements to an employee for travel between the employee’s home and the official headquarters listed on the TA-2 forms. Travel expenses between an employee’s official headquarters and home are automatically considered unreimbursable. It was recommended that the University recoup this improper disbursement, but an agreement with the employee was not reached until fiscal year 2016 at which point $17,515 (55%) was returned to the University. (Finding 6, pages 22-23) We recommended the University implement procedures so that all required fields of the TA-2 forms are accurately completed prior to the filing of the forms with the Commission. University officials accepted the recommendation and stated they have amended procedures to provide additional training to departments on accurate completion of TA-2 forms and timely follow-up on incomplete submissions. INADEQUATE CONTROLS OVER PROPERTY AND EQUIPMENT Northern Illinois University (University) did not fully comply with requirements applicable to its property and equipment. The following are some of the items we noted during our testing of the University’s property and equipment: • We reviewed the University’s property inventory certification as of January 8, 2015 that was submitted to the Department of Central Management Services (DCMS). The inventory certification to DCMS reported 244 items ($322,539) of equipment that could not be located by the University. These assets were acquired by the University during the current as well as past fiscal years. Included in this listing were approximately 57 computers, servers, CPUs, or other electronic storage devices. • We also noted the University filed amended Agency Reports of State Property (C-15) in September 2015 for all four quarters of fiscal year 2015 to correct errors in the reported additions to construction in progress. When we tested the amended C-15s, however, we noted that there were still errors in the reported amounts of construction in progress as additions were being reported a quarter after the addition occurred. This caused reported additions to construction in progress to be over/ (under) stated by approximately ($711,034), ($1,610,724), $193,804, and $2,165,672 during quarters one through four respectively on the C-15 reports. (Finding 10, pages 29-30). We recommended the University strengthen its internal controls over the accountability of University property and equipment. We also recommended the University implement procedures to ensure the accuracy of its quarterly property reporting to the Comptroller’s office. University officials accepted the recommendation and stated they will review its processes, amend procedures to strengthen control over University assets, and retrain staff to ensure accurate quarterly reporting. OTHER FINDINGS The remaining findings are reportedly being given attention by University officials. We will review progress toward implementation of our recommendations in our next audit. AUDITOR’S OPINION The financial audit report was previously released. The auditors stated the financial statements of Northern Illinois University as of and for the year ended June 30, 2015, are fairly stated in all material respects. The auditors also conducted a Single Audit of the University as required by OMB Circular A-133. 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 each of the University’s major federal programs for the year ended June 30, 2015. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the University for the year ended June 30, 2015, as required by the Illinois State Auditing Act. The auditors stated the University complied, in all material respects, with the requirements described in the report. FRANK J. MAUTINO Auditor General FJM:TLK SPECIAL ASSISTANT AUDITORS RSM US LLP were our Special Assistant Auditors for this engagement.