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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
FAILURE TO RECONCILE CERTAIN ACCOUNTS WHEN
PREPARING FINANCIAL STATEMENTS
The University prepared its financial statements without
reconciling certain accounts to its detailed records.
We identified the following accounts that required
adjustments or did not agree to the supporting documentation:
·
An adjustment to Due to Grantor of approximately
$150,000.
·
An adjustment to Building of approximately $204,000
due to an error in posting amounts from the Capital Development Board.
·
Third party accounts receivable was overstated by
$511,000 due to uncollectible amounts from the Illinois Veterans Assistance
Grant.
·
An adjustment for $108,000 was necessary to correct a
posting error for the allowance for uncollectible accounts.
Failure to reconcile account detail to the records used to
prepare the financial statements may result in financial statements that are
materially misstated. (Finding 1, Page 16)
We recommended the University ensure that all accounts are
reconciled to the financial statements in a timely manner.
University officials agreed with the finding and
recommendation and stated that they will implement processes to ensure more
timely reconciliation procedures.
OVER-AWARD OF FEDERAL PELL GRANTS
The University paid
Federal Pell Grants in excess of the limit allowed by the Department of
Education.
We selected 60 students in
our testing of financial aid and noted that 32 students were awarded a
Federal Pell Grant. Two of these
students that received a Federal Pell Grant were over-awarded. These two instances resulted in total
questioned costs of $1,263.
Failure to properly
monitor the Federal Pell Grant Award limit may jeopardize future federal
funding. (Finding 2, Page 17)
We recommended the
University properly monitor the Federal Grant award limits in order to
prevent over-awarding of Federal Financial Aid.
University officials agreed
with the finding and stated that they will continue to monitor the Federal
Pell Grant Award limits.
TIME SHEETS NOT MAINTAINED IN COMPLIANCE WITH THE
STATE OFFICIALS AND EMPLOYEES ETHICS ACT
The University is not
maintaining time sheets for its faculty in compliance with 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.
Of the 25 employees’ time
sheets that were tested, 5 of them (all faculty members) used the “negative”
timekeeping system whereby the employee is assumed to be working unless noted
otherwise. In addition, we noted one graduate assistant in our sample that
did use positive time reporting, but not in accordance with the Act. The
other 19 employees tested documented their time to the nearest quarter hour. (Finding 4, Page 19)
We recommended that the
University amend its policies to require all employees to maintain time
sheets in compliance with the Act.
University officials
acknowledged the requirements of the Act and stated that they are currently
reviewing existing time reporting requirements for faculty employees
established by federal granting agencies and others to determine whether the
requirements of the Act can be met by existing requirements.
UNIVERSITY
FACULTY RESEARCH & CONSULTING
The University did not comply with the University Faculty
Research and Consulting Act.
The University’s Office of the President requests all
faculty, who intend to perform outside research and/or consulting services,
to submit a Request for Approval form.
Faculty members who intend to perform outside research and/or
consulting are required to obtain approval from the University President or
the President’s designee before performing outside services.
During our testing we examined all requests that were
submitted and noted that 9 faculty members performed outside research and/or
consulting activities prior to receiving approval from the President. The approvals were noted to be from 4 to
69 days subsequent to the date that services were to begin. (Finding 6, Page
21) 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 as
required by statute.
University officials did not accept this finding. University officials stated that the
University has a strong monitoring process and will continue to require
faculty to comply. (For the previous agency response, see Digest footnote
#1.)
In an auditor comment,
we noted that the University Faculty Research and Consulting Act requires
faculty of the University to obtain prior written approval of the President
before performing the research and/or consulting services. The University should hold accountable any
faculty that does not comply with the Act.
FAILURE TO FILE CONTRACTS AND LEASES WITH THE
STATE COMPTROLLER
The University did not
file contracts or leases with the Illinois Office of the State Comptroller.
Our testing of 25
contractual service expenditures included 6 expenditures having written
contracts, none of which were filed with the Illinois Office of the State
Comptroller. In addition, our testing also included 2 real property leases
that also had not been filed with the Illinois Office. (Finding 8, Page 23)
We recommended that the
University implement procedures to ensure all contracts and leases over
$10,000 are filed with the Illinois Office of the State Comptroller in
accordance with State statutes and guidelines.
University officials agreed
with the finding and stated that they have implemented procedures to ensure
all contracts and leases over $10,000 are filed.
INADEQUATE CONTROLS OVER UNIVERSITY PROPERTY AND EQUIPMENT
The
University’s property control records did not accurately reflect property and
equipment at the University.
We examined 130 items of property and equipment from the
University’s records or through observation.
Some of the exceptions that we noted were as follows:
·
9 items with a cost of $9,046 were assigned tag numbers and were
included on the property listing, but they had no tag affixed.
·
16 items, with a cost of $17,521, could not be
located by the University.
·
The fourth quarter C-15 Report was filed on August 8,
2006 (8 days past the due date of July 31, 2006). (Finding 9, Page 24) This
finding was first reported in 2003.
We recommended the University adhere to
its procedures to ensure that the property and equipment records are properly
maintained and that the University adhere to the requirements of SAMS and
submit their C-15 reports to the Illinois Office of the State Comptroller on
a timely basis.
University
officials agreed with the finding and stated that they will continue to
improve its property control system and reporting procedures. (For the
previous agency response, see Digest footnote #2.)
OTHER FINDINGS
The remaining findings are reportedly being given attention
by University officials. We will
review progress toward implementation of our recommendations in our next
audit.
AUDITORS' OPINION
The
financial audit report has been previously issued. Our auditors state the
University’s financial statements as of June 30, 2006 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 UNIVERSITY FACULTY RESEARCH
& CONSULTING – Previous University Response
The University disagrees with this finding. The University has a strong monitoring
process and will continue to require faculty to comply. Occasional delays should not be considered
a failure to comply.
#2 INADEQUATE CONTROLS OVER
UNIVERSITY PROPERTY AND EQUIPMENT – Previous University Response
The University agrees with this finding and
accepts the recommendation. The
University continues to improve its property control system while ensuring
that the equipment is available to staff and students as originally intended.
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