REPORT DIGEST

ILLINOIS BOARD OF HIGHER EDUCATION

FINANCIAL AND COMPLIANCE AUDIT
(In Accordance with the Single Audit Act and OMB Circular A-128)
For the Two Years Ended:
June 30, 1997

Summary of Findings:

Release Date:
July 22, 1998

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• During the audit period, the Board of Higher Education awarded 356 program-specific grants, totaling $42.6 million, to colleges and universities around the State. These grant programs play an important role in the implementation of Board policies. The Agency did improve its grant monitoring process in recent years and has implemented prior recommendations related to this function. However, greater procedural control is needed in two areas: grant evaluation reports and site visits.
  
  
  
  
  
  
  
  
  
  
  
  

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

FY 1997

FY 1996

FY 1995

• Total Expenditures (All Funds)
  
  OPERATIONS TOTAL
  % of Total Expenditures
  Personal Services
  % of Operations Expenditures
  Average No. of Employees
  Other Payroll Costs (FICA, Retirement)
  % of Operations Expenditures
  Contractual Services
  % of Operations Expenditures
  All Other Operations Items
  % of Operations Expenditures
  
  GRANTS TOTAL
  % of Total Expenditures
  Total State-Funded, General Purpose Grants
  % of Total Grants
  
  Total State-Funded, Specific Purpose Grants
  % of Total Grants
  
  Total Engineering Equipment Grants
  % of Total Grants
  
  Total Federally-Funded, Title II Grants
  % of Total Grants
  
  
• Cost of Property and Equipment

$61,718,853

$2,364,431
4%
$1,734,239
73%
32
$13,403
1%
$434,519
18%
$182,270
8%

$59,354,422
96%
$37,673,522
64%

$17,150,900
29%

$2,600,000
4%

$1,930,000
3%

$431,824

$64,439,877

$2,249,371
3%
$1,698,432
75%
34
$14,660
1%
$365,938
16%
$170,341
8%

$62,190,506
97%
$36,139,861
58%

$21,760,645
35%

$2,500,000
4%

$1,790,000
3%

$472,713

$62,743,507

$2,169,845
3%
$1,551,228
71%
35
$77,252
4%
$349,770
16%
$191,595
9%

$60,573,662
97%
$34,713,167
57%

$20,660,495
34%

$2,500,000
4%

$2,700,000
5%

$432,543

FY 1997

FY 1996

FY 1995

• General Revenue Fund
  
  
• Capital Development Fund - 141
  
  
• Higher Ed Title II Fund - 983
  
  Total
  

$0

0

1,907,953

$1,907,953

$57

501

1,817,938

$1,818,496

$151

$5,432

2,976,864

$2,982,447

During Audit Period: Dr. Richard Wagner

Currently: Dr. Keith Sanders

Board should measure relative cost/benefits of grants

Site visits could give management a perspective of the overall commitment to grant initiatives

FINDING, RECOMMENDATION AND AGENCY RESPONSE

MONITORING OF GRANTS AWARDED TO COLLEGES AND UNIVERSITIES

During the audit period, the Board of Higher Education awarded 356 program-specific grants, totaling $42.6 million, to colleges and universities around the State. These grant programs play an important role in the implementation of Board policies. The Agency did improve its grant monitoring process in recent years and has implemented prior recommendations related to this function. However, greater procedural control is needed in two areas.

• Program Evaluation Reports: There was little evidence to support the Agency's review of program evaluation reports submitted by grant recipients; further, the Agency lacked administrative procedures to describe this review process. Additionally, the reporting formats had not been standardized to simplify the reviews, nor did they always contain cost/benefit measurements. Given the importance of these grant programs, it would seem appropriate to formally measure their relative cost/benefits as part of the Agency's grant monitoring process. Such measures could then be compiled to summarize grant results Statewide.

• Grant Program Site Visits: Agency management had not documented its logic for deciding the frequency of site visits conducted around the State. For those sites which had been visited, management had no formal agenda, nor was there a standard data collection form. Agency staff were not required to summarize procedures followed or observations made during the site visits. If properly controlled, site visits could give management a greater perspective of a recipient's overall commitment to the grant initiatives. Site visits could also assist the Board in assuring that its grant resources are being used efficiently, effectively, and in compliance with laws.

We recommended the Board establish additional written procedures for grant program evaluation reports and site visits. The procedures should provide for program evaluations to be uniformly submitted, reviewed and summarized, and for site visits to be conducted uniformly. Documentation should be maintained to support the selection of sites visited and the results obtained. Also, considering the magnitude of grant operations, the Board should modify existing report formats to include cost/benefit measures. Program results, including cost/benefit details, should be made available to both Board management and to the Legislature during the annual budgetary process. (Finding 1, pages 21-23)

According to the response, the Board of Higher Education management concurred that written procedures for the review of evaluation reports can always be improved. Management stated they will review current reporting requirements to assure that all information needed for grant program administration is being collected, and they will assess the need of additional data. The Board did not concur, however, with our recommendations regarding site visits, stating that site visits are not intended to provide additional program control or accountability.

OTHER

There were no other material audit findings. Dr. Richard D. Wagner, Executive Director, provided the Agency's responses.

AUDITORS' OPINION

Our auditors state that the Illinois Board of Higher Education's financial statements as of June 30, 1996 and 1997 are fairly presented.

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:JHL:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors on this engagement were Nykiel, Carlin, Lemna & Co.