REPORT DIGEST

THE ILLINOIS LITERACY FOUNDATION

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  April 6, 2022

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 1 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 1 – 1

FINDINGS LAST AUDIT: 0

Category 1: Findings that are material
weaknesses in internal control and/or
a qualification on compliance with
State laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, 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

The Illinois Literacy Foundation
(Foundation) was created to promote
literacy among the residents of the
State of Illinois by supporting
literacy programs and enhancing
Statewide literacy awareness, to make
grants and gifts in aid and support of
the goal, and to engage generally in
other lawful endeavors consistent with
the foregoing purposes.

This digest covers the financial
statement audit of the Foundation as
of and for the two years ended June
30, 2021. The Foundation’s compliance
examination covering the two years
ended June 30, 2021 will be released
under a separate cover.

SYNOPSIS

• (21-01) The Illinois Literacy
Foundation did not maintain accurate
inventory records for the years ended
June 30, 2020 and June 30, 2021.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INACCURATE INVENTORY RECOREDS

The Illinois Literacy Foundation
(Foundation) did not maintain accurate
inventory records for the years ended
June 30, 2020 and June 30, 2021.

During our testing of inventory, the
Foundation was unable to provide
inventory records to support the
number of books accepted for Fiscal
Year 2020. Foundation management
stated no books were accepted in
Fiscal Year 2021.

The Foundation provided a listing of
the number of books that were
distributed to each school For Fiscal
Year 2021. The Foundation could not
provide the distribution listing for
Fiscal Year 2020. During our testing
over the distribution listings
provided by the Foundation, we were
unable to verify to the amounts that
were recorded on the financial
statements as inventory expense for
Fiscal Year 2020. There was no
distribution listing for Fiscal Year
ending June 30, 2020; therefore, we
were unable to recalculate the total
value distributed for Fiscal Year
2020.

The Foundation utilized AbeBooks.com
to value its inventory at the
beginning of Fiscal Year 2018. The
Foundation selected a sample of 50
books from each category to determine
the average price per type of book.
The Foundation carried forward the
averages obtained from AbeBooks.com
for the remainder of the engagement
period. In the prior engagement
period, the auditors selected a sample
of inventory to test the Foundation’s
inventory pricing. The Foundation did
not preserve documentation of its
initial pricing exercise and the
auditors noted multiple inventory
pricing difference during their
testing. It was noted that the cost
difference could not be extrapolated
over the entire inventory population
to determine the material effect on
the financial statements. During the
current engagement period, the
Foundation indicated that there was no
change from the prior engagement and
the Foundation has no documentation to
support the initial pricing of its
inventory. Based upon this, Sikich was
unable to verify the pricing of the
Foundation’s inventory (Finding 1,
pages 19-20).

We recommended the Foundation strongly
emphasize the importance of
maintaining accurate inventory records
throughout the year. We also
recommended training and ongoing
education be provided to all employees
involved in the inventory process.

Foundation officials concurred with
our recommendation.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Foundation as of and
for the years ended June 30, 2020, and
June 30, 2021, are fairly stated in
all material respects.

This financial audit was conducted by
Sikich, LLP.

JANE CLARK
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

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