REPORT DIGEST

NORTHEASTERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the Single Audit Act of 1984, and OMB Circular A-133)
For the Year Ended:
June 30, 1996

Summary of Findings:

Total this audit	6
Total last audit	2
Repeated from last audit	2

Release Date:
May 15, 1997

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

The University did not adequately follow up on collection of past due accounts receivable to expedite collection. The current student accounts receivable balance was $216,196 at June 30, 1996.

The University did not maintain adequate controls over its parking permit dispenser machine.

{Financial Information is summarized on the reverse page.}

NORTHEASTERN ILLINOIS UNIVERSITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 1996

FINANCIAL OPERATIONS (CURRENT FUNDS)	FY 1996	FY 1995
REVENUES State Appropriations: General Revenue Fund Education Assistance Fund Payments on behalf of University Student tuition and other fees Grants (principally federal awards) Commuter center sales and services Parking revenue Other sources TOTAL REVENUES EXPENDITURES & MANDATORY TRANSFERS Instruction Research Public Service Academic Support Student services and Programs Institutional support Operation of plant Scholarships and Fellowships Auxiliary enterprises Mandatory transfers Total	$ 29,907,041 3,362,100 6,285,554 17,809,190 10,169,434 157,263 721,272 2,598,714 $ 71,010,568 $ 23,533,250 243,169 5,431,473 4,967,804 6,161,049 16,610,224 7,416,812 5,579,971 2,272,849 315,047 $ 72,531,648	$ 28,721,518 3,220,400 5,690,131 17,324,273 10,994,045 194,332 789,903 2,210,433 $ 69,145,035 $ 22,680,076 1,496,226 5,183,721 5,193,579 5,693,554 14,430,081 7,077,895 5,368,492 1,731,391 313,969 $ 69,168,984
SELECTED ACCOUNT BALANCES (ALL FUNDS)	JUNE 30, 1996	JUNE 30, 1995
Cash and short-term investments Equipment Buildings and Land Accrued compensated absences Fund balances (deficit): Unrestricted Restricted Loan Net investment in plant Unrestricted Restricted	$ 5,702,193 33,894,395 66,493,951 12,178,542 (8,802,345) 127,849 1,773,567 90,340,376 2,828,128	$ 6,232,356 30,790,014 64,588,942 10,691,694 (6,890,025) 460,094 1,637,688 85,845,001 2,869,891
SUPPLEMENTARY INFORMATION	FY 1996	FY 1995
Employment Statistics Administration Faculty Civil Service Students Total Employees Selected Activity Measures Annual full-time equivalent students - Undergraduate Annual full-time equivalent students - Graduate Full-time equivalent cost per student - Undergraduate Full-time equivalent cost per student - Graduate	203 330 455 442 1,430 5,438 1,564 $5,943 $7,687	204 325 451 468 1,448 5,521 1,533 $5,786 $7,412

UNIVERSITY PRESIDENT

During Audit Period: Dr. Salme H. Steinberg
Currently: Dr. Salme H. Steinberg

Controls over collection of student accounts receivable are inadequate

Controls over parking permit dispenser are inadequate

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE REVIEW OF PAST-DUE STUDENT ACCOUNTS RECEIVABLE

The University did not adequately follow up on past-due accounts receivable to expedite their collection. The total student accounts receivable balance for tuition and fees as of June 30, 1996 was $548,987. Of that amount, $216,196 was less than 1 year old and was considered to be current.

The University's procedures require review of the aging schedule each semester for the current term only. Follow-up and collection procedures were not conducted for some accounts. As of June 30, 1996, the University had approximately $332,791 in accounts receivable which were more than one year old. (Finding 4, page 11)

We recommended the University revise collection practices to require semester reviews of the entire aging schedule.

The University agreed with this finding and stated it has modified its collection procedures in which accounts are to be reviewed quarterly, collection letters mailed for past-due accounts and , if necessary, sent to professional collection agencies.

INADEQUATE CONTROLS OVER AUTOMATIC PARKING PERMIT DISPENSER

The University's parking permit dispenser did not always operate properly and the internal controls regarding this parking permit process were not adequate.

The automatic parking permit dispenser sells daily parking permits to University students or visitors. The machine collected $17,896 during the fiscal year or approximately 39% of the total revenue for daily parking permit sales of $45,667. The machine repeatedly broke down for extended periods of time causing daily permits to be issued without collection of cash, an unavailability of parking permits, and inadvertent disbursement of cash.

Cash from the machine was counted daily by University personnel and reconciled to the number of parking permits issued. The physical observation of the cash, however, was performed by the same person every day and the reconciliation to the number of permits issued typically identified that the machine did not collect the correct amount of cash. (Finding 5, page 13)

We recommended the University correct the parking permit dispenser's malfunctions and perform all control procedures within the system, including a segregation of duties.

The University agreed with our recommendation and will replace the software in the permit machine and strengthen other internal controls.

OTHER FINDINGS

The remaining findings are less significant and have been given appropriate attention by the University. We will review progress toward implementation of our recommendations in our next audit. Responses to the findings were provided by Cleve McDaniel, Vice President of Administrative Affairs.

AUDITORS' OPINION

Our auditors state the June 30, 1996 financial statements of Northeastern Illinois University are fairly presented.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Deloitte & Touche LLP were our special assistant auditors for this audit.