REPORT DIGEST ILLINOIS BOARD OF HIGHER EDUCATION COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2013 Release Date: March 12, 2014 Summary of Findings: Total this audit: 3 Total last audit: 2 Repeated from last audit: 1 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 • The Board failed to exercise adequate controls over the recording and reporting of State property. • The Board did not exercise adequate controls over Agency Fee Imposition reporting. • The Board needs to improve controls over personal services. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS FAILURE TO EXERCISE ADEQUATE CONTROLS OVER THE RECORDING AND REPORTING OF STATE PROPERTY The Illinois Board of Higher Education (Board) did not exercise adequate controls over the recording and reporting of State property. Some of the conditions we noted follow: • For 16 of 80 (20%) items tested, the items were located in the Board’s possession; however, the physical locations differed from the locations specified in the Board’s records. • The Board could not locate 2 of 40 (5%) items. • Records for 2 of 40 (5%) items were not included in the Board’s property records. (Finding 1, pages 9-10) We recommended the Board strengthen internal controls over the recording and reporting of State property. Specifically, the Board should ensure all equipment transactions are accurately and timely recorded on its property records and accurately reported on the quarterly C-15s. Board officials accepted our recommendation and indicated they have implemented new internal controls and made personnel changes to strengthen the recording and reporting of State property. INADEQUATE CONTROLS OVER AGENCY FEE IMPOSITION REPORTING The Board did not exercise adequate controls over its Agency Fee Imposition reporting. Some of the conditions we noted follow: • The Board did not properly report fees collected on its Fiscal Year 2013 Agency Fee Imposition Report (Report). The Board erroneously included fees totaling $109,640 in its Fiscal Year 2013 Report. However, these fees were previously reported on the Board’s Fiscal Year 2012 Report. • The Fiscal Year 2013 Report did not include all information as required, such as a list and description of fees imposed by the Board, the purpose of the fees, and the statutory or other authority for the imposition of fees. (Finding 2, pages 11-12) We recommended the Board strengthen its controls over Agency Fee Imposition reporting by ensuring that reports are filed in a timely manner and also include all required information. In addition, the Board should carefully review its Agency Fee Imposition Reports to ensure all fees collected are accurately reported. Board officials accepted our recommendation and indicated they have taken corrective action to prevent future reporting problems and delays. NEED TO IMPROVE CONTROLS OVER PERSONAL SERVICES The Board did not perform and document employee performance evaluations as required. No evaluations were performed during the examination period for 3 of 5 (60%) employees tested. Two of these employees had not received a performance evaluation since Fiscal Year 2008, and one employee had never received an evaluation. (Finding 3, pages 13-14) We recommended the Board conduct and document timely performance evaluations. Board officials accepted our recommendation and indicated a new employee evaluation policy was implemented subsequent to the examination period. AUDITOR’S OPINION We conducted a compliance examination of the Illinois Board of Higher Education as required by the Illinois State Auditing Act. The Illinois Board of Higher Education has no funds that require an audit leading to an opinion on financial statements. WILLIAM G. HOLLAND Auditor General WGH:CMD AUDITORS ASSIGNED The compliance examination was conducted by the Auditor General’s staff.