REPORT DIGEST WESTERN ILLINOIS UNIVERSITY FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2019 Release Date: March 12, 2020 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 0 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 FINDINGS LAST AUDIT: 0 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 SYNOPSIS • (19-01) The University did not properly monitor completion of capital assets in construction in progress to ensure timely capitalization and computation of depreciation of building improvements. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROL OVER MONITORING OF CAPITAL ASSETS IN CONSTRUCTIONS IN PROGRESS The University did not properly monitor completion of capital assets in construction in progress to ensure timely capitalization and computation of depreciation of building improvements. We noted the following in our audit of financial statements relating to capital assets: The University did not update its property records timely. We noted two constructions in progress projects completed in Fiscal Year 2019 that were not transferred to building improvements resulting in misclassification of depreciable capital assets by $1,183,634 and unrecorded depreciation costs totaling $24,636. • A roof project, totaling $671,736, was completed in November 2018, which resulted in unrecorded depreciation costs of $22,503. • An upgrade, totaling $511,898, was completed in June 2019, which resulted in unrecorded depreciation costs of $2,133. (Finding 1, pages 67-68) We recommended the University review current practices to determine if enhancements can be implemented to ensure the year-end checklist is properly monitored and each activity has been completed. The University agreed with the finding and stated the accounting department will place an increased emphasis on the review of the year- end checklist and Facilities Management project reports to ensure projects in construction in progress were capitalized or expensed appropriately. AUDITOR’S OPINION The auditors stated the financial statements of the University as of and for the years ended June 30, 2019, are fairly stated in all material respects. This financial audit was conducted by Adelfia, LLC. 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:sjs