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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
NEED TO IMPROVE EQUIPMENT AND PROPERTY CONTROLS
AND RECORDS
The University's property control records did not accurately
reflect property and equipment at the University.
Several different types of exceptions were noted during our
testing of property including problems with tagging, equipment that was
missing or located in a different location in relation to the property
control records and recorded at improper values.
Inaccurate property control records result in incorrect
accounting information and could cause unnecessary equipment expenditures and
inaccurate financial reporting. (Finding 2, pages 15-16) This finding was
first reported in 2003.
We recommended that the University adhere to its procedures
to ensure that the property and equipment records are properly maintained.
University officials responded that there have been
substantial moves related to new facilities and internal reorganization in
the last few months and the University is in the process of updating all
property control records as well as changing the recording process. (For the
previous agency response, see Digest footnote #1.)
NEED TO IMPROVE CONTROLS RELATED TO COMPUTER
SECURITY
The University had not
established adequate controls over some aspects of its computer environment.
We reviewed the University’s
computer environment and noted the following weaknesses:
·
No formal computer policies or standards exist to provide staff,
faculty or students with guidance regarding security, backup, software
copyright laws, user responsibilities, and remote access.
·
Effective password controls were not uniformly applied.
The University has over five million dollars invested in
computer software and hardware. Many
of the University’s systems, such as financial aid, financial aid packaging,
purchasing, accounting and student records are critical to its daily
operations. (Finding 3, pages
17-18) This finding was first reported in 2003.
We recommended that the
University establish comprehensive policies and standards that outline
general security provisions, appropriate use of computer resources, backup
and care of data, remote access, and other appropriate policies to ensure
that effective controls exist. The
policies and procedures should be communicated to all users and monitored for
compliance. The University should
ensure appropriate password security parameters are uniformly enforced.
University officials
responded that their policies are currently in draft form and that
implementation is anticipated in fiscal year 2005. (For the previous agency
response, see Digest footnote #2.)
NEED TO TIMELY FILE ACCOUNTING REPORTS WITH THE
OFFICE OF THE STATE COMPTROLLER
The University failed to
file the Fiscal Year 2004 year end accounting reports on a timely basis with
the Office of the State Comptroller.
The University filed its
year end accounting reports prepared in accordance with generally accepted
accounting principles (GAAP Reports) 27 business days late.
By not submitting the GAAP
accounting reports on a timely basis, the University could affect the State’s
ability to timely complete the State of Illinois’ Comprehensive Annual
Financial Report. (Finding 4, Page 19)
We recommended that the
University review procedures and staffing to ensure timely reporting of the
GAAP Reporting Package to the Office of the Comptroller.
University officials
responded that there is new leadership in the Business Office and that a full
review of policies and procedures is underway.
NEED TO COMPLY WITH THE UNIVERSITY FACULTY
RESEARCH & CONSULTING ACT
The University did not comply with the University Faculty
Research and Consulting Act.
The University’s Office of the President requests that all
faculty complete a form stating whether or not they intend to perform outside
research and/or consulting services. Faculty members who intend to perform
outside research and/or consulting are required to obtain approval from the
University President prior to performing any outside services.
During our testing we examined all requests that were
submitted and noted that 13 faculty members performed outside research and/or
consulting activities prior to receiving approval from the President. The approvals were noted to be from 1 to
406 days subsequent to the date that services were to begin. In addition, one faculty member never
obtained approval for two specific consulting engagements performed. (Finding
5, page 20) This finding was first reported in 2003.
We recommended that the University ensure that faculty
members comply with the University Faculty Research and Consulting Act.
University officials stated that they will continue to
support faculty in their compliance with the Act. (For the previous agency
response, see Digest footnote #3.)
UNCOLLATERALIZED DEPOSITS
The
University maintained deposits in excess of the Federal Deposit Insurance
Coverage (FDIC) and pledged collateral.
During our audit we noted that the University’s deposits at
two financial institutions totaled $5,796,247 at June 30, 2004. The FDIC insurance plus pledged collateral
coverage for these accounts totaled $4,063,547, which left uninsured and
uncollateralized deposits of $1,732,700.
Failure to obtain collateral puts State
funds at risk in the event that the financial institution should incur
financial difficulties. (Finding 6, Page
21)
We recommended the University
obtain sufficient collateral to cover its deposit accounts.
University officials stated that
they corrected the oversight during the audit process.
OTHER FINDING
The remaining finding is less significant and is reportedly
being given attention by University officials. We will review progress toward implementation of our
recommendations in our next audit.
University responses to the findings were provided by the
Vice President for Administration & Planning, Mr. John Tuohy, in a letter
dated December 20, 2004.
AUDITORS' OPINION
Our
auditors state the University’s financial statements as of June 30, 2004 and
for the year then ended, are fairly presented in all material respects.
_____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:TLK:pp
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors
for this audit were Nykiel Carlin & Co., LTD.
DIGEST FOOTNOTES
#1 INACCURATE EQUIPMENT AND
PROPERTY CONTROL RECORDS – Previous University Response
The University agrees that improvements to the
property control record-keeping system are necessary and has already begun
implementation of a centralized plan for improvement.
#2 COMPUTER SECURITY WEAKNESSES –
Previous University Response
The University agrees that user access passwords
should be better controlled and will do so.
It will also establish more complete written policies to provide users
with guidance regarding security, backup, contingency planning, software
copyright laws, user responsibilities, and remote access.
#3 UNIVERSITY FACULTY RESEARCH
& CONSULTING – Previous University Response
The University will revise its current policies
and procedures with the object of promoting a more effective
institutional policy to ensure
compliance with the Faculty Research and Consulting Act.
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