REPORT DIGEST

ILLINOIS ARTS COUNCIL FOUNDATION

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2017

Release Date:  MAY 3, 2018

FINDINGS THIS AUDIT:  2

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  2 -- 0 -- 2
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 0 -- 2

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

INTRODUCTION

The Illinois Arts Council Foundation
(Foundation) was incorporated in 1967 as a
not-for-profit corporation.  The primary
function of the Foundation is to distribute
contributions received in the form of grants
to increase the awareness of the Illinois
Arts Council’s programs and services through
publications, public forums, promotional
activities and events.
SYNOPSIS

• (17-01) The Foundation had a small savings
account balance which incurred unnecessary
charges.
• (17-02) The Foundation did not hold their
annual meeting or elect a Board of Directors
as required by the Foundation’s By-Laws.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

BANK CHARGES FOR SMALL INACTIVE ACCOUNT
BALANCES

The Foundation had a small savings account
balance which incurred unnecessary charges.

The Foundation maintained a savings account
at a local bank with a balance of $2,389 at
June 30, 2017.  The Foundation was charged
$10 per month through October 2016 and $5 per
month from November 2016 through June 2017.
The Foundation was charged $80 and $120 for
fiscal years 2017 and 2016, respectively.

The auditors inquired with the Foundation as
to the reason for the charges; however, the
Foundation was unable to respond.  Upon
contacting the local bank, it was determined
the Foundation had not met the minimum
balance requirement.  The local bank stated
they could refund the Foundation one year of
charges; totaling $60.

As a result of the refunding of the bank
fees, the Foundation had an accounts
receivable of $50 at June 30, 2017, which had
not been recorded.  In addition, the
Foundation had not completed or submitted the
Quarterly Accounts Receivable Reports to the
Illinois Office of the Comptroller for fiscal
years 2017 and 2016.  (Finding 1, pages
10-11)

We recommended the Foundation review all
charges to ensure they understand the purpose
of the charge and ensure accounts receivable
are properly recorded.  Additionally, we
recommended the Foundation implement controls
to ensure accounts receivable quarterly
reports are completed and submitted to the
Office of the Comptroller.

The Foundation agreed with the finding and
stated they will review all charges to ensure
the purpose of the charge and ensure accounts
receivable are properly recorded.

NON-COMPLIANCE WITH FOUNDATION BY-LAWS

The Foundation did not hold their annual
meeting or elect a Board of Directors as
required by the Foundation’s By-Laws.

During fiscal year 2016, the Foundation did
not hold the annual meeting and did not hold
an election of Directors during the October
2016 annual meeting.

Additionally, the President of the Board is
to “submit a report of the operations of the
corporation for the preceding year to the
voting members at their annual meeting.”
However, the financial report for the year
ended June 30, 2015, was not presented to the
Board until October 2016.  (Finding 2, page
12)

We recommended the Foundation hold the annual
meeting and elect the Board of Directors as
required by the By-Laws.  In addition, we
recommended the President of the Board submit
the report of operations at the annual
meeting.

The Foundation agreed with the finding and
stated it will hold its annual meeting and
elect the Board of Directors.  Additionally,
the President of the Board will submit the
report of operations at the annual meeting.

AUDITOR’S OPINION

The auditors stated the financial statements
of the Illinois Arts Council Foundation as of
and for the years ended June 30, 2017, and
June 30, 2016, are fairly stated in all
material respects.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Illinois Arts Council
Foundation for the two years ended June 30,
2017, as required by the Illinois State
Auditing Act.  The accountants qualified
their report on State compliance for Findings
2017-001 and 2017-002.  Except for the
noncompliance described in these findings,
the accountants stated the Illinois Arts
Council Foundation complied, in all material
respects, with the requirements described in
the report.

This financial audit and compliance
examination was conducted by Winkel, Parker &
Foster, CPA PC.

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:MKL