REPORT DIGEST

BOARD OF HIGHER EDUCATION

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2023

Release Date:  July 16, 2024

FINDINGS THIS AUDIT: 17

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  3 -- 2 -- 5
Category 2:  5 -- 6 -- 11
Category 3:  0 -- 1 -- 1
TOTAL:  8 -- 9 -- 17

FINDINGS LAST AUDIT: 11

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(217) 782-6046 or TTY (888) 261-2887

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available on the worldwide web at
www.auditor.illinois.gov

SYNOPSIS

• (23-01) The Board’s internal controls over
its voucher processing function were not
operating effectively during the examination
period.
• (23-02) The Board’s internal controls over
its receipt processing function were not
operating effectively during the examination
period.
• (23-03) The Board did not exercise
adequate controls over the recording and
reporting of State property.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

VOUCHER PROCESSING INTERNAL CONTROLS NOT
OPERATING EFFECTIVELY

The Board of Higher Education’s (Board)
internal controls over its voucher
processing function were not operating
effectively during the examination period.

The Board implemented the Enterprise
Resource Planning System (ERP) effective
Fiscal Year 2023.

Fiscal Year 2022

Non-Payroll Expenditures:

During our testing of 25 vouchers totaling
$324,193, we noted the following:

• Two (8%) of the vouchers tested, totaling
$12,080, were not supported with the
vendors’ invoices.
• Nine (36%) of the vouchers tested,
totaling $110,682, were approved for payment
between two to 282 days late.
• Two (8%) vouchers tested, totaling
$29,311, were paid late and the Board did
not pay interest owed to the vendors,
totaling $1,736.

Awards and Grants Expenditures:

During testing of 30 awards and grants
vouchers totaling $1,483,042, we noted the
following:

• One (3%) of the vouchers tested, totaling
$23,959, had no approval from the Board or
head designee.
• Four (13%) of the vouchers tested,
totaling $305,149, were approved for payment
between 34 to 111 days late.

Fiscal Year 2023

Due to our ability to rely upon the
processing integrity of the Enterprise
Resource Planning System (ERP) operated by
the Department of Innovation and Technology
(DoIT), we were able to limit our voucher
testing at the Board to determine whether
certain key attributes were properly entered
by the Board’s staff into the ERP. In order
to determine the operating effectiveness of
the Board’s internal controls related to
voucher processing and subsequent payment of
interest, we selected a sample of key
attributes (attributes) to determine if the
attributes were properly entered into the
State’s Enterprise Resource Planning (ERP)
System based on supporting documentation.
The attributes tested were 1) vendor
information, 2) expenditure amount, 3)
object(s) of expenditure, and 4) the later
of the receipt date of the proper bill or
receipt date of the goods and/or services.

Our testing noted the following attributes
were not properly entered into the ERP
system. Therefore, the Board’s internal
controls over voucher processing were not
operating effectively.

• 14 of 140 (10%) general vouchers
• 5 of 120 (4%) awards and grants vouchers

Due to this condition, we qualified our
opinion because we determined the board had
not complied, in all material respects, with
applicable laws and regulations, including
the State uniform accounting system, in its
financial and fiscal operations.

Even given the limitations noted above, we
conducted an analysis of the Board’s
expenditures data for the fiscal year 2023
and noted the following noncompliance:

• The Board owed five vendors interest
totaling $1,009 in fiscal year 2023;
however, the Board had not approved these
vouchers for payment to the vendors.

• The Board did not timely approve 295 of
327 (90%) vouchers processed during the
examination period, totaling $10,035,537. We
noted these late vouchers were approved
between 1 and 324 days late. (Finding 1,
pages 13-16)

We recommended the Board design and maintain
internal controls to provide assurance its
data entry of key attributes into ERP is
complete and accurate. Further, we
recommended the Board approve proper bills
within 30 days of receipt and approve
vouchers for payment of interest due to
vendors. Furthermore, we recommended the
Board ensure interest due is paid to
vendors.

The Board agreed with the finding and stated
it has obtained additional training and
hired additional staff to ensure vouchers
are processed properly in the State ERP
system.

RECEIPT PROCESSING INTERNAL CONTROLS NOT
OPERATING EFFECTIVELY

The Board’s internal controls over its
receipt processing function were not
operating effectively during the examination
period.

Fiscal Year 2022

During testing of four refund receipts, we
noted one of four (25%) refund receipts
tested, totaling $15,000, did not have the
date when the receipt was received by the
Board. As such, we were unable to determine
if the Board deposited the receipts in a
timely manner.

