Chicago State University 2000 Audit

REPORT DIGEST

CHICAGO STATE UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

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

For the Year Ended:
June 30, 2000

Summary of Findings:

Total this audit 7

Total last audit 19

Repeated from last audit 5

Release Date:
May 24, 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 University did not deposit $716,876 in cash receipts in a timely manner.

The University had 49 exceptions out of 100 tested over its control of equipment including untagged and unlocated items.

The University did not prepare certain reports which summarize financial activities of local funds.

{Financial Information is summarized on the reverse page.}

CHICAGO STATE UNIVERSITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 2000

FINANCIAL OPERATIONS (CURRENT FUNDS)	FY 2000	FY 1999
REVENUES State appropriations State fringe benefits Student tuition Grants and contracts (principally Federal) Sales and auxiliary enterprises Other sources Total Revenues EXPENDITURES AND MANDATORY TRANSFERS Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Scholarships and fellowships Auxiliary enterprises Net mandatory transfers Total Expenditures	$39,288,270 9,304,026 18,919,820 19,720,340 3,241,890 2,427,407 $92,901,753 $37,719,952 1,215,884 4,189,865 6,311,785 7,883,406 9,292,216 7,564,744 12,644,312 3,478,714 2,819,467 $93,120,345	$36,990,600 8,538,258 18,516,014 17,250,232 3,345,163 2,625,250 $87,265,517 $35,680,651 2,019,480 3,864,102 4,661,433 6,889,310 8,093,816 7,394,481 12,627,334 3,677,503 1,693,254 $86,601,364
SELECTED ACCOUNT BALANCES (ALL FUNDS)	JUNE 30, 2000	JUNE 30, 1999
Cash and investments Investment in plant Accrued compensated absences Revenue bonds payable	$10,042,086 $122,755,373 $8,910,3024 $25,650,000	$6,392,921 $112,033,218 $10,197,394 $25,650,000
SUPPLEMENTARY INFORMATION	FY 2000	FY 1999
Employees Faculty and administrative Students Total Employees Students (Fall Term) Undergraduate Graduate Total Students Cost per Student	949 365 1,314 5,585 1,995 7,580 $4,976	961 408 1,369 6,336 2,080 8,416 $4,240
UNIVERSITY PRESIDENT
During Audit Period: Dr. Elnora Daniel Currently: Dr. Elnora Daniel

Receipts not deposited in a timely manner

Controls over property need to be improved

Improvements needed in reporting local funds

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

PROBLEMS NOTED IN PROCESSING CASH RECEIPTS

The University did not have adequate policies and procedures to ensure compliance with State statute. The State Officers and Employees Money Disposition Act requires proper books with a detailed itemized account of all monies received, showing the date of receipt, the payor, the purpose and amount. Receipts of $10,000 or more are required to be deposited within 48 hours of actual receipt.

We noted four weekend deposits totaling $716,876 that were deposited from one to four days late. We also noted three deposits totaling $768,779 that did not include a stamp or mark noting the date received, the payor and purpose of the receipts. Therefore, we could not determine if these items were deposited in a timely manner. Failure to make timely deposits significantly reduces the University's ability to prevent or detect errors or fraud, and the money is not available for expenditure or investment. (Finding 4, pages 25-26) This finding has been repeated since 1998.

We recommended the University establish a system that ensures compliance with statutory requirements, improves cash flow and reduces the risk of loss.

University officials concurred with our recommendation and stated that University receipts are normally picked up and deposited within the next business day. The items noted pertain only to weekend deposits. Pursuant to the auditors' recommendations, the University has implemented procedures to ensure that Friday receipts will be deposited within the time allowed by the Act, and will date stamp all receipts. (For previous Agency responses, see Digest Footnote #1.)

EXCEPTIONS NOTED IN CONTROLS OVER EQUIPMENT

We noted instances of the University's noncompliance with the State Property Control Act. Our testing of 100 items revealed the following:

Two items did not have a tag number.

Twenty-three items were at locations that did not agree with the property records.

Two items located at the University were not recorded in the inventory or property records.

Twenty-two items selected from the University records could not be located.

