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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
INADEQUATE CONTROLS OVER BANK RECONCILIATIONS
The University did not have adequate
controls over bank reconciliations.
Each month, the University is reconciling four separate bank
accounts: the General Fund, the
Foundation account, the Payroll disbursements account, and the Athletics
account, therefore a total of 48 reconciliations are to be performed each
year.
During our review, we noted
reconciliations were not timely completed.
The July 2005 reconciliation for the General Fund was completed 52
days after the month ended. Subsequent
reconciliations were not dated as to preparation and review, therefore,
timeliness cannot be determined. We
also noted long outstanding checks were not promptly investigated and
disposed. As of the June 30, 2006
bank account reconciliations, 268 outstanding checks totaling $35,525 were
more than 6 months from the checks’ issue date.
Effective internal control
policies require all transactions be recorded in the accounting system in a
timely manner and bank reconciliations be performed and reviewed in a timely
manner. Reconciling items should be
investigated and disposed promptly.
(Finding 1, pages 17-18)
University officials agreed
and stated they had some difficulty in this area due to retirements and the
training of new personnel. With new
personnel in place and trained, they believe that this situation will be
remedied.
TIME SHEETS NOT REQUIRED
The University did not require all employees to submit time
sheets as required by the State Officials and Employees Ethics Act.
The
Act required the Illinois Board of Higher Education (IBHE), with respect to
State employees of public universities, to adopt and implement personnel
policies. The Act (5 ILCS 430/5-5(c)
states, “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.” The IBHE
adopted personnel policies for public universities on February 3, 2004 in
accordance with the Act. The
University has not incorporated these policies into the University’s
policies.
We noted that the University’s salaried
employees did not maintain timesheets in compliance with the Act. Employees’ time is tracked using time
rosters, which are filled out by each department’s Fiscal Agent. The time rosters used are effectively a
“negative” timekeeping system whereby the employee is assumed to be working
unless noted otherwise. No time
sheets documenting the time spent each day on official State business to the
nearest quarter hour are maintained for the majority of the University’s
employees. The employees documenting
time to the nearest quarter hour were only Civil Service biweekly-paid and
student employees, who record time on time sheets to the nearest quarter
hour. (Finding 3, pages 21-22)
We recommended the University amend its
policies to require all employees to submit time sheets in compliance with
the Act.
University officials did not concur with
this finding. The University assumed
compliance with the statute based upon guidance from the Executive Inspector
General. The University received a
memo from the Executive Inspector General that stated that absence reporting
would be an appropriate method of time keeping under the Ethics Act. Under this system, an employee would only report
time during their normal work schedule that was not spent at work and provide
the category of leave taken for that time away.
In an auditor comment we noted that the State Officials and
Employees Ethics Act defines “State Agency” to include “public institutions
of higher learning…” 5 ILCS 430/1-5.
Eastern Illinois University is defined as a “public institution of
higher learning” in Section 2 of the Higher Education Cooperation Act…” 110
ILCS 220/2. Further, the State
Officials and Employees Ethics Act defines “State employee” to be “any
employee of a State agency.” 5 ILCS
430/1-5.
As noted in the finding, the State
Officials and Employees Ethics Act requires “State employees to periodically
submit time sheets documenting the time spent each day on official State
business to the nearest quarter hour…” 5 ILCS 430/5-5 (c). This timekeeping requirement went into
effect March 1, 2004. The negative
timekeeping system used for several categories of University employees
requires those employees to report only time away from State business, not the time spent
each day on State business. Further, it is logical to assume that, by
adopting this language, the legislature meant to effect a change in the
method used by State employees to record their time – that is, to adopt a
positive timekeeping system. Finally,
the May 24, 2004, memorandum from the Office of Executive Inspector General
upon which the University relied in maintaining its customary negative
timekeeping system for several categories of its employees clearly states
that it “is not a legal opinion.”
We
continue to believe that a positive timekeeping system for State employees is
required by the State Officials and Employees Ethics Act. If the University disagrees with this
conclusion, we further recommend that it seek a formal, written opinion from
the Attorney General’s Office on the requirements of this statutory
provision.
REQUIRED INFORMATION NOT INCLUDED ON
PRINTED MATERIALS
The University did not
include information required by the Illinois Procurement Code on publications printed for the
University.
None of the
books, pamphlets, documents or reports published by or for the University
contained the information required by the Illinois Procurement Code. (Finding
4, pages 23-24)
We recommended
that the University begin printing the information required by the Illinois
Procurement Code on all publications or pursue a statutory change.
University
officials did not concur with the finding.
They stated that they believe the General Assembly did not intend to
apply the section of the Procurement Code on state agency printing to
academic materials published by the state universities.
In an
auditor comment we noted that Universities are specifically enumerated as
“state agencies” for purposes of the Procurement Code (30 ILCS
500/1-15.100). Section 20-105
requires all “state agencies” to print certain information on each
publication. This section does not
have an exception for universities, therefore we continue to believe that it
does apply.
If the
University continues to disagree with this conclusion, we recommend 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 review the University’s progress
toward the implementation of our recommendations in our next examination.
AUDITORS' OPINION
Our financial statement audit for the year ended June 30,
2006 was previously issued. Our
auditors stated the University's financial statements as of and for the year
ended June 30, 2006 are fairly presented in all material respects.
____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:KMA:pp
SPECIAL ASSISTANT AUDITORS
E.C. Ortiz & Co. LLP were our special assistant auditors
on this engagement.
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