NIU Foundation Audit

REPORT DIGEST
NORTHERN ILLINOIS UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the Year Ended:
June 30, 2000

COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 2000

Summary of Findings:

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

Release Date:
March 20, 2001

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 Foundation did not close its books in a timely fashion to meet the University's filing requirements with the State Comptroller.

The Foundation lacked written procedures for donated property and equipment.

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

NORTHERN ILLINOIS UNIVERSITY FOUNDATION
FINANCIAL AUDIT
For the Year Ended June 30, 2000
COMPLIANCE AUDIT
For the Two Years Ended June 30, 2000

FINANCIAL OPERATIONS (ALL FUNDS)	FY 2000	FY 1999
REVENUES AND OTHER ADDITIONS Gifts Royalties Investment Income Contract Services Provided to NIU Expended for Plant Facilities All Other Income Total Revenue and Other Additions	$11,808,113 1,406,016 1,762,804 330,842 146,802 200,474 $15,655,051	$6,420,166 13,051 636,727 374,996 - 113,685 $7,558,625
EXPENDITURES AND OTHER DEDUCTIONS Scholarships Support for University Departments and Programs Library Books, Equipment and Property Improvements Administrative Services Provided to NIU Administrative and Office Expenses Interest Expense Total Expenditures and Other Deductions	$537,059 2,377,629 2,069,716 260,860 112,574 - $5,357,838	$442,379 2,206,225 2,733,763 277,996 106,466 1,697 $5,768,526
SELECTED ACCOUNT BALANCES	AT JUNE 30, 2000	AT JUNE 30, 1999
Cash and Cash Equivalents Investments Land and Buildings Equipment Due to Northern Illinois University Deposits Held for NIU Alumni Association Unrestricted Fund Balance Restricted Fund Balance Endowment Investment in Plant	$2,215,614 27,368,372 4,026,152 2,038,672 1,130,905 1,625,888 1,943,390 5,935,549 18,823,838 6,638,436	$1,498,749 21,953,040 401,068 1,578,672 1,285,171 1,501,466 1,768,214 4,752,192 13,991,560 2,532,034

FOUNDATION PRESIDENT

During audit period: Ms. Mallory M. Simpson
Currently: Ms. Mallory M. Simpson

Untimely preparation of Year-end Financial Statements

Property procedures did not exist for donated equipment

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NEED TO IMPROVE TIMELINESS OF FINANCIAL REPORTING

The Northern Illinois University (NIU) Foundation did not submit its annual financial statements to NIU for inclusion in generally accepted accounting principles (GAAP) reporting form transactions until November 2, 2000. As a result, NIU did not submit required financial information to the State Comptroller until November 6, 2000 or 36 days after the reporting deadline.

The Foundation is a component unit of NIU. Consequently, NIU is required to report financial transactions for itself and its component units (NIU Alumni Association and NIU Foundation). Further, the Statewide Accounting Management System (SAMS) policies and procedures require complete financial information from NIU (including its component units) on or before September 30, 2000. (Finding 1, pages 11-12)

We recommended the Foundation review its current workload and resources to address its financial reporting requirements.

Foundation officials concurred with the recommendation and stated they are reviewing their operational processes to determine what additional staff skill-set resources would be most advantageous to its needs.

DONATED PROPERTY RECORDS WERE INADEQUATELY MAINTAINED

Donated property and equipment was not being managed effectively. Donated items were not tagged, the master listing did not include basic information as to description, cost, and location. In addition, annual physical inventories were not conducted. Donations that were salvaged by a University department were not effectively controlled or monitored for accurate and timely accounting in the Foundation's donated property ledger. (Finding 2, page 13)

We recommended the Foundation develop policies and procedures for donated property and equipment items as they relate to physical control and accountability including disposal and retirement.

Foundation officials concurred with the recommendation and stated they will develop guidelines in cooperation with the University departments.

Foundation responses were provided by Ms. Jean Jagodzinski, Controller.

AUDITORS’ OPINION

Our auditors stated the financial statements of Northern Illinois University Foundation as of June 30, 2000 and for the year then ended, are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were the Bronner Group.