REPORT DIGEST

NORTHERN ILLINOIS UNIVERSITY FOUNDATION

FINANCIAL AUDIT

For the Year Ended:
June 30, 2002

COMPLIANCE AUDIT

For the Two Years Ended
June 30, 2002

Summary of Findings

Total this audit 2
Total last audit 2
Repeated from last audit 1

Release Date:
February 25, 2003

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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 TDD (217) 524-4646
This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

 

 

 

SYNOPSIS

  • The Foundation submitted inaccurate and incomplete financial statements to the University for inclusion in the GAAP reporting package.
  • The Foundation failed to ensure that its cash balance at a bank was fully secured and collateralized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{Expenditures and Activity Measures are summarized on the reverse page.}

NORTHERN ILLINOIS UNIVERSITY FOUNDATION
FINANCIAL AUDIT
For the Year Ended June 30, 2002
COMPLIANCE AUDIT
For the Two Years Ended June 30, 2002

FINANCIAL OPERATIONS

FY 2002

FY 2001

REVENUES

Gifts
Royalties
Investment Income (Loss)
Services Contract Revenue from NIU
Expended for Plant Facilities
All Other Income
Total Revenues

 

$12,108,415
0
(515,887)
501,271
0
108,844
$12,202,643

 

$26,742,633
404,570
1,404,693
381,494
2,119,282
127,094
$31,179,766

EXPENSES

Scholarships
Support for University Departments and Programs
Library books, equipment and property improvements and fundraising
Administrative Services provided to NIU
Administrative and Office Expenses
Construction of Building
Disposals and Retirements
Total Expenses

 

$670,825
5,209,294

795,725
68,906
373,573
144,185
0
$7,262,508

 

$702,142
2,982,413

6,946,432
311,494
115,178
2,056,882
2,224,142
$15,338,683

SELECTED ACCOUNT BALANCES

AT JUNE 30, 2002

AT JUNE 30, 2001

Cash and Cash Equivalents
Investments
Land and Buildings
Construction in Progress
Accounts Payable
Due to Northern Illinois University
Deposits Held for Northern Illinois University Alumni Association
Endowment Administered for NIU……………..
Unrestricted Fund Balance
Restricted Non-expendable
Restricted Expendable
Invested in capital assets
$ 8,667,493
27,245,446
4,183,802
18,798,089
1,927,687
90,211

1,743,241
2,321,775
3,925,242
17,459,743
8,286,013
22,981,891

$ 1,928,478
44,392,240
4,026,152
2,056,882
885,968
991,990

1,817,265
0
2,585,901
20,776,110
19,286,709
6,533,576

FOUNDATION PRESIDENT
During Audit Period: Mallory M. Simpson
Currently: Mallory M. Simpson
 

 

 

 

Inaccurate and incomplete financial statements submitted for GAAP reporting

 

 

 

 

 

 

 

 

 

 

 

June 30 cash balance under-collateralized by $741,916

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NEED TO IMPROVE FINANCIAL REPORTING TO THE UNIVERSITY

The Northern Illinois University Foundation (Foundation) submitted inaccurate and incomplete financial statements to Northern Illinois University for inclusion in the University’s Generally Accepted Accounting Principles (GAAP) reporting package.

The Foundation prepared its financial statements under the old reporting model and not under the new required Governmental Accounting Standards Board (GASB) Statement No. 35 format. In addition, the Foundation did not include a Statement of Cash Flows as required under the new format.

We recommended the Foundation develop an implementation plan that includes identification of all required adjustments so it conforms to generally accepted accounting principles. (Finding 1, pages 12 - 13)

Foundation officials concurred with the recommendation and stated that steps have been taken for a timely and accurate filing in the future.

FAILURE TO FULLY SECURE AND COLLATERLIZE CASH BALANCES

The Foundation failed to ensure that its cash balances were fully secured and collateralized.

As of June 30, 2002, the Foundation’s cash balance with a bank was under-collateralized by $741,916. The State Officers and Employees Money Disposition Act requires that amounts in excess of federal deposit insurance coverage should be fully collateralized.

We recommended the Foundation monitor its collateral requirements and make a formal arrangement with its banks to automatically pledge securities for any amounts in excess of the Federal Deposit Insurance Corporation insured amount. (Finding 2, page 14)

Foundation officials concurred with the recommendation and stated arrangements have been made to provide for additional collateral from the bank.

Foundation responses were provided by Ms. Jean Jagodzinski, Controller.

AUDITORS’ OPINION

Our auditors stated the financial statements of Northern Illinois University Foundation as of June 30, 2002 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 on this audit were the Bronner Group.