REPORT DIGEST EASTERN ILLINOIS UNIVERSITY FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2023 Release Date: February 6, 2024 FINDINGS THIS AUDIT: 3 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 1* -- 2 -- 3 Category 2: 0 -- 0 -- 0 Category 3: 0 -- 0 -- 0 TOTAL: 1 – 2 -- 3 FINDINGS LAST AUDIT: 2 * Finding 2023-003 is considered a new finding for the 6-30-23 financial audit, but was reported in the compliance examination for the period ended 6-30-22. 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 This digest covers Eastern Illinois University’s Financial Audit as of and for the year ended June 30, 2023. Digests covering the University’s Single Audit and the University’s Compliance Examination for the year ended June 30, 2023 will be issued at a later date. SYNOPSIS (23-01) The University did not have adequate internal control over reporting its census data and did not have a reconciliation process to provide assurance census data submitted to its pension and other postemployment benefits (OPEB) plans was complete and accurate. (23-02) The University’s year-end financial reporting in accordance with generally accepted accounting principles (GAAP) contained inaccurate information. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE INTERNAL CONTROLS OVER CENSUS DATA Eastern Illinois University (University) did not have adequate internal control over reporting its census data and did not have a reconciliation process to provide assurance census data submitted to its pension and other postemployment benefits (OPEB) plans was complete and accurate. During testing, some of the more significant issues we noted include the following: • The University had not performed an initial complete reconciliation of its census data recorded by SURS to its internal records to establish a base year of complete and accurate data. • During our testing of instructor eligibility testing, we noted 19 instructors were not reported as eligible to participate in SURS by the university. All of these instances have been previously reported, however still impacted the June 30, 2021 census data. SURS determined the total potential impact of this error was the instructor’s total service credit was off by a combined 41.5 years. (Finding 1, pages 5-8) We recommended the University continue to work with SURS to complete the base year reconciliation of fiscal year 2021 active members’ census data from its underlying records to a report of census data submitted to SURS’ actuary and CMS’ actuary. The University agreed with the recommendation. WEAKNESSES IN PREPARATION OF YEAR-END FINANCIAL STATEMENTS Eastern Illinois University’s year-end financial reporting in accordance with generally accepted accounting principles (GAAP) contained inaccurate information. The University did not have adequate controls over the completeness and accuracy of year-end financial reporting which resulted in errors in the GAAP basis financial statements and supporting schedules provided to us during our audit. The University did not perform a sufficient supervisory review of all amounts recorded in its financial statements and footnotes. Also, as a result of audit differences identified by us as well as additional corrections subsequently identified by the University, the University provided us with several revisions to its draft financial statements, with significant modifications, before providing its final draft revision on January 10, 2024. We noted the following issues while testing the year-end financial reporting process, which were corrected by the University after we brought them to its attention: • Restricted net position for the bond system was understated by $3,308,576 and unrestricted net position was overstated by the same amount due to an adjustment made to the year ended June 30, 2022, financial statements but not carried forward to the current fiscal year. • Tuition discounts for the MAP grant were understated by $1,832,800, resulting in the overstatement of revenue and operating expenses by the same amount due to a calculation error. • We also identified several errors in the Management Discussion and Analysis section of the financial report as well as the footnotes to the financial statements. The University corrected each of these accordingly. (Finding 2, pages 9-10) We recommended the University strengthen its internal controls to ensure financial statements are prepared in a complete and accurate manner and are subjected to an appropriate supervisory review. We also recommended the University’s procedures address all elements of the University’s financial reporting process. The University agreed with the recommendations. OTHER FINDING The remaining finding pertains to lack of adequate review of service providers’ internal controls. We will review the University’s progress towards the implementation of our recommendation in our next financial audit. AUDITOR’S OPINION The auditors stated the financial statements of the University as of and for the year ended June 30, 2023 are fairly stated in all material respects. This financial audit was conducted by Sikich LLP. 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:TLK