Failure to maintain control over equipment could result in theft or misuse of equipment. (Finding 5, pages 27-28) This finding has been repeated since 1997.

We recommended the University maintain accurate records of equipment to comply with statutory requirements and internal control procedures.

University officials concurred with our recommendation and stated that the actual locations of the twenty-three equipment items were identified during the physical inventory and the equipment records were updated accordingly. The twenty-two items not initially located were all subsequently found by University personnel. (For previous Agency responses, see Digest Footnote #2.)

PROBLEMS IN REPORTING LOCAL FUNDS

The University did not have written policies and procedures for the preparation and submission of the Locally-Held Funds Reports (Form C-17) which are required to be submitted to the State Comptroller's Office on a quarterly basis.

We noted the following differences between the reports and books and records:

The activity per the reports did not reconcile to the activity in the general ledger nor were we able to roll the balances forward to the next quarterly report.

The fourth quarter June 30, 2000 report for the Agency fund excluded receipt and disbursement activity.

The report information is used by the State Comptroller for reporting purposes and to ensure that all State agencies treat locally held funds uniformly, that all revenues due have been received and properly deposited, and that expenditures are recorded and summarized. (Finding 3, page 23) This finding has been repeated since 1998.

We recommended the University assign the responsibility of preparation of the reports to knowledgeable persons and that an independent person review the report to ensure that it has been accurately prepared.

University officials concurred with our recommendation and stated that differences between the reports' roll forward balances and the books and records have been reconciled to establish an accurate starting point for the next fiscal year's quarterly reports. Agency Funds receipts and disbursements activity will be also reported. (For previous Agency responses, see Digest Footnote #3.)

OTHER FINDINGS

The remaining findings are being given attention by the University. We will review progress toward implementation of our recommendations in our next audit. University responses to the findings were provided by President Elnora D. Daniel in a letter dated April 9, 2001.

AUDITORS’ OPINION

Our auditors state the financial statements of Chicago State University and its Revenue Bonds 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

Washington, Pittman & McKeever, LLC were our special assistant auditors for this audit.

DIGEST FOOTNOTES

#1 RECEIPTS NOT PROCESSED IN A TIMELY MANNER - Previous Agency Responses

1999: We agree. The University accepts the recommendation to record and deposit cash receipts in a timely manner. The University has made great strides in this area since 1998. In 1999, we continued to aggressively respond to this issue to ensure that this finding will not recur. A new policy was issued to ensure that all checks and receipts received are deposited to the Cashier in a timely manner. In addition, Sponsored Programs issued a separate policy related to grant checks, in order to centralize checks mailed to the University, and to ensure same day deposit. Both new policies were reviewed at the quarterly Fiscal Officers' training meeting on January 27, 2000, to ensure compliance.

1998: We agree.

#2 CONTROLS OVER FIXED ASSETS - Previous Agency Responses

1999: We agree. We are in the process of performing a comprehensive physical inventory of equipment. We will also be able to reconcile physical inventory to the property control records and general ledger. Any differences will be investigated and resolved. The University has a policy on equipment transfers, which we will enforce. We have also required that tag numbers accompany the supporting documentation in order to process an item for payment. This will assure that all new purchases are inventoried and tagged.

1998: We agree. The University will comply with SAMS classification guidelines for capital leases. Also, additional inventory testing for property and control will be performed.

1997: We agree.

#3 PROBLEMS IN REPORTING LOCAL FUNDS - Previous Agency Responses

1999: We agree. The process for quarterly reporting of receipts and disbursement of Form C-17 has been revised to assure compliance with the Comptroller's Office. The University has taken steps to make sure that the Form C-17 has been reviewed prior to submission. Although we reconcile our cash and book balances monthly, we will include a process that also reconciles our "claim on cash" (the amount of each fund's claim on the total University's cash). Therefore, each fund's "claim on cash" will reconcile to the total bank funds, which in turn reconcile to the bank statements. This additional reconciliation steps is possible using the new accounting software and should eliminate this finding.

1998: We agree. The preparation of the C-17 report is not the responsibility of the Comptroller.