REPORT DIGEST

ILLINOIS MATH &

SCIENCE ACADEMY

FINANCIAL AUDIT AND COMPLIANCE

EXAMINATION

For the Year Ended:

June 30, 2005

Summary of Findings:

Total this audit 7

Total last audit 0

Repeated from last audit 0

Release Date:

March 2, 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

http://www.state.il.us/auditor

SYNOPSIS

· The Illinois Mathematics and Science Academy made payments for efficiency initiative billings from improper line item appropriations.

· The Academy failed to implement provisions of the State Officials and Employees Ethics Act which requires State employees to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour.

· The Academy did not process contractual agreements in accordance with established procedures. Contractual agreements tested did not contain required clauses and certifications.

· The Academy failed to implement the provisions

of the State Officials and Employees Ethics Act relating to ethics training.

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

ILLINOIS MATHEMATICS AND SCIENCE ACADEMY

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

For The Year Ended June 30, 2005

STATEMENT OF ACTIVITIES			FY 2005	FY 2004
REVENUES AND OTHER SOURCES Changes For Services............................................... Operating Grant Revenue......................................... Interest/Investment Income....................................... State Appropriations................................................ Other Sources.......................................................... TOTAL REVENUES AND SOURCES.............. EXPENDITURES Education................................................................. TOTAL EXPENDITURES.................................. CHANGES IN NET ASSETS............................			$2,790,837 5,208,097 20,434 15,832,900 159,683 $24,011,951 $23,562,506 $23,562,506 $ 449,445	$7,956,711 5,673,129 10,898 14,359,200 2,415 $28,002,353 $28,288,010 $28,288,010 ($285,657)
SELECTED ACCOUNTS – STATEMENT OF NET ASSETS			FY 2005	FY 2004
Assets: Cash and Cash Equivalents............................................. Receivables, Net............................................................ Capital Assets, Net........................................................ Liabilities: Accounts Payable/Accrued Liabilities.............................. Deferred Revenues......................................................... Compensated Absences (Short Term)............................ Compensated Absences (Long Term)............................. Net Assets...........................................................................			$2,770,919 55,451 25,573,246 $1,455,710 394,625 78,275 782,000 $27,111,966	$3,499,994 98,600 26,122,894 $1,626,782 1,938,543 181,380 706,000 $26,775,555
SUPPLEMENTARY INFORMATION (unaudited)			FY 2005	FY 2004
Average Number of Employees...................................... Average Number of Students.......................................... Instructional Cost Per Student.........................................			218 626 $6,175	242 620 $6,150
ACADEMY PRESIDENT
During Audit Period: Stephanie P. Marshall, Ph.D.
Currently: Stephanie P. Marshall Ph.D.
	The Academy made payments from where there were available funds, not from line item appropriations where the savings were anticipated to occur Noncompliance with State Officials and Employees Ethics Act Most employees do not submit timesheets	FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS EFFICIENCY INITIATIVE PAYMENTS The Illinois Mathematics and Science Academy made payments for efficiency initiative billings from improper line item appropriations. Public Act 93-0025, in part, outlines a program for efficiency initiatives to reorganize, restructure and reengineer the business processes of the State. The Academy received one billing in FY05 for $767.09 from the Department of Central Management Services for savings from procurement efficiency initiatives. Academy staff contacted CMS and received a detailed statement of where savings to the Academy were anticipated to occur (printing and household supplies). Academy staff reported it was not aware of any savings from these efficiency initiatives. The Academy made the payments for these billings not from line item appropriations where the cost savings were anticipated to have occurred but from line items where Academy staff reported there were available funds (travel). (Finding 1, pages 11-12) We recommended the Academy only make payments for efficiency initiative billings from line item appropriations where savings would be anticipated to occur. The Academy’s response stated that the invoice was processed as advised orally by a CMS staff member. However, the Academy is aware that it is responsible for knowing the requirements of the State Finance Act and will comply with those procedures for efficiency initiative payments in the future. INADEQUATE TIMEKEEPING POLICIES The Academy failed to implement the provisions of the State Officials and Employees Ethics Act, Article 5, which requires State employees to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour. Approximately 35 part-time employees not receiving a salary, hourly employees and personnel paid from grant monies submit timesheets. All other employees (approximately 183)

47% of contractual agreements tested did not contain required clauses and certifications

Employees did not receive ethics training within 6 months of employment nor on an annual basis

report only when they are absent from work so that Human Resources can document the use of vacation and/or sick time. (Finding 4, page 16)

We recommended the Academy implement policies of the State Officials and Employees Ethics Act to ensure each employee periodically submits time sheets. The Academy responded that it will require all of its employees to document time worked on State business and will implement a policy to ensure compliance.

INADEQUATE CONTRACTING PROCEDURES

The Academy did not process contractual agreements in accordance with established procedures.

Nine of nineteen (47%) contractual agreements tested did not contain required clauses and certifications, including certifications for Procurement of Domestic Products, Noncompliance with Environmental Protection Act, Collect and Remit Illinois Use Tax, Drug-Free Workplace, and Conflict of Interest disclosures. In addition, payments were made for services rendered before two contracts were signed.

One of these payments was for travel expenditures in the amount of $482 incurred 79 days prior to the signature of the State Purchasing Official at the Academy. On the other

contract, $5,705 was paid for services rendered beginning 25 days before the State Purchasing Official of the Academy signed the contract. (Finding 6, pages 18-19)

We recommended the Academy review its contracting policies and procedures to ensure compliance. The Academy’s response stated that it will update its contracting policies and procedures to ensure compliance.

LACK OF ETHICS TRAINING

The Academy failed to implement the provisions of the State Officials and Employees Ethics Act. (the Act), Ethical Conduct Article.

Employees of the Academy have not received ethics training within 6 months of employment nor on an annual basis. Article 5 of the Act, Ethical Conduct, states that each officer, member, and employee must complete, at least annually beginning in 2004, an ethics training program conducted by the appropriate State agency. A person employed in a position that requires training must complete initial ethics training within 6 months after commencement of employment. (Finding 7, page 20)

We recommended the Academy implement the Ethical Conduct Article of the Act. The Academy’s response stated it will implement the mandate and provide ethics training to its employees.

OTHER FINDINGS

Other findings dealt with an improper vacation payout, untimely fund transfers, and performance evaluations. We will review the Academy’s progress toward implementation of all our recommendation, in our next audit.

AUDITORS’ OPINION

Our auditors stated that the financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the major fund, and the aggregate remaining fund information of the Illinois Mathematics and Science Academy, of June 30, 2005 and June 30, 2004, and the respective changes in financial position thereof for the years then ended.

__________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KMC:drh

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were De Raimo Hillger & Ripp.

SYNOPSIS

ACADEMY PRESIDENT

LACK OF ETHICS TRAINING