REPORT DIGEST

NORTHEASTERN ILLINOIS UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the One Year Ended:

June 30, 2008

Summary of Findings

Total this audit                  1

Total last audit                  1

Repeated from last audit   0

Release Date:

January 8, 2009

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

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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

SYNOPSIS

·        The Foundation did not properly prepare the financial statements and did not have complete and accurate disclosures in accordance with accounting principles generally accepted in the United States of America and their new investment policy.

(Expenditures and Activity Measures are summarized on the reverse page.) 

FINANCIAL OPERATIONS (ALL FUNDS)

FY 2008

FY 2007

REVENUES (Operating and Nonoperating)

    Contributions......................................................................

    Investment Income (Loss)...................................................

    University Support..............................................................

    Permanent Endowment Additions.......................................

    Other.................................................................................

          Total Revenues.............................................................

$ 390,530

   (456,111) 110,567

265,144

    67,220

$ 377,350

$ 297,352

525,923

91,296

110,553

    9,714

$ 1,034,838

EXPENSES

    Scholarships and Fellowships.........................................

    University Support.........................................................

    Institutional Support............................................................

    Fundraising.........................................................................

   Grants and awards...............................................................

         Total Expenses..............................................................

Increase (Decrease) in Net Assets..........................................

$  124,530

110,567

294,215

49,250

56,707

$ 635,269

($ 257,919)

$  111,205

91,296

203,323

81,292

53,455

$ 540,571

$ 494,267

SELECTED ACCOUNT BALANCES

(ALL FUNDS)

AT JUNE 30, 2008

AT JUNE 30, 2007

Cash and cash equivalents.......................................................

Short term investments............................................................

Receivables............................................................................

Endowments investments........................................................

Other Assets..........................................................................

Total Assets...........................................................................

Accounts payable and accrued expenses.................................

Deferred revenues..................................................................

Net Assets.............................................................................

Total Liabilities and Net Assets...............................................

$146,924

1,669,330

215,831 2,537,686     

 21,371

$ 4,591,142

$ 20,407

752,753

  3,817,982

$4,591,142

$166,389

1,981,695

227

2,663,481

 23,039

$ 4,834,831

$ 6,042

752,888

  4,075,901

$4,834,831

FOUNDATION DIRECTORS

    During Audit Period: Mr. Terry Bush (7/01/07-07/31/07), Ms. Sonia Arvanitis (7/01/07-1/15/08), Dr. Carla Knowroski (1/16/08-6/30/08)  

    Currently: Dr. Carla Knowroski

Internal controls over the preparation of financial statements needs improvement

$215,831 was misclassified as a prepaid expense instead of a receivable

An Unrealized loss in the amount of $592,516 was misclassified on the Statement of Cash Flows

Financial Statement disclosures were not updated

Foundation officials agreed with the finding

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FINANCIAL STATEMENT PREPARATION

      The Foundation did not properly prepare the financial statements and did not have complete and accurate disclosures in accordance with accounting principles generally accepted in the United States of America and their new investment policy.

      We noted the following during our audit of the financial statements provided by Foundation personnel:

·        Unremitted proceeds from the sale of investments at yearend totaling $215,831 were presented as prepaid expenses in the Statement of Net Assets instead of receivables.

·        Unrealized loss on changes in market value of investments totaling $592,516 was presented in the Statement of Cash Flows as net investment income and accordingly affected the purchase of investment amount in the Cash Flows from Investing Activities.  The unrealized loss should have been presented as a reconciling item in the Cash Flows from Operating Activities.

·        Disclosures in the notes to financial statements were not updated to reflect the changes in the Foundation’s new investment policy effective July 23, 2007. (Finding 1, Pages 24-26)

      We recommended that the Foundation review its current process for preparation and review of the annual financial statements and allocate the technical resources necessary to ensure a thorough review of the financial statements and disclosures.

      Foundation officials concurred with the recommendation.

AUDITORS' OPINION

      Our auditors state the June 30, 2008 financial statements of the Northeastern Illinois University Foundation are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:TLK:pp

SPECIAL ASSISTANT AUDITORS

      Our special assistant auditors for this audit were E.C. Ortiz & Co., LLP.