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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
NONCOMPLIANCE WITH DAVIS-BACON ACT
The
University did not require and had not obtained a weekly certified payroll
from a construction contractor who was being paid from federal funds. The agreement with the contractor
also indicated that the contract was subject to the State of Illinois
Prevailing Wage Act; however, the University did not obtain monthly
payroll certifications from this contractor as required by the State of
Illinois Prevailing Wage Act.
During our
testing of the Healthcare and Other Facilities (CFDA # 93.887), a major
program for purposes of the Single Audit, we noted that the University did
not comply with Department of Labor regulations which require the
University obtain, for each week in which any contract work is performed,
a copy of the payroll and a statement of compliance (certified payrolls)
from the contractors and subcontractors for projects subject to the
Davis-Bacon Act. The
agreement with this contractor also indicated that the contract was
subject to the State of Illinois Prevailing Wage Act, which requires
monthly payroll certifications.
However, the University did not obtain these monthly
certifications. (Finding 3,
pages 13-14)
We
recommended the University establish and implement procedures to ensure
all required payroll certifications are contractually required by the
University in its contracts, and that they are obtained once the project
has begun.
University
officials agreed with the finding and recommendation and stated that they
have implemented procedures to ensure that all required payroll
certifications are contractually required by the University in its
contracts, and that they are obtained and reviewed once the project has
begun.
NONCOMPLIANCE WITH GOVERNMENT-WIDE
NONPROCUREMENT DEBARMENT AND SUSPENSION COMMON RULE
When entering into a covered transaction as part of a federally
funded project the University failed to properly verify that the party
with which they were contracting was not suspended or disqualified.
During our testing of the Healthcare and Other Facilities (CFDA
# 93.887) and the Teacher Quality Enhancement Grants (CFDA # 84.336),
major programs for purposes of the Single Audit, we noted three covered
transactions that are subject to the Government-wide Debarment and
Suspension Common Rule. The
University did not comply with this rule’s requirement that they properly
verify that a party is not excluded or disqualified. (Finding 4, Page
15)
We recommended that the University establish and implement
procedures to ensure all required debarment verifications are performed
prior to entering into covered transactions as part of a federally funded
program.
University officials concurred with the finding and stated that
they have established and implemented procedures that will ensure
verifications are performed prior to entering into covered
transactions.
TIME SHEETS NOT
REQUIRED
The University did not require all
employees to submit time sheets as required by the State Officials and
Employees Ethics Act.
The Act
requires the University to adopt personnel policies consistent with the
Act. The Act (5 ILCS 430/5-5
(c)) further states, “The policies shall require State employees to
periodically submit time sheets documenting the time spent each day on
official State business to the nearest quarter
hour.”
We noted
certain categories of the University’s employees did not submit time
sheets in compliance with the Act. We tested a sample of 25 University
employees during the year.
The sample included 7 hourly employees and 18 salaried employees
which included faculty and administrative staff. Except for hourly
employees who do use timecards, employees’ time is tracked using the
University’s payroll system, which is a “negative” timekeeping system
whereby the employee is assumed to be working unless noted otherwise. No time sheets documenting the
time spent each day on official State business to the nearest quarter hour
are maintained for these employees.
(Finding 6, Pages 17-19)
We
recommended the University amend its policies to require all employees to
submit time sheets in compliance with the Act.
The
University did not accept this finding. The University assumed compliance
with the statute based upon guidance from the Executive Inspector
General. University officials
stated that their policy takes into account the necessity of recording all
time accountable for State service to the nearest quarter hour.
In an
auditor comment we noted that the State Officials and Employees Ethics Act
defines “State Agency” to include “public institutions of higher
learning…” 5 ILCS 430/1-5.
Northern Illinois University is defined as a “public institution of
higher learning” in Section 2 of the Higher Education Cooperation Act…”
110 ILCS 220/2. Further, the
State Officials and Ethics Act defines “State employee” to be “any
employee of a State agency.”
5 ILCS 430/1-5.
As noted in
the finding, the State Officials and Employees Ethics Act requires “State
employees to periodically submit time sheets documenting the time spent
each day on official State business to the nearest quarter hour…” 5 ILCS
430/5-5 (c). This timekeeping
requirement went into effect March 1, 2004. The negative timekeeping system
used for several categories of University employees requires those
employees to report only time away from State business, not the time spent
each day on State business. Further, it is logical to assume that,
by adopting this language, the legislature meant to effect a change in the
method used by State employees to record their time – that is, to adopt a
positive timekeeping system.
Finally, the May 24, 2004, memorandum from the Office of Executive
Inspector General upon which the University relied in maintaining its
customary negative timekeeping system for several categories of its
employees clearly states that it “is not a legal
opinion.”
We continue
to believe that a positive timekeeping system for State employees is
required by the State Officials and Employees Ethics Act. If the University disagrees with
this conclusion, we further recommend that it seek a formal, written
opinion from the Attorney General’s Office on the requirements of this
statutory provision.
CONTRACT(S) NOT APPROVED AND FILED TIMELY
Contracts and leases were not timely filed
with the State of Illinois, Office of the Comptroller, and one was not
approved timely.
During
our testing of five contracts, we noted that four contracts were not filed
with the Office of the Comptroller. We also tested five leases and noted
that one was not filed timely with the Office of the Comptroller. In
addition, we noted one contract for services was not signed until after
the services had begun. (Finding 7, page 20)
We
recommended the University implement procedures to ensure all contracts
and leases over the required amounts are filed timely with the Office of
the State Comptroller in accordance with State statutes and
guidelines. We further
recommended that all contracts and leases be signed prior to the start of
the contract period.
The
University agreed with the finding and stated that they have implemented
procedures to ensure compliance in the future.
FAILURE TO COMPLETE
ETHICS TRAINING WITHIN SIX MONTHS OF EMPLOYMENT
The
University did not provide ethics training within six months of initial
employment for individuals hired during fiscal year 2005.
We
selected 25 people hired during fiscal year 2005 for testing for proper
ethics training. Two employees did not complete ethics training within six
months of their initial hire date and for two additional employees, the
University could not provide verification that the employees had completed
the training in an alternative format. (Finding 8, pages 21-22)
We
recommended that the University develop and implement procedures to ensure
that employees complete ethics training within six months of their initial
date of employment.
The
University did not accept this finding. University officials stated that
no alternatives were authorized by the Office of Executive Inspector
General other than to include new hires in the next regularly scheduled
annual training process in 2005.
In an
auditor comment, we stated that it was still the responsibility of the
University to determine another means of providing the necessary Ethics
Training in accordance with the Act.
OTHER FINDINGS
The
remaining findings are reportedly being given attention by the
University. We will review
the University’s progress toward the implementation of our recommendations
in our next audit.
University
responses were provided by Keith R. Jackson, Controller.
AUDITORS' OPINION
Our
auditors stated the University’s financial statements at June 30, 2005 and
for the year then ended are fairly presented in all material respects.
___________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:TLK:pp
SPECIAL ASSISTANT
AUDITORS
Our
special assistant auditors were Clifton Gunderson LLP. | 