REPORT DIGEST

ILLINOIS STATE UNIVERSITY

FINANCIAL AUDIT
For the One Year Ended June 30, 2013

Release Date:   November 14, 2013

Summary of Findings:
Total this audit: 1
Total last audit:  1
Repeated from last audit: 0

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

INTRODUCTION

This digest covers the Illinois State
University’s Financial Audit as of and for the
year ended June 30, 2013.  The Illinois State
University’s Compliance Examination (including
the Single Audit) covering the year ended June
30, 2013 will be issued at a later date.

SYNOPSIS

• The Illinois State University did not exercise
adequate internal control over the financial
reporting of investments.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NEED TO IMPROVE CONTROLS OVER THE FINANCIAL
REPORTING OF INVESTMENTS

The Illinois State University (University) did
not exercise adequate internal control over the
financial reporting of investments.

During testing, the auditors noted the
University did not adjust the University’s book
value of investments to reflect changes in each
investment’s fair market value at June 30, 2013.
As a result, the University overstated
investments and investment income by $4,947,293.
The auditors proposed an adjusting journal entry
to the University to correct this error, which
the University recorded in the financial
statements.

According to University officials, the
University did not include the premium and
discount on securities due to oversight.
(Finding 1, page 6 in the accompanying Report
Required Under Government Auditing Standards For
the Year Ended June 30, 2013)

We recommended the University review and adjust
investment balances to reflect fair market value
changes, if any, to each investment’s net
position recorded in the University’s financial
records.

University officials agreed with the finding,
indicating they will review balances and perform
reconciliations to ensure the accuracy of market
value adjustments.

AUDITORS’ OPINION

Our auditors stated the financial statements of
the Illinois State University as of and for the
year ended June 30, 2013, are fairly stated in
all material respects.

WILLIAM G. HOLLAND
Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit
were BKD, LLP.