REPORT DIGEST

NORTHERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2023

Release Date:  March 28, 2024

FINDINGS THIS AUDIT: 4

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  4 -- 0 -- 4
Category 3:  0 -- 0 -- 0
TOTAL:  4 – 0 -- 4

FINDINGS LAST AUDIT:  2

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 the Northern Illinois
University’s (University) Financial Audit as
of and for the year ended June 30, 2023.  A
digest covering the University’s Single
Audit was separately released. In addition,
a separate digest covering the University’s
Compliance Examination for the year ended
June 30, 2023, will be released at a later
date.

SYNOPSIS

• (23-1) The University did not properly
record and reconcile its capital assets
balances.

• (23-3) The University did not record a
right to use asset nor a related lease
liability for a lease agreement entered into
during fiscal year 2023 which met the
requirements of Governmental Accounting
Standards Board Statement No. 87, Leases.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CAPITAL ASSETS

Northern Illinois University (the
University) did not properly record and
reconcile its capital asset balances.

During our testing of the University’s
capital assets, we noted the following
errors which are not corrected in the
financial statements as they do not cause a
material misstatement:

• Two projects totaling $672,496,
substantially completed and put in use in
prior years, are included in year-end
construction in progress and no depreciation
has been recorded for the projects. The
projects should have been moved from
construction in progress to buildings in the
year of completion and depreciation started
in that year. The University elected not to
record the adjustment that was proposed.

• A balance of $469,593, unassociated with
any specific project and carried forward for
several years, is included in year-end
construction in progress. The University
plans to expense this amount in fiscal year
2024 and therefore elected not to record the
adjustment that was proposed.

• The University’s schedule of accumulated
depreciation, which we recalculated and
agree is fairly stated, exceeds the recorded
balance of accumulated depreciation by
$2,950,528. This is a historical variance
unrelated to current year depreciation,
which has been rolling forward for several
years. The University elected not to record
the adjustment that was proposed.

As a result of the issues noted above,
capital assets, net of accumulated
depreciation and net investment in capital
assets on the University’s statement of net
position are both overstated by
approximately $3,420,000. (Finding 1, Page
6)

We recommended the University adjust its
capital asset records in fiscal year 2024
for the noted errors and review its internal
controls over the recording and reconciling
of capital assets.

University officials accepted the finding.

LEASES

Northern Illinois University (the
University) did not record a right to use
asset nor a related lease liability for a
lease agreement entered into during fiscal
year 2023 which met the requirements of
Governmental Accounting Standards Board
(GASB) Statement No. 87, Leases.

During our testing of the completeness of
the University’s lease agreement detail, we
noted a five-year lease agreement for
copiers and printers that was not included.
The University’s year-end assets and
liabilities would have increased by
approximately $2,800,000 if this lease was
accounted for appropriately.

GASB Statement No. 87 states assets which an
entity has a non-cancellable right to use
for a period longer than one year should be
captured on the statement of net position as
intangible right to use assets and lease
liabilities. (Finding 3, Page 9)

We recommended the University add the lease
to its tracking software in fiscal year
2024.  We further recommended the University
enhance their procedures over the review of
potential lease agreements for proper
inclusion within the University’s financial
statements.

University officials accepted the finding.

OTHER FINDINGS

The remaining findings pertains to financial
statement errors and not utilizing the
effective interest rate method for
amortizing debt premiums on bond issuances.
We will review the University’s progress
towards the implementation of our
recommendations in our next financial audit.

AUDITOR’S OPINION

The auditors stated the financial statements
of the University as of and for the year
ended June 30, 2023 are fairly stated in all
material respects.

This financial audit was conducted by RSM US
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:TLK