FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
RECONCILIATION OF BANK ACCOUNTS NEED TO BE PERFORMED TIMELY
The University did not perform timely bank account reconciliations on seven bank
accounts that are recorded in one general ledger account. For example, the July, 1998
reconciliation was not prepared until the end of December and not approved until March,
1999. Average monthly receipts and disbursements in these accounts which include interbank
transfers are approximately $61 million. (Finding 2, page 22)
We recommended the University perform bank account reconciliations in a timely manner.
Further, these bank reconciliations should be reviewed and approved within a reasonable
amount of time after preparation to ensure that reconciling items are appropriately
addressed and promptly investigated.
University officials concurred with the recommendation and stated that the delay in
bank reconciliations was the result of financial accounting staff being involved with
activities related to the implementation of the new accounting system.
LACK OF CONTROLS IN MONITORING UNEMPLOYMENT COMPENSATION
The University's failure to develop adequate controls over the review of
unemployment benefit claims and payments has resulted in several problems.
During FY 99, 22 former or current employees of the University received $35,047 in
unemployment benefits. To test controls of unemployment benefit processing, we selected a
sample of 20 of the 22 benefit recipients. We tested for documentation support for the
unemployment benefits paid, as well as the appropriateness of the benefit payments.
Failure to Protest Questionable Unemployment Claims
In 30 percent (6 of 20) of the cases sampled, the University failed to protest
potentially ineligible unemployment claims resulting in questionable benefits being paid.
In 3 of the 6 instances the University failed to protest that the individuals resigned
their employment. These 3 individuals were paid $8,994 for 54 weeks of unemployment. In 2
of the 6 instances the University failed to protest claims of academic personnel with a
history of rehire that were filing for benefits between academic terms. Additionally,
employment offer sheets were tendered to these two individuals, but no notice was given to
the Illinois Department of Employment Security. These 2 individuals were paid $4,304 for
16 weeks of unemployment. Finally, in one instance documentation showed that an individual
was dismissed during the probationary period for failure to comply with departmental
regulations. In all 6 of these cases, the individuals' eligibility for benefits was
questionable.
Vacation Pay
In 20 percent (4 of 20) of the cases reviewed, the University failed to report
$5,930 in vacation payments, which are equivalent to wages, while the individuals were
also receiving unemployment benefits. These 4 individuals received 80 weeks of
unemployment benefits totaling $10,403.
Failure to Report Simultaneous Work
In 5 percent (1 of 20) of the cases reviewed, a benefit recipient was working
at the University while also receiving unemployment benefits resulting in questionable
benefits. Questionable unemployment benefit payments made to this individual totaled $205
for 2 weeks.
Lack of Documentation
In 10 percent (2 of 20) of the cases sampled, we found that the University
lacked some documentation to provide for adequate review of unemployment benefits paid out
and charged to the State. (Finding 5, pages 26-28)
We recommended the University develop policies and procedures for the review of
unemployment benefit claims and charges that include protesting all cases where potential
ineligibility exists so that State resources are adequately protected.
University officials concurred with our recommendation.
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 during our next audit.
University responses were provided by Ms. Kathe Munz-Shinham, Associate Vice President,
Division of Finance and Facilities.
AUDITORS’ OPINION
Our auditors stated the financial statements of Northern Illinois University as
of June 30, 1999, and for the year then ended are fairly presented in all material
respects.
____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:SES:pp
SPECIAL ASSISTANT AUDITORS
Bronner Group, INC. were our special assistant auditors for this audit.
