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REPORT DIGEST FINANCIAL
AUDIT For the Year Ended: June 30, 2008 AND STATE COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2008 Summary of Findings: Total this audit 2 Total last audit 3 Repeated from last audit 2 Release Date: April 30, 2009
State of
Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL
To obtain a copy of the
Report contact: Office of the Auditor
General
(217) 782-6046 or TTY (888)
261-2887 This Report Digest and Full
Report are also available on the worldwide web at
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INTRODUCTIONThis digest covers our financial audit of the Northern
Illinois University Foundation (