REPORT DIGEST

GOVERNORS STATE UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the Year Ended:

June 30, 2005

and

COMPLIANCE ATTESTATION EXAMINATION

For the Two Years Ended:

June 30, 2005

Summary of Findings

Total this audit                      1

Total last audit                      2

Repeated from last audit       1

Release Date:

March 1, 2006

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 is also available on

the worldwide web at

www.auditor.illinois.gov

SYNOPSIS

·     The Foundation did not have adequate controls over its cash deposits.

{Expenditures and Activity Measures are summarized on the reverse page.}

FINANCIAL OPERATIONS (ALL FUNDS)

FY 2005

FY 2004

REVENUES

            Operating revenue.................................................

EXPENSES

            Operating expenses...............................................

                  Operating loss.................................................

NONOPERATING REVENUES (EXPENSES)

            Contributions.........................................................

            Investment income ................................................

            Net non-operating revenues...................................

            Gains (losses) before other revenues, expenses,

              gains and losses...................................................

            Other revenues .....................................................

            Increase (Decrease) in net assets............................

NET ASSETS

            Net assets-beginning of year..................................

            Net assets-end of year...........................................

$146,148

$295,781

($149,633)

$167,749

   24,553

$192,302

$42,669

25,993

$68,662

$2,050,246

$2,118,908

$37,331

$242,637

($205,306)

$118,938

   57,572

$176,510

($28,796)

16,713

($12,083)

$2,062,329

$2,050,246

OTHER SIGNIFICANT ACCOUNT BALANCES

AT JUNE 30,

2005

AT JUNE 30,

2004

Cash and Investments........................................................

Capital assets....................................................................

        Total Assets...............................................................

Total Liabilities..................................................................

Net Assets

        Invested in capital assets.............................................

       Restricted Nonexpendable..........................................

       Restricted Expendable................................................

       Unrestricted................................................................

       Total Net Assets.........................................................

$ 1,012,577

1,167,851

$ 2,180,428

$61,520  

$1,167,851

667,835

322,437

    (39,215)

$2,118,908

$ 987,671

1,117,851

$ 2,105,522

$55,276  

$1,117,851

681,842

256,135

      (5,582)

$2,050,246

FOUNDATION EXECUTIVE DIRECTOR

During Audit Period: Vacant (7/01/03 to 1/31/04), Dr. James Britt (2/01/04 to 6/30/05)

Currently: Dr. James Britt

9 receipts were deposited 11 to 63 days after receipt

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER CASH

      The Foundation did not have adequate controls over its cash deposits.

      During our testing of 50 receipts, we noted that nine were not deposited timely.  The receipts, each individually less than $500, were deposited 11 to 63 days after the date of receipt.

      According to Foundation management, the receipt of incoming funds involves multiple steps that must be performed in sequence by both the Foundation and the University’s Business Office.  Foundation management states that these funds are secured at all points in time. (Finding 1, page 12) 

      We recommended the Foundation develop policies and procedures to ensure that deposits are made timely.

      Foundation management stated that the Foundation and the University are in the process of reengineering the receipt process.

AUDITORS’ OPINION

      Our auditors state the June 30, 2005 financial statements of the Governors State University Foundation 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.