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REPORT DIGEST COMPLIANCE
EXAMINATION (In accordance with the Single Audit Act and OMB Circular A-133) For the Year Ended: June 30, 2008
Summary of Findings: Total last audit 6 Repeated from last audit 3
Release Date: March 26, 2009
State of
Office of the Auditor General WILLIAM G.
HOLLAND
AUDITOR GENERAL
To obtain a copy of the
Report contact: Office of the Auditor
General
(217) 782-6046 or TTY (888) 261-2887 This Report Digest and Full Report are also available on the worldwide web at http://www.auditor.illinois.gov |
SYNOPSIS ¨
The University awarded student financial aid
to students attending classes at locations that had not been approved by the
United States Department of Education. ¨
The University
did not reconcile its student assistance accounts resulting in excess cash
drawn from the Department of Education for the Federal Pell Grant program,
the National Science and Mathematics Access to Retain Talent Grant program,
and the Federal Direct Student Loan program. ¨ The University’s property control records did not accurately reflect property and equipment at the University. ¨ The University maintained deposits of $1,222,815 in excess of the Federal Deposit Insurance Coverage and pledged collateral. {Financial Information is
summarized on the reverse page.}
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COMPLIANCE EXAMINATION
For
The Year Ended June 30, 2008
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INCOME FUND REVENUES AND EXPENDITURES |
FY 2008 |
FY 2007 |
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FUND BALANCE – BEGINNING OF YEAR INCOME FUND REVENUES Student fees..................................................................................................... Investment income.......................................................................................... Miscellaneous................................................................................................. Total
Income Fund Revenues...................................................................... INCOME FUND EXPENDITURES Personal services (including change in
accrued compensated absences)........................................................................................................... Medicare........................................................................................................... Contractual services....................................................................................... Travel................................................................................................................ Commodities.................................................................................................... Equipment and books..................................................................................... Telecommunications....................................................................................... Operation of vehicles..................................................................................... Awards, grants and matching funds............................................................ Permanent improvements............................................................................... Tuition and fee waivers.................................................................................. Total
Income Fund Expenditures............................................................... FUND BALANCE – END OF
YEAR
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$6,309,652 $21,243,860 636,360 100,213 $21,980,433 $11,728,008 1,016,941 2,654,599 302,666 367,391 399,669 188,815 49,829 50,980 1,554,526 1,191,343 $19,504,767 $8,785,318 |
$3,190,925 $18,548,070 823,761 131,800 $19,503,631 $7,915,080 946,167 2,742,727 295,434 471,983 987,043 664,391 53,230 50,570 1,221,520 1,036,759 $16,384,904 $6,309,652 |
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SUPPLEMENTARY INFORMATION (Unaudited) |
FY 2008 |
FY 2007 |
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Employment Statistics (Full Time Equivalent - Average
Number) Appropriated funds: Faculty/administrative/other professional............................................... Civil service.................................................................................................. Graduate assistants and Student employees.......................................... Nonappropriated funds: Faculty/administrative................................................................................ Civil service.................................................................................................. Student employees...................................................................................... Total Employees.................................................................................... |
327.4 189.5 32.3 169.8 96.2 35.1 850.3 |
389.3 185.6 30.8 136.1 84.9 40.8 867.5 |
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Selected Activity Measures Annual
full-time equivalent students – undergraduate.................... Annual full-time equivalent students – graduate............................ |
1,979 2,338 |
2,094 2,089 |
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UNIVERSITY
PRESIDENT |
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During Audit Period and Current: Dr. Elaine Maimon |
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The University was unable to provide the
auditors with a list of students receiving financial aid at this offsite
location
Excess cash draw
down
No evidence that
the University reconciled its student financial aid programs
Excess cash of
$4,000 held by the University subsequent to the award reversals for the SMART
program
Excess cash held by
the University for the FDSL program of $13,407
Property tags were
missing
Items costing
$14,879 could not be located
Items were recorded
in the wrong period
Uninsured and
uncollateralized deposits totaled $1,222,815 at June 30th |
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS STUDENT FINANCIAL AID AWARDED TO STUDENTS AT UNAPPROVED LOCATIONS The University awarded student financial aid to students attending classes at locations that had not been approved by the United States Department of Education. Our testing of the United States Department of Education Institutional Participation and Oversight Service, Eligibility and Certification Approval Report disclosed that 1 out of 28 offsite locations, where the University provides education courses was not approved prior to providing services at these locations. The University was unable to provide us with a list of students receiving financial aid at this offsite location that offered 50% or more of an education program. Failure to properly get locations approved by the Department
of Education may jeopardize future federal funding. (Finding 1, Page 16) We recommended the University seek approval from the Department of Education for any locations where educational programs are offered, prior to offering classes at these locations. University officials agreed with the finding and recommendation and stated that they have refined their current process to ensure that permission is obtained prior to offering classes at offsite locations. RECONCILIATION OF STUDENT ASSISTANCE PROGRAMS The University did not
reconcile its student assistance accounts resulting in excess cash drawn from
the Department of Education for the Federal Pell Grant (PELL) program, the
National Science and Mathematics Access to Retain Talent (SMART) Grant
program, and the Federal Direct Student Loan (FDSL) program. We tested the University’s
cash management of major Federal programs and noted the following: · The University was unable to provide us with evidence of having reconciled its student financial aid programs fiscal and program records on a monthly basis.
·
For the Pell grant program, we noted the University requested and
received $2,638,007 in reimbursements from the Department of Education for
the 2008 program year. However, the
University only incurred expenses of $2,637,889, leaving excess cash held by
the University of $118.
·
For the SMART program, we noted that the University requested and
received $40,000 in reimbursements from the Department of Education for the
fiscal year 2008 program. The
University’s net award of $36,000 resulted in excess cash held by the
University of $4,000. The excess cash
was returned to the Department of Education on July 17, 2008. The excess cash was a result of two
students who were subsequently determined to be ineligible, and whose awards
were reversed. The University held the
excess cash for 132 to 140 days subsequent to the award reversals.
·
For the FDSL program, we noted that the University requested and
received $22,406,119 in reimbursements from the Department of Education for
the 2008 program year. The University
disbursed loans in the amount of $22,392,712 leaving excess cash held by the
University of $13,407.
Improper cash management
may jeopardize future federal funding and may lead to errors on the
University’s financial statements. (Finding 2, Pages 17-18) We recommended the University
improve its cash management controls over the drawdown of Federal funds and
perform the required monthly reconciliations of program and fiscal records. University officials agreed
with the finding and stated that they have implemented a cross departmental
reconciliation procedure. INADEQUATE CONTROLS OVER UNIVERSITY PROPERTY AND EQUIPMENT The University’s
property control records did not accurately reflect property and equipment at
the University. In performing our tests of
University equipment, we found exceptions with several of the items that we
sampled. Some of the exceptions noted
follow:
·
Three items with a cost of $7,417 were assigned a tag number and were
included on the property listing but they had no tag affixed.
·
Ten items with a cost of $14,879 could not be located by the
University.
·
Two items were recorded on the property control records at a zero
value.
·
Two items with a cost of $22,112 were recorded in the wrong
period.
·
One item was
not recorded at the correct value.
This item was recorded at $5,390 and should have been recorded at
$28,917. (Finding 4, Pages 20-21)
This finding was first reported in 2003. We recommended that the
University adhere to its procedures and ensure that the property and
equipment records are properly maintained. 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 #1.) UNCOLLATERALIZED
DEPOSIT ACCOUNTS The University maintained deposits of $1,222,815 in excess of the Federal Deposit Insurance Coverage (FDIC) and pledged collateral. The University’s deposits (bank balances) at a single financial institution totaled $2,893,263 at June 30, 2008. FDIC plus pledged collateral coverage totaled $1,670,448, which left uninsured deposits of $1,222,815. The State Officers and Employees Money Disposition Act (30 ILCS 230/2c) required State agencies to obtain appropriate collateral whenever funds deposited exceed the $100,000 Federal Deposit Insurance Coverage. Failure to obtain collateral puts State funds at risk in the event that the financial institution should incur financial difficulties (Finding 6, Page 23)
We recommended that the University obtain sufficient collateral to meet the statutory requirements. University officials agreed with the finding and stated that once this situation was brought to their attention, the University contacted the bank and required the bank to pledge additional collateral to secure the University and component unit deposits. The University states they have implemented a procedure which requires the bank to submit a collateralization report monthly to the University for review.
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, 2008 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 Clifton Gunderson LLP. DIGEST FOOTNOTES #1 Inadequate The University agrees
with this finding and accepts the recommendation. The University will continue to improve its
property control system and reporting procedures. |