REPORT DIGEST NORTHEASTERN ILLINOIS UNIVERSITY Financial Audit For the Year Ended June 30, 2015 Release Date: February 4, 2016 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 1 -- 0 -- 1 Category 2: 0 -- 0 -- 0 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 FINDINGS LAST AUDIT: 3 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 This digest covers the Northeastern Illinois University’s Financial Audit as of and for the year ended June 30, 2015. The Northeastern Illinois University’s Compliance Examination (including the Single Audit) covering the year ended June 30, 2015 will be issued at a later date. SYNOPSIS • 15-1 The University had inadequate internal controls over the review and approval of journal entries and bank reconciliations. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO IMPROVE CONTROLS OVER JOURNAL ENTRIES AND BANK RECONCILIATIONS Northeastern Illinois University (University) did not have adequate controls over the review and approval of journal entries and bank reconciliations. In our performance of auditing procedures on grant revenue, we noted that an erroneous journal entry posted to the University’s accounting system resulted in an overstatement of beginning net position and an understatement of grant revenue for the fiscal year ended June 30, 2015 totaling $401,081. In addition, our testing of six journal entries for review and approval revealed that three of these entries were not reviewed or approved by another individual prior to entry into the University’s accounting system. Also, in our review of bank reconciliations prepared for the months of September 2014, February 2015 and June 2015, we noted that although the bank reconciliations were prepared within one week of the end of the respective month, the reconciliations were not reviewed and approved by a person independent of the preparer in a timely manner. Specifically, one reconciliation from September 2014 was not reviewed until December 12, 2014, four reconciliations from February 2015 were not reviewed until June 16, 2015, and six reconciliations from June 2015 were not reviewed until various dates in August 2015. (Finding 1, pages 64-65) We recommended the University implement procedures to ensure that all journal entries are reviewed and approved by another individual prior to entry into the University’s accounting system and that bank reconciliations be reviewed in a timely manner. University officials concurred with the finding. AUDITOR’S OPINION Our auditors state the financial statements of the Northeastern Illinois University as of and for the year ended June 30, 2015 are fairly presented in all material respects. FRANK J. MAUTINO Auditor General FJM:TLK SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for this audit were CliftonLarsonAllen LLP.