REPORT DIGEST

NORTHERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
For the One Year Ended: June 30, 2013


Release Date:   December 19, 2013

Summary of Findings:
Total this audit: 1
Total last audit:  1
Repeated from last audit: 1

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

INTRODUCTION

This digest covers our financial audit of
Northern Illinois University for the year ended
June 30, 2013.  A compliance examination
covering the year ended June 30, 2013 will be
issued at a later date.

SYNOPSIS

• The University needs to improve internal
controls over financial reporting.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NEED TO IMPROVE FINANCIAL REPORTING

Northern Illinois University needs to improve
internal control over financial reporting.

During our review of the draft financial
statements, we noted the University did not
properly accrue interest on a capital lease.  As
a result of bringing this to their attention,
the University recorded an adjustment of
approximately $4.3 million to increase interest
expense.

According to University management the error
resulted from management using a cash based
repayment schedule for the principal and
interest instead of recalculating interest
expense over the entire term of the agreement.
(Finding #1, page 5 in the Report Required Under
Government Auditing Standards) This finding was
first reported in 2011.

We recommended the University improve controls
over financial reporting to ensure accurate
presentation and disclosure of the University’s
annual financial statements.

University officials accepted our
recommendation. (For the previous University
response, see Digest Footnote #1.)

AUDITORS’ OPINION

Our auditors stated the financial statements of
Northern Illinois University as of June 30,
2013, and for the year then ended, are fairly
stated in all material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:TLK

SPECIAL ASSISTANT AUDITORS

McGladrey LLP were our special assistant
auditors for this engagement.

DIGEST FOOTNOTES

 #1 –Need to Improve Financial Reporting –
 Previous University Response

The University agrees.