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REPORT DIGEST ILLINOIS STATE UNIVERSITY FOUNDATION FINANCIAL
AUDIT For the Year Ended: June 30, 2004 COMPLIANCE EXAMINATIONFor the Two Years Ended June 30, 2004 Summary of Findings: Total this audit 2 Total last audit 3 Repeated from last audit 1 Release Date:
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 Foundation did not submit the annual Fiscal Control and Internal Audit Act Certification to the Auditor General by May 1, 2004. · The Foundation and University Athletic Department did not properly control pre-numbered raffle tickets.
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ILLINOIS STATE
UNIVERSITY FOUNDATION
FINANCIAL AUDIT
For the Year Ended June 30, 2004
COMPLIANCE EXAMINATION
For the Two Years Ended June 30,
2004
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FINANCIAL OPERATIONS (ALL FUNDS) |
FY2004 |
FY2003 |
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OPERATING REVENUES |
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Service contract with University..................................... |
$260,000 |
$260,000 |
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Other Operating Revenues............................................. |
68,808 |
53,636 |
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Total Operating Revenues......................................... |
328,808 |
313,636 |
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OPERATING EXPENSES |
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Student Aid, scholarships and awards............................ |
$1,373,482 |
$1,231,391 |
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Expenditures on behalf of ISU departments and programs |
2,753,526 |
2,496,724 |
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Other Operating Expenses............................................. |
775,324 |
839,926 |
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Total Operating Expenses.......................................... |
4,902,332 |
4,568,041 |
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Operating loss......................................................... |
($4,573,524) |
($4,254,405) |
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NONOPERATING REVENUES (EXPENSES) |
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Contributions – gifts and donations................................ |
$8,891,957 |
$4,961,793 |
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Interest on capital related debt....................................... |
(43,208) |
(43,090) |
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Investment income (loss)............................................... |
5,918,503 |
905,048 |
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Expenditures for ISU capital projects............................. |
(3,845,997) |
(693,267) |
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Other............................................................................ |
757,354 |
617,799 |
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Net nonoperating revenues...................................... |
$11,678,609 |
$5,748,283 |
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Income before additions to permanent endowments....... |
$7,105,085 |
$1,493,878 |
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Additions to permanent endowments............................. |
$4,856,118 |
$3,931,270 |
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Increase in net assets............................................... |
$11,961,203 |
$5,425,148 |
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NET ASSETS |
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Net Assets-beginning of year ........................................ |
$54,065,362 |
$48,640,214 |
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Net Assets-end of year................................................. |
$66,026,565 |
$54,065,362 |
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OTHER SIGNIFICANT
ACCOUNT BALANCES |
AT JUNE 30, 2004 |
AT JUNE 30, 2003 |
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Cash and Investments........................................................ |
$57,304,228 |
$47,571,298 |
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Total Assets.................................................................... |
$68,397,163 |
$55,540,274 |
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Long-Term liabilities........................................................... |
$1,187,741 |
$1,221,570 |
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Total Liabilities............................................................... |
$2,370,598 |
$1,474,912 |
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Net Assets – Restricted-Nonexpendable............................ |
$38,426,543 |
$28,525,765 |
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Net Assets – Restricted-Expendable.................................. |
$26,150,982 |
$24,405,518 |
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Total Net Assets............................................................. |
$66,026,565 |
$54,065,362 |
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MANAGING DIRECTOR
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During Audit Period: Dr. Susan Kern |
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Currently: Dr. Susan Kern |
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Late submission of Fiscal Control and Internal Audit Act Certification to the Auditor General Individuals selling raffle tickets were not required to return unsold
tickets |
INTRODUCTION Our report covers the financial audit of the Illinois State University Foundation for the fiscal year ended June 30, 2004 and a compliance examination for the two years ended June 30, 2004. FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
CERTIFICATION OF INTERNAL CONTROLS NOT SUBMITTED ON TIME The Foundation did not submit the annual
Fiscal Control and Internal Audit Act Certification to the Auditor General by
May 1, 2004. The Foundation submitted
the annual Fiscal Control and Internal Audit Act Certification to the Auditor
General on June 3, 2004.
The Fiscal Control and Internal Auditing Act (30 ILCS 10/3003)
requires the chief executive officer of all State agencies to prepare a
certification stating whether the systems of internal controls comply with
requirements of the Act and submit the certification to the Auditor General
by May 1st of each
year. (Finding 1, page 8)
The Foundation stated the failure to submit the certification by May 1st was due to oversight. We recommended the Foundation comply with the Fiscal Control and Internal Auditing Act and submit the certification by May 1st. Foundation officials agreed with our recommendation and stated they will submit the annual certification by May 1st. NEED TO IMPROVE CONTROLS OVER RAFFLE TICKETS The Foundation and University Athletic Department did not properly control pre-numbered raffle tickets. The proceeds of the raffle went to the Foundation. During our testing we noted the Athletic Department held a raffle to benefit athletics during both fiscal year 2004 and 2003. Approximately 30,000 tickets were distributed for sale for each of the fiscal years 2004 and 2003. The individuals selling the tickets were not required to return unsold tickets. The estimated value of unsold tickets is $101,000 and $107,000. The events generated $49,269 and $42,659 of revenue for the Foundation in fiscal years 2004 and 2003, respectively. Failure to
adequately control raffle tickets and receipts does not promote accountability.
(Finding 2, page 9) This finding was first reported in 1998. The Foundation indicated that the Athletic Department does not have a system for accounting for unsold tickets. We recommended that the Foundation work with the Athletic Department to develop and implement procedures to track pre-numbered raffle tickets. We also recommended the Athletic Department account for all unsold tickets to ensure all funds raised have been properly turned over to the Foundation. Foundation officials agreed with our recommendation and stated they will work with the Athletic Department to develop and implement procedures to track pre-numbered raffle tickets including a reconciliation of funds received and unsold tickets. (For previous University response, see Digest Footnote) Ms. Ronda Queen, financial coordinator, provided Foundation responses in correspondence dated February 8, 2005. AUDITORS' OPINION Our auditors state the financial
statements of the Illinois State University Foundation as of June 30, 2004,
and for the year then ended, are fairly presented in all material
respects. _____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:CML:pp SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this engagement were Clifton Gunderson LLP. DIGEST FOOTNOTE
LACK OF CONTROLS OVER PRE-NUMBERED RAFFLE TICKETS – Previous
Foundation Response
2002: Accepted. The Foundation will work with the University Athletic department personnel to formalize written procedures for handling raffle ticket sales. The procedures will include an accounting of all pre-numbered tickets and funds collected. |