REPORT DIGEST GOVERNORS STATE UNIVERSITY FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2018 Release Date: January 29, 2018 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 0 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 FINDINGS LAST AUDIT: 0 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 the Governors State University’s Financial Audit as of and for the year ended June 30, 2018. The Governors State University’s Compliance Examination (including the Single Audit) covering the year ended June 30, 2018 will be issued at a later date. SYNOPSIS • (18-01) The University had not established adequate internal controls over undergraduate student type classifications which are used to identify the appropriate tuition rates charged to students as required by the Governors State University Law. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER UNDERGRADUATE STUDENT TYPE CLASSIFICATIONS The University has not established adequate internal controls over undergraduate student type classifications which are used to identify the appropriate tuition rates charged to students as required by the Governors State University Law (Law). We tested the University’s internal controls over student tuition revenue for financial statement and compliance purposes. We tested 100 students who registered for classes for the Spring of 2018. Our testing identified 12 undergraduate students (12%) whose tuition rates charged were inaccurate due to inaccurate student type classifications entered in the student profile of the University’s ERP system. The student type classification is utilized by the University’s ERP system to determine the correct tuition rate based on tables entered into the system. We also noted 6 additional undergraduate students whose student type classifications were inaccurate, but it did not impact the tuition rate assessed due to timing and/or unchanged rates from the year prior. The financial error noted in our sample netted to $1,584 and resulted in a projected error of $211,905. The University has not adjusted its Fiscal Year 2018 financial statements to address this error (Finding 1, pages 64-65). We recommended the University improve its controls in order to ensure undergraduate student type classifications are properly entered (and maintained) in student profiles so tuition rates comply with the requirements of the Law. We further recommended the University verify the accuracy of the student type classification of each undergraduate student (correcting when necessary) and refund any tuition overcharges identified. The University agreed with the finding and stated they performed a review of student type classifications for all undergraduate students enrolled during the Academic Year 2017-2018 and implemented a process to periodically review student type classifications in the ERP system to ensure undergraduate student type classifications are properly entered and maintained. The University also stated they will make the necessary corrections in the ERP system and will refund overcharges identified as necessary. AUDITOR’S OPINION The auditors stated the financial statements of the Governors State University as of and for the year ended June 30, 2018 are fairly stated in all material respects. This financial audit was conducted by Borschnack, Pelletier & Co. 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:JGR