REPORT DIGEST

SOUTHERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

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

For the Year Ended:

June 30, 2005

Summary of Findings:

Total this audit 3

Total last audit 3

Repeated from last audit 1

Release Date:

March 23, 2006

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 the Full Report are also available on

the worldwide web at

http://www.state.il.us/auditor

SYNOPSIS

• Timesheets are not maintained in compliance with the State Officials and Employees Ethics Act.

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

SOUTHERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

FOR THE YEAR ENDED JUNE 30, 2005

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

FY2005

FY2004

OPERATING REVENUES

Student tuition and fees........................................

Auxiliary enterprises.................................................

Grants and contracts............................................

Sales and services of educational activities..............

Other.............................................................

Total Operating Revenues..................

OPERATING EXPENSES

Instruction...........................................................

Research..............................................................

Public services...................................................

Academic support.................................................

Student services.....................................................

Institutional support...............................................

Operation and maintenance of plant........................

Scholarships and fellowships...................................

Auxiliary enterprises..................................... Depreciation............................................................

Additional on-behalf SURS allocation for unfunded liability...

Other....................................................................

Total Operating Expenses................................

Operating Loss.....................................................

NONOPERATING REVENUES (EXPENSES)

State appropriations............................................

Payments on behalf of the University....................

Additional on-behalf SURS allocation for unfunded liability.............................................................

Other non-operating revenues (expenses), net.........

Net Non-operating Revenues .......................

Income (Loss) Before Capital Contributions.......

Capital appropriations, additions to endowments and
capital grants and gifts..........................................

INCREASE IN NET ASSETS.................................

Net assets, beginning of the year...............................

Net assets, end of the year

$144,102,417

74,706,877

90,701,261

83,291,635

374,864

$393,177,054

$242,327,412

48,383,431

55,440,574

98,746,353

52,675,779

56,640,579

60,947,591

19,019,815

70,180,400

31,842,676

410,227

$736,614,837

($343,437,783)

$217,425,727

98,121,894

31,161,479

$346,709,100

$3,271,317

$9,040,426

$12,311,743

$355,430,562

$367,742,305

$128,651,935

70,679,014

88,010,306

72,907,124

468,086

$360,716,465

$225,548,481

48,493,944

52,498,428

92,270,967

47,787,416

58,298,105

59,610,827

18,501,136

70,637,616

29,140,624

141,111,746

90,328

$843,989,618

($483,273,153)

$213,458,064

92,928,477

141,111,746

24,202,508

$471,700,795

($11,572,358)

$20,719,758

$9,147,400

$346,283,162

$355,430,562

SELECTED ACCOUNT BALANCES

JUNE 30, 2005

JUNE 30, 2004

Cash and investments....................................

Capital assets, net of accumulated depreciation.............

Total Assets.............................................................

Revenue bonds, notes payable and capital lease

obligations.........................................................

Accrued compensated absences..................................

Total Liabilities............................................................

Net assets................................................................

$222,091,080

$472,049,234

$763,763,703

$191,202,009

$44,878,658

$396,021,398

$367,742,305

$197,004,741

$449,902,411

$712,540,715

$151,881,739

$44,430,126

$357,110,153

$355,430,562

UNIVERSITY PRESIDENT

During Audit Period: Dr. James E. Walker

Currently: Glenn Poshard

Timesheets are only maintained for the Universities hourly paid employees, extra help and student workers

University officials disagree

Auditors’ Comment

INTRODUCTION

Our 2005 audit of Southern Illinois University is presented in three volumes: Compliance Examination; Financial Audit; and Supplementary Financial Information. The findings and recommendations are contained in the Compliance Examination volume.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

TIMESHEETS ARE NOT MAINTAINED IN COMPLIANCE WITH THE STATE OFFICIALS AND EMPLOYEES ETHICS ACT

The University did not require time sheets from certain of its employees, including those assigned to its University Related Organizations.

The State Officials and Employees Ethics Act (Act) requires the University to adopt personnel policies consistent with the Act. The Act (5 ILCS 430/5-5(c)) states that the policies shall require State employees to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour.

We noted the majority of the Universities employees did not maintain time sheets in compliance with the Act. Employee’s time is generally tracked using the Human Resources Management System, which is a “negative” timekeeping system whereby the employee is assumed to be working unless noted otherwise. The only employees documenting their work time to the nearest quarter hour were hourly paid civil service employees, extra help, student workers, and non-status employees. (Finding No. 1, pages 19-21)

We recommended the University require all its employees to maintain time sheets in compliance with the Act.

The University respectfully took exception to our finding. University personnel indicated that its current timekeeping policies and procedures, as approved by the Office of the Executive Inspector General, meet the intent of the Act and do so in a more efficient and cost effective manner than the procedures specified by this finding.

In an auditors’ comment, we pointed out that the memorandum from the Office of the Executive Inspector General, upon which the University relied, states it is not a legal opinion. Further, the auditors continue to believe that a positive timekeeping system for State employees is required by the Act. If the University continues to disagree with this conclusion, we further recommended that it seek a formal, written opinion from the Attorney General’s Office on the requirements of this statutory provision.

OTHER FINDINGS

The remaining findings are reportedly being given attention by the University. We will follow-up on all findings in our next audit of the University.

Mr. Ron Cremeens, Internal Audit Director, provided the University's responses.

AUDITORS’ OPINION

Our auditors stated the financial statements of the University as of June 30, 2005 and for the year then ended are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KAL:pp

SPECIAL ASSISTANT AUDITORS

Kerber, Eck & Braeckel LLP were our special assistant auditors for this audit.