REPORT DIGEST NORTHEASTERN ILLINOIS UNIVERSITY Single Audit and State Compliance Examination For the Year Ended: June 30, 2013 Release Date: March 26, 2014 Summary of Findings this Audit Cycle: • Compliance and Single Audit: 13 • Financial Audit (previously reported 12-19-13): 1 Total findings: 14 Summary of findings from previous audit cycle: 12 Findings repeated: 6 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 SYNOPSIS • The University prepared an inaccurate Schedule of Expenditures of Federal Awards. • The University’s annual performance report for the TRIO Program incorrectly reported participant data. • The University’s major systems were not reviewed by internal audit in the required timeframe. • Required background checks were not conducted prior to employment for individuals listed in security sensitive positions. • The University had inadequate policies in place to obtain and retain signed statements acknowledging that employees understand the reporting requirements under the Abuse and Neglected Child Reporting Act. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS IMPROVEMENTS NEEDED IN PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS The University did not prepare an accurate Schedule of Expenditures of Federal Awards (SEFA). The University provided the auditors its “final” SEFA on October 2, 2013. Subsequent to this date, the following misstatements were discovered: • The University failed to identify the Department of Health and Human Services Cancer Centers Support Grants program as a Federally funded program and include the related $131,761 in expenditures in the SEFA provided to the auditors. These program expenditures were subsequently reflected in the SEFA. • The University erroneously included $584,360 of Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) program expenditures in the current fiscal year that related to the prior fiscal year. (Finding 2, Pages 19-20) We recommended the University improve its controls over financial reporting so that it can prepare an accurate SEFA. University officials agreed with the finding and recommendation. TRIO REPORTING INACCURACIES The University did not accurately report on the participants of the TRIO program cluster in the program’s annual performance report. In our testing of performance data reported for 42 TRIO program participants we noted: • Four participants indicating an incorrect college grade level at entry into the program. • One participant indicating an incorrect college grade level at the end of the academic year. • One participant indicating an incorrect first enrollment date. • One participant indicating an incorrect eligibility classification. • One participant indicating an incorrect participant status reported. (Finding 7, Pages 28-29). We recommended the University review its procedures to ensure that the program information is being accurately reported. University officials agreed with the finding and recommendation. UNTIMELY COMPLETION OF INTERNAL AUDITS The University internal audit program did not review all major systems within the required time frame. We noted that the University had not audited all major systems of internal accounting and administrative control within the required two year timeframe. Specifically, we noted the following audits had not been performed during the prior two fiscal years ending June 30, 2013: • Cash and tuition fee receipts – The most recent audit was performed on transactions occurring prior to June 30, 2011. The report related to the testing was issued in September 2011. • Grants and contracts – The most recent audit was performed on contracts entered into prior to June 30, 2011. The report related to the testing was issued in August 2011. (Finding 9, Page 32) We recommended the University comply with the Fiscal Control and Internal Auditing Act by ensuring the timely performance of audits over all major systems. University officials agreed with the finding and recommendation. INADEQUATE CONTROLS OVER BACKGROUND CHECKS The University did not have adequate controls in place for required background checks to be conducted prior to employment for those employees listed in security sensitive positions. We selected 15 employees listed in security sensitive positions and noted that background checks were not completed prior to employment for 8 of the 15 employees. (Finding 12, Page 35) We recommended the University review its internal policies and procedures regarding the timely completion of background checks and complete all required background checks in accordance with the Campus Security Enhancement Act of 2008. University officials agreed with the finding and recommendation. IMPROVEMENTS NEEDED TO COMPLY WITH THE ABUSED AND NEGLECTED CHILD REPORTING ACT The University did not have adequate policies in place to obtain and retain signed statements to acknowledge that employees understand the reporting requirements under the Abused and Neglected Child Reporting Act. We were informed by University management that except in the case of employees at the Child Care Center, the University is not currently requiring employees to sign a statement notifying them of their status as reporters of child abuse. (Finding 13, Page 36) The Abused and Neglected Child Reporting Act (Act) (325 ILCS 5/4) states that personnel employed by institutions of higher education on and after July 1, 1986 shall sign a statement on a form prescribed by the Illinois Department of Children and Family Services, to the effect that the employee has knowledge and understanding of the reporting requirements of this Act. The statement shall be signed prior to commencement of the employment. The signed statement shall be retained by the employer. University officials stated the University encountered staff turnover in the position responsible for this compliance reporting and failed to assure that the appropriate training was documented. We recommended the University review its internal policies and procedures regarding the timely completion of signed statements on abused and neglected child reporting and have all employees comply with the requirements of the Statute. University officials agreed with the finding and recommendation. OTHER FINDINGS The remaining findings are reportedly being given attention by the University. We will review the University’s progress toward implementation of our recommendations in our next audit. AUDITORS’ OPINION The financial reports were previously released. Our auditors state the University financial statements as of June 30, 2013 are fairly presented in all material respects. WILLIAM G. HOLLAND Auditor General WGH:TLK SPECIAL ASSISTANT AUDITORS CliftonLarsonAllen were our special assistant auditors.