REPORT DIGEST

SOUTHERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the Federal Single Audit Act of 1984 and OMB Circular A-133)
For the Year Ended:
June 30, 1996

Summary of Findings:

Release Date:
May 15, 1997

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• We noted a general lack of planning, coordination, and cooperation between the accounting departments of the two campuses and also with the university related organizations.

• Federal grant reports were not all submitted to the grantor agencies on time.

• University-wide policies, procedures and standards had not been adopted for administering and securing the University's Local Area Networks.

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

FY 1996

FY 1995

$187,741,369
85,589,741
66,382,157
49,966,947
38,654,260
34,977,413
40,234,807
$503,546,694

$169,502,631
28,019,703
35,144,489
66,815,028
51,888,326
40,691,301
57,292,469
46,324,977
$495,678,924

$178,448,158
83,660,667
58,516,957
47,947,956
39,394,408
35,288,030
35,378,621
$478,634,797

$166,018,457
29,234,764
32,095,621
62,758,124
49,659,405
39,270,455
57,629,323
44,170,591
$480,836,740

AT JUNE 30, 1996

AT JUNE 30, 1995

$ 82,960,893
771,731,023
45,415,462
51,882,012

$ 79,724,198
723,553,513
42,586,140
53,164,652

FY 1996

FY 1995

Students (Full-time Equivalent)
Carbondale
Edwardsville
Total Students
Instruction Costs Per Full-time Equivalent Student
Classroom Utilization (Daytime Maximum)
Carbondale
Edwardsville

6,985
2,376
9,361

18,975
7,957
26,932
$6,294

75%
79%

6,930
2,302
9,232

19,487
7,851
27,338
$6,073

77%
79%

Preparation of financial statements was delayed

Federal agencies require reports

Federal funding at risk

Computer security standards not adopted

Increased use of LAN applications

Safeguards needed

INTRODUCTION

Our 1996 audit of Southern Illinois University is presented in five volumes: State Compliance Audit; Federal Compliance Audit; Financial Audit; Housing and Auxiliary Facilities System Financial Audit; and Supplementary Financial Information Report. The State Compliance Audit presents seven compliance findings, and the Federal Compliance Audit presents five findings.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

LACK OF PLANNING AND COORDINATION IN ACCOUNTING AREA

During the financial audit fieldwork, we noted a general lack of planning, coordination, and cooperation between the Carbondale and Edwardsville campus' accounting departments, and between the campus' accounting departments and the University Related Organizations (UROs). Problems regarding the year-end closing procedures and addressing new accounting issues delayed the timely completion of the University's year-end financial statements. These financial statements are prepared by combining financial information from the University's three campuses and its five UROs. (Finding 1, page 9 in State report)

We recommended the Carbondale and Edwardsville campus' accounting departments and the UROs meet periodically throughout the year to improve their working relationships and clarify needs and expectations to facilitate effective, efficient and timely year-end closing and financial reporting procedures.

University officials accepted our recommendation and said management will take immediate steps to correct the situation.

FEDERAL GRANT REPORTS NOT FILED TIMELY

Testing of 31 federal grants at the Carbondale and Edwardsville campuses, revealed four of the grants had not submitted all required federal financial reports to the grantor agency on a timely basis. Grant reports not submitted on time were due to the following federal agencies:

National Aeronautics and Space Administration
U.S. Department of Agriculture
National Science Foundation
U.S. Department of Health and Human Services

Final and status reports are usually due to the grantor agency 90 days after the project's year-end or expiration.

Failure to submit federal reports on time has resulted from a combination of factors including lack of planning, the complexity of the reports, and failure to apply for an extension. Failure to meet the granting agency's guidelines could result in the reduction, denial or termination of future federal funding. (Finding 1, page 13 in Federal report)

We recommended the University develop a system to monitor and control the filing of federal reports in order to ensure timely submission.

University officials accepted our recommendation and responded a system will be developed to better monitor the filing of federal reports.

LACK OF STANDARD ADMINISTRATIVE AND SECURITY GUIDELINES FOR THE UNIVERSITY'S LOCAL AREA NETWORKS

University-wide policies, procedures and standards regarding Local Area Network (LAN) administration and security had not been adopted. As part of the University's move to a decentralized client server processing environment, the responsibility for administration of the Local Area Networks (LANs) has been assigned to individual LAN administrators. However, the responsibilities of LAN administrators have not been defined in sufficient detail.

As the University increases its use of LAN based applications, the level of security over data should be monitored to ensure that appropriate security over programs and data residing on the LANs is adequate. Therefore, it becomes necessary to have LAN policies and procedures established and enforced to ensure that the integrity of applications and databases residing on the networks is maintained.

University-wide policies, procedures, and standards regarding LAN administration and security as well as an administrative oversight body to monitor compliance with these standards both need to be developed to assure that the University's investment in this technology and the integrity of University data are properly safeguarded. (Finding 7, page 18 in State report)

We recommended the University establish a task force to draft LAN administrative and security standards to ensure controls are adequately addressed on University LANs.

University officials accepted our recommendation and stated Guidelines have been developed and are awaiting approval.

OTHER FINDINGS

The remaining findings are less significant and have been given appropriate attention by the University. We will review the University's progress towards the implementation of our recommendations in our next compliance audit.

Mr. Ron Cremeens, Executive Director of Audits, provided the University's responses.

AUDITORS' OPINION

Our auditors stated the June 30, 1996 financial statements of the University are fairly presented.

____________________________________
WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Coopers & Lybrand L.L.P. were our special assistant auditors for these audits.