Fiscal Year 2023

Due to our ability to rely upon the
processing integrity of the Enterprise
Resource planning system (ERP) operated by
the Department of Innovation and Technology
(DoIT), we were able to limit our receipt
testing at the Board to determine whether
certain key attributes were properly entered
by the Board’s staff into the ERP. In order
to determine the operating effectiveness of
the Board’s internal controls related to
receipt processing, we selected a sample of
key attributes (attributes) to determine if
the attributes were properly entered into
the ERP system based on supporting
documentation. The attributes tested were
(1) amount, (2) fund being deposited into,
(3) date of receipt, (4) date deposited, and
(5) SAMS Source Code.

During our testing of 28 receipts during the
year, we noted 79 of 140 (56%) attributes
were not properly entered into the ERP
system. Therefore, the Board’s internal
controls over receipt processing were not
operating effectively.

In addition, during our testing of 20 refund
receipts during the year, we noted 32 of 80
(40%) attributes were not properly entered
into the ERP system. Therefore, the Board’s
internal controls over receipt processing
were not operating effectively.

Due to this condition, we qualified our
opinion because we determined the Board had
not complied in all material respects, with
applicable laws and regulations, including
the State uniform accounting system, in its
financial and fiscal operations.

Even given the limitations noted above, we
conducted an analysis of the Board’s
receipts data for fiscal year 2023 and noted
the Board’s receipts data did not document
the date on which the payment was received
for 1180 of 1203 (98%) receipts. As such, we
were unable to determine if the Board
deposited the receipts in a timely manner.
(Finding 2, pages 17-19)

We recommended the Board design and maintain
internal controls to provide assurance that
its data entry of key attributes into ERP is
complete and accurate.

The Board agreed with the finding and stated
it has obtained additional training to
ensure vouchers are processed properly in
the state ERP system.

INADEQUATE CONTROLS OVER STATE PROPERTY

The Board of Higher Education (Board) did
not exercise controls over the recording and
reporting of State property.

During testing of C-15 Reports, annual
inventory certification, and general
vouchers, we noted the following:

• One of eight (13%) Agency Reports of State
Property (Form C-15) was not timely filed
with Office of Comptroller (Comptroller).
The report was filed 87 days late.
• The Board did not take appropriate
measures to verify the property listing
submitted to the Department of Central
Management Services (CMS) was accurate. We
noted the amounts reported on the property
listing submitted to CMS did not agree with
the December 2021 and December 2022 Form
C-15s, with discrepancies of $40,829 and
$5,102 respectively. In addition, the
December 2021 Inventory Certification Report
was submitted 89 days late to CMS.
• The detailed property records provided by
the Board did not agree with the Form C-15
report filed with the Office of Comptroller
for the fourth quarter of Fiscal Year 2023.
A difference of $38,417 was noted.
• One of Six (17%) equipment items,
purchased, totaling $2,258, the Board was
unable to provide the supporting invoice. As
a result, we were unable to determine if
asset was recorded at its proper value in
the Board’s property control records.
Some of the more significant issues noted
during testing of 56 equipment items, split
between a sample of 28 items traced from the
Board’s property listing and 28 items in
service at the Board, are as follows:
• Four of 28 (14%) equipment items selected
from the Board’s property listing, totaling
$7,085, were unable to be located.
• Twenty-two of 28 (79%) equipment items
selected at the Board were not included on
the Board’s inventory records. Twenty-one
(75%) of these items were also not included
on the annual inventory report submitted to
CMS. (Finding 3, pages 20-22)  This finding
has been reported since 2013.
We recommended the Board strengthen its
internal controls and ensure reports are
complete and filed timely. Further, we
recommended the Board maintain accurate
property control records.

The Board agreed with the finding and stated
it will strengthen its internal controls and
ensure reports are complete and filed
timely. The Board further stated it will
also maintain accurate property control
records.

OTHER FINDINGS

The remaining findings are reportedly give
attention by the Board.  We will review the
Board’s process toward the implementation of
our recommendations during the next
examination.

ACCOUNTANT’S OPINION

The accountants conducted a State compliance
examination of the Board for the two years
ended June 30, 2023, as required by the
Illinois State Auditing Act. The accountants
qualified their report on State compliance
for Findings 2023-001 through 2023-005.
Except for the noncompliance described in
those findings, the accountants stated the
Board complied, in all material respects,
with the requirements described in the
report.

This State compliance examination was
conducted by Roth & Co. LLP.


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

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