REPORT DIGEST

NORTHERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

(In accordance with the Federal Single Audit Act and OMB Circular A-133)

For the Year Ended:
June 30, 1999

Summary of Findings:

Total this audit 5
Total last audit 2
Repeated from last audit 0

Release Date:
March 21, 2000

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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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646
This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

  • The University did not perform timely reconciliations of its bank accounts. These bank accounts have approximately $61 million of activity recorded each month.
  • The University did not have adequate controls over the review of unemployment claims and payments.

 

 

 

 

 

 

 

{Expenditures and Activity Measures are summarized on the next page.}

 

 

NORTHERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

For The Year Ended June 30, 1999 (in Thousands)

FINANCIAL OPERATIONS (CURRENT FUNDS)

FY 1999

FY 1998

REVENUES
Appropriations
Student tuition and fees
Grants, contracts, and gifts
Sales and services of educational departments
Auxiliary enterprises
Other
TOTAL

EXPENDITURES, MANDATORY TRANSFERS, AND OTHER
Instruction
Research
Public service
Academic support
Student services
Operation of plant
Institutional support
Staff benefits
Scholarships and fellowships
Auxiliary enterprises
Other transfers and additions
Total


$ 129,510
68,593
27,151
6,967
56,645
11,234
$ 300,100


$ 94,855
10,707
10,586
23,333
10,096
16,250
18,937
30,072
22,267
57,740
1,835
$ 296,678


$ 123,237
64,969
24,941
13,963
55,106
4,845
$ 287,061


$ 89,763
10,537
9,534
22,129
10,143
17,975
15,623
28,005
19,454
56,695
1,535
$ 281,393

ACCOUNT BALANCES (ALL FUNDS)

FY 1999

FY 1998

Cash and cash equivalents
Investments and marketable securities
Investment in plant
Accrued compensated absences
Revenue bonds payable
Leases payable
Fund balances (deficit)
Unrestricted
Restricted
U.S. government advances refundable
Net investment in plant

$32,569
$41,984
$470,327
$25,513
$83,003
$21,132

$(5,238)
$1,860
$5,873
$354,312

$15,092
$46,128
$468,261
$25,713
$84,328
$347

$(8,678)
$1,770
$5,717
$369,989

SUPPLEMENTARY INFORMATION (In whole numbers)

FY 1999

FY 1998

Employment Statistics
Appropriated funds:
Faculty/administrative
Civil service
Student employees
Miscellaneous contracts
Nonappropriated funds:
Faculty/administrative
Civil services
Student employees
Total Employees

Selected Activity Measures
Fall semester enrollment - Undergraduate
Fall semester enrollment - Graduate
Total full-time equivalent semester cost per student



1,566
969
146
49

380
650
474
4,234

14,818
2,776
$3,689



1,561
1,004
135
29

358
583
426
4,096

14,323
2,863
$3,516

UNIVERSITY PRESIDENT
During Audit Period: Dr. John E. LaTourette
Currently: Dr. John E. LaTourette
 

 

 

 

Monthly bank account reconciliations were not timely prepared

 

 

 

 

 

 

 

 

 

 

Problems in reviewing unemployment benefit claims

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

RECONCILIATION OF BANK ACCOUNTS NEED TO BE PERFORMED TIMELY

The University did not perform timely bank account reconciliations on seven bank accounts that are recorded in one general ledger account. For example, the July, 1998 reconciliation was not prepared until the end of December and not approved until March, 1999. Average monthly receipts and disbursements in these accounts which include interbank transfers are approximately $61 million. (Finding 2, page 22)

We recommended the University perform bank account reconciliations in a timely manner. Further, these bank reconciliations should be reviewed and approved within a reasonable amount of time after preparation to ensure that reconciling items are appropriately addressed and promptly investigated.

University officials concurred with the recommendation and stated that the delay in bank reconciliations was the result of financial accounting staff being involved with activities related to the implementation of the new accounting system.

LACK OF CONTROLS IN MONITORING UNEMPLOYMENT COMPENSATION

The University's failure to develop adequate controls over the review of unemployment benefit claims and payments has resulted in several problems.

During FY 99, 22 former or current employees of the University received $35,047 in unemployment benefits. To test controls of unemployment benefit processing, we selected a sample of 20 of the 22 benefit recipients. We tested for documentation support for the unemployment benefits paid, as well as the appropriateness of the benefit payments.

Failure to Protest Questionable Unemployment Claims

In 30 percent (6 of 20) of the cases sampled, the University failed to protest potentially ineligible unemployment claims resulting in questionable benefits being paid. In 3 of the 6 instances the University failed to protest that the individuals resigned their employment. These 3 individuals were paid $8,994 for 54 weeks of unemployment. In 2 of the 6 instances the University failed to protest claims of academic personnel with a history of rehire that were filing for benefits between academic terms. Additionally, employment offer sheets were tendered to these two individuals, but no notice was given to the Illinois Department of Employment Security. These 2 individuals were paid $4,304 for 16 weeks of unemployment. Finally, in one instance documentation showed that an individual was dismissed during the probationary period for failure to comply with departmental regulations. In all 6 of these cases, the individuals' eligibility for benefits was questionable.

Vacation Pay

In 20 percent (4 of 20) of the cases reviewed, the University failed to report $5,930 in vacation payments, which are equivalent to wages, while the individuals were also receiving unemployment benefits. These 4 individuals received 80 weeks of unemployment benefits totaling $10,403.

Failure to Report Simultaneous Work

In 5 percent (1 of 20) of the cases reviewed, a benefit recipient was working at the University while also receiving unemployment benefits resulting in questionable benefits. Questionable unemployment benefit payments made to this individual totaled $205 for 2 weeks.

Lack of Documentation

In 10 percent (2 of 20) of the cases sampled, we found that the University lacked some documentation to provide for adequate review of unemployment benefits paid out and charged to the State. (Finding 5, pages 26-28)

We recommended the University develop policies and procedures for the review of unemployment benefit claims and charges that include protesting all cases where potential ineligibility exists so that State resources are adequately protected.

University officials concurred with our recommendation.

OTHER FINDINGS

The remaining findings and recommendations were less significant and are being given attention by University management. We will review progress toward implementation of our recommendations during our next audit.

University responses were provided by Ms. Kathe Munz-Shinham, Associate Vice President, Division of Finance and Facilities.

AUDITORS’ OPINION

Our auditors stated the financial statements of Northern Illinois University as of June 30, 1999, and for the year then ended are fairly presented in all material respects.

 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:SES:pp

SPECIAL ASSISTANT AUDITORS

Bronner Group, INC. were our special assistant auditors for this audit.