Northeastern Illinois University

REPORT DIGEST

NORTHEASTERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

(In accordance with the Single Audit Act and OMB Circular A-133)

For the Year Ended:
June 30, 1999

Summary of Findings:

Total this audit 3
Total last audit 6
Repeated from last audit 1

Release Date:
April 20, 2000

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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or (217) 524-4646

This Report Digest is also available on the worldwide web at http://www.state.il.us/auditor

SYNOPSIS

The University lacked controls over the monitoring of unemployment compensation resulting in questionable benefits paid to employees.

{Financial Information is summarized on the reverse page.}

NORTHEASTERN ILLINOIS UNIVERSITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 1999

FINANCIAL OPERATIONS (CURRENT FUNDS)	FY 1999		FY 1998
REVENUES State Appropriations General Revenue Fund Education Assistance Fund Capital Development Fund Payments on behalf of University Student tuition and other fees Grants (principally federal awards) Student Union sales and services Parking revenue Other sources Total EXPENDITURES AND 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	$ 34,392,270 3,745,600 1,020,635 8,794,433 21,048,543 12,753,035 85,036 733,556 3,231,781 $ 85,804,889 $ 26,301,521 86,015 7,095,193 5,960,465 5,966,157 18,101,031 9,289,615 7,411,704 1,839,915 675,428 $ 82,727,044		$ 32,502,481 3,601,498 46,635 7,970,337 19,757,214 10,860,474 154,857 685,409 2,986,200 $ 78,565,105 $ 25,083,470 149,318 5,453,566 5,121,207 6,827,545 17,983,774 6,733,400 6,146,612 1,969,134 679,054 $ 76,147,080
SELECTED ACCOUNT BALANCES (ALL FUNDS)	JUNE 30, 1999		JUNE 30, 1998
Cash and short-term investments Equipment Buildings and Land Accrued compensated absences Fund balances (deficit): Unrestricted Restricted Loan Net investment in plant Unrestricted Restricted Income Fund	$10,658,959 39,178,294 86,594,742 13,280,692 (4,334,495) 444,479 2,153,905 117,157,476 1,525,851 $(7,297,330)	$12,636,419 37,445,532 79,345,698 13,191,994 (7,001,800) 481,912 2,023,767 107,490,881 1,978,564 $(8,511,023)
SUPPLEMENTARY INFORMATION	FY 1999	FY 1998
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	202 347 453 416 1,418 5,792 1,441 $6,410 $9,595	193 344 454 431 1,422 5,657 1,441 $6,366 $7,258
UNIVERSITY PRESIDENT During Audit Period: Dr. Salme H. Steinberg Currently: Dr. Salme H. Steinberg

Inadequate controls over unemployment benefit claims and payments

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LACK OF CONTROLS IN MONITORING UNEMPLOYMENT COMPENSATION

The University failed to develop adequate controls over the review of unemployment benefit claims and payments. This resulted in questionable benefits being paid by the State.

During the audit period, 28 former/current employees of the University received $72,532 in unemployment benefits. To test controls over unemployment benefit processing, we selected a sample of 20 Fiscal Year 1999 benefit recipients to determine the appropriateness of payments. We noted the following:

In seven cases employees received $28,461 in questionable benefits because the University failed to protest the unemployment claims.

In two cases reviewed, the University failed to report/protest benefits to persons who had received $7,960 in vacation payments which count as wages. These individuals received 38 weeks of unemployment benefits totaling $12,592.

In six cases reviewed, the benefit recipients were employed by the University while they were also receiving unemployment benefits by the State. Questionable unemployment benefit payments made in these cases totaled $4,069 for 19 weeks.

In eight cases reviewed, the University lacked documentation to evaluate the appropriateness of benefits paid.

In addition, the University could not locate personnel files for three individuals who were paid $6,103 in unemployment benefits for 52 weeks. (Finding 2, pages 17-18)

We recommended the University develop formal policies and procedures for review of unemployment benefit activity to ensure state resources are adequately protected.

University officials agreed with our finding and recommendation and stated they are in the process of developing formal policies and procedures for review of unemployment benefit activity.

OTHER FINDINGS

The remaining findings and recommendations were less significant and are being given attention by University management. We will review progress toward implementation of our recommendations in our next audit.

University responses were provided by Dr. Helen C. Ang, Acting Chief Fiscal Affairs Officer.

AUDITORS' OPINION

Our auditors stated the University’s financial statements as of June 30, 1999 and for the year then ended are fairly presented in all material respects.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were Nykiel, Carlin, Lemna & Co.