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REPORT DIGEST ILLINOIS STUDENT ASSISTANCE COMMISSION FINANCIAL
AUDIT AND COMPLIANCE EXAMINATION For the Year Ended: June 30, 2007 Summary of
Findings: Total this audit 9 Total last audit 7 Repeated from last audit 3
Release Date: April 30, 2008
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 http://www.auditor.illinois.gov |
INTRODUCTION
This report digest covers both the Financial Audit and the State Compliance Examination of the Illinois Student Assistance Commission for the year ended June 30, 2007. The Financial Audit Report contains four findings (numbers 1-4). The State Compliance Report contains five findings (numbers 7-11). SYNOPSIS
¨ The Illinois Student Assistance Commission (Commission) did not have sufficient controls over the financial reporting process of the Illinois Designated Account Purchase Program or the Illinois Prepaid Tuition Program. ¨ The Commission was late in filing quarterly reports for locally held funds with the Illinois Office of the Comptroller. ¨ The Commission was delinquent in reporting required revenue bond activity to the Illinois Office of the Comptroller.
{Expenditures and Activity Measures are summarized on the reverse page.} |
ILLINOIS
STUDENT ASSISTANCE COMMISSION
FINANCIAL
AUDIT AND COMPLIANCE EXAMINATION
For The Year Ended June 30, 2007 (In Thousands)
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EXPENDITURE STATISTICS |
FY 2007 |
FY 2006 |
FY 2005 |
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·
Total Expenditures (All Appropriated Funds)................................................ OPERATIONS
TOTAL................................... % of Total Expenditures............................. Personal Services........................................ % of Operations Expenditures............... Other
Payroll Costs (FICA, Retirement)..... % of Operations Expenditures............... Contractual Services.................................... % of Operations Expenditures............... Telecommunications..................................... % of Operations Expenditures............... Lump Sums................................................. % of Operations Expenditures............... All Other Operations Items.......................... % of Operations Expenditures............... AWARDS
& GRANTS TOTAL...................... % of Total Expenditures..............................
Grant Awards to Eligible Students................ % of Awards and Grants...................... Federal Guarantee Distributions................... % of Awards and Grants...................... All Other Grants and Awards...................... % of Awards and Grants...................... · Net Cost of Property and Equipment..... |
$682,702,890
$45,520,183 6.7% $15,056,423 33.1% $6,773,259 14.9% $7,348,227 16.1% $566,009 1.2% $15,369,479 33.8% $406,786 0.9% $637,182,707 93.3% $354,259,525 55.6% $179,771,154 28.2% $103,152,028 16.2% $14,182,000 |
$593,316,928
$36,960,061 6.2% $16,306,231 44.1% $6,958,439 18.8% $8,367,276 22.6% $509,526 1.4% $4,425,410 12.0% $393,179 1.1% $556,356,867 93.8% $345,770,562 62.1% $164,041,982 29.5% $46,544,323 8.4% $14,766,000 |
$560,715,797
$38,821,071 6.9% $16,079,432 41.4% $7,386,992 19.0% $9,231,575 23.8% $688,023 1.8% $4,739,883 12.2% $695,166 1.8% $521,894,726 93.1% $330,838,777 63.4% $142,428,538 27.3% $48,627,411 9.3% $15,238,000 |
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SELECTED ACTIVITY MEASURES |
FY 2007 |
FY 2006 |
FY 2005 |
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Total Receipts
per Comptroller (All Funds).. ·
Expenditures of
Federal Awards.................. ·
Average Number of
Employees................... ·
Number Students
Receiving MAP Award*.. ·
Number of Loans
Guaranteed*.................... * Unaudited |
$388,171,000 $295,928,000 501 146,635 199,272 |
$323,124,000 $276,103,000 519 146,853 222,981 |
$297,736,000 $221,596,000 532 150,311 227,896 |
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AGENCY DIRECTOR(S) |
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Insufficient controls Noted disclosures were not properly
calculated Commission officials agree with auditors Insufficient controls
Numerous errors Assets were misstated by $1.1 million Investment disclosures pertaining to $77
million were not included
$3.1 million arbitrage liability
under-recorded
Incorrect interest rate on variable rate
debt results in $5.6 million understatement
Commission
officials agree with auditors Locally held funds
reports filed late
Final report was
156 days late Commission
officials agree with auditors 12% of bond notices
were delinquent
Commission officials
agree with auditors |
INTRODUCTION
The Illinois Student Assistance Commission (Commission) was created to establish and administer a system of financial assistance through loan guarantees, scholarships, grant awards and a prepaid tuition program for residents of the State of Illinois to enable them to attend qualified public or private institutions of their choice. FINDINGS, CONCLUSIONS ANDRECOMMENDATIONS
CONTROLS OVER FINANCIAL REPORTING OF THE
ILLINOIS PREPAID TUITION PROGRAM NEED IMPROVEMENT The Illinois Student Assistance
Commission (Commission) does not have sufficient controls over the financial
reporting process of the Illinois Prepaid Tuition Program. During our review of the draft financial
statements of the Illinois Prepaid Tuition Program (the Program), we noted
the disclosures related to the multiple ratings of securities were not
properly calculated by the Commission. These disclosures were subsequently
corrected and are properly disclosed on the final financial statements. The
Program’s investments subject to these disclosures totaled approximately $994
million. The
Commission stated that they rely on their contractual investment advisor to
prepare this information. (Financial Report: Finding 1, page 76). Commission officials agreed with our recommendation to strengthen internal controls over financial reporting and stated it would implement quality control procedures.
CONTROLS
OVER FINANCIAL REPORTING OF THE DESIGNATED ACCOUNT PURCHASE PROGRAM NEED
IMPROVEMENT The Commission does not have sufficient
controls over the financial reporting process of the Illinois Designated
Account Purchase Program. Numerous errors/adjustments were
identified during the audit of the Illinois Designated Account Purchase
Program (IDAPP) and review of underlying records. Some of the more
significant adjustments/errors were as follows:
3
Restricted net assets were understated by
approximately $1.1 million, and unrestricted net assets were overstated by
the same amount.
3
Supplementary schedules of outstanding debt
did not agree to the financial statements or footnotes.
3
Investment disclosures pertaining to $77
million in money market accounts were not included in the footnotes.
Commission officials stated IDAPP went
through a major re-organization of personnel, including senior level
management and also underwent a major restructuring of its student loan
portfolio. This contributed to delays and inaccuracies in the preparation and
reporting of financial statements.
(Financial Report: Finding 3,
pages 78-79) We recommended that the Commission
improve controls over financial reporting to ensure accurate presentation and
disclosure in its financial statements.
Commission officials agreed with our
recommendation and stated that it would ensure that processes and procedures
are put in place to improve internal controls and prevent delays and
inaccuracies in the financial reporting process. DELINQUENT FILING OF
QUARTERLY RECEIPTS AND DISBURSEMENTS OF LOCALLY HELD FUNDS The Commission was late in filing
quarterly accounting reports of receipts and disbursements for locally held
funds with the Illinois Office of the Comptroller. During
our testing, we noted that 3 of the 4 required quarterly form C-17 reports
were delinquent. The reports were
ranged from 17 to 49 days late. The fourth quarter filing, due July 31, 2007
was initially filed 49 days late and was subsequently amended twice. The
final report was filed 156 days after it was due. (Compliance Report:
Finding 8, page 9). Commission officials
agreed with our recommendation to work with its external business partners to
accelerate monthly reporting of locally held fund activity so that the form
C-17 reports can be filed timely as required. NEED TO IMPROVE
REVENUE BOND REPORTING The Commission was delinquent in reporting required revenue bond activity to the
Illinois Office of the Comptroller for the year ended June 30, 2007. During our review of the quarterly
reports of delinquent revenue bond reporting prepared by the Illinois Office
of the Comptroller, we noted that 37 out of the 312 (12%) required C-08
forms, “Notice of Payment of Bond Interest and/or Principal” to be reported
to the Comptroller’s Office were delinquent for the fiscal year ended June
30, 2007. (Compliance Report: Finding
9, page 10). Commission officials agreed with our
recommendation to work with its trustees to ensure all required revenue bond
reporting to the Comptroller’s Office is completed on a timely basis. OTHER FINDINGS Other findings are reportedly being given attention by Commission management. We will review progress toward implementation of our recommendations in our next financial audit and compliance examination. AUDITORS’ OPINION Our auditors stated the June 30, 2007 financial statements of the Illinois Student Assistance Commission are fairly presented in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp AUDITORS ASSIGNED
McGladrey & Pullen, LLP were our special assistant auditors for this engagement. |