REPORT DIGEST GOVERNORS STATE UNIVERSITY Single Audit and Compliance Examination For the Year Ended June 30, 2014 Release Date: February 26, 2015 FINDINGS THIS AUDIT: 6 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 3 -- 3 -- 6 Category 3: 3 -- 3 -- 6 TOTAL: 0 -- 0 -- 0 FINDINGS LAST AUDIT: 11 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 WILLIAM G. HOLLAND, 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 SYNOPSIS • (14-1) The University had inadequate procedures over the verification and updating of information submitted by students applying for subsidized financial aid. • (14-5) The University needs to improve controls over verification of information included on a job applicant’s resume or application prior to hiring. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE PROCEDURES OVER INFORMATION IN STUDENT AID APPLICATIONS Governors State University (University) did not have adequate procedures over verification and updating of information submitted by students applying for subsidized financial aid. During our detail verification testing, we noted the following: • The University’s written policies and procedures for verifying applicant’s information did not include procedures for making referrals of applicants to the Office of Inspector General of the Department of Education for investigation. • The University did not properly verify and update information submitted by students applying for financial aid to ensure accurate information was reflected on the Institutional Student Information Report (ISIR). We noted three (21%) of 14 students selected for verification had errors as follows: ? Difference on a student’s adjusted gross income of $4,910 ($11,232 per ISIR and $6,322 per supporting documentation) and income tax paid of $491 ($1,123 per ISIR and $632 per supporting documentation). The errors did not affect the total amount awarded to the student. ? Difference on a student’s income tax paid of $713 ($713 per ISIR and none per supporting documentation). The errors resulted in an overstatement of $400 in awards made to the student. ? A student’s other untaxed income of $32,130 was incorrectly posted to tax exempt interest income on the ISIR. The error did not affect the total amount awarded to the student. (Finding 1, pages 18-21). We recommended the University include in its written policies and procedures the process for making referral of applicants to the Office of Inspector General of the Department of Education for investigation. In addition, the University should enhance its procedures to ensure that information in student aid applications is properly verified and updated in accordance with federal regulations. University officials agreed with the finding and recommendation and stated they will update procedures and implement staff training. NEED TO IMPROVE CONTROLS OVER VERIFICATION OF JOB APPLICANT’S INFORMATION The University did not have adequate controls over verification of information included on a job applicant’s resume or application prior to hiring. During our testing of the University’s compliance with its policy and procedures for verification of information included on a job applicant’s resume or application, we noted five of ten employee personnel files reviewed (50%) did not have required documentation relating to the verification procedures. The University did not maintain the evidence of education credentials for one employee and did not have reference check forms for five employees. (Finding 5, pages 28-29). We recommended the University evaluate its internal control process to ensure that policy and procedures are formally documented and complied with. University officials agreed with the finding and recommendation and stated that processes have been implemented to ensure that all job applicant information is forwarded to the Human Resources Department by the hiring supervisor. OTHER FINDINGS The remaining findings are reportedly being given attention by University officials. We will review progress toward implementation of our recommendation in our next audit. AUDITOR’S OPINION The financial audit report was previously released. The auditors stated the financial statements of the Governors State University as of and for the year ended June 30, 2014, are fairly stated in all material respects. The auditors also conducted a Single Audit of the University as required by OMB Circular A-133. Our auditors stated the University complied, in all material respects, with the types of compliance requirements that could have a direct and material effect on each of the University’s major federal programs for the year ended June 30, 2014. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the University for the year ended June 30, 2014, as required by the Illinois State Auditing Act. The auditors stated the University complied, in all material respects, with the requirements described in the report. WILLIAM G. HOLLAND Auditor General WGH:JGR SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for this engagement were E.C. Ortiz & Co., LLP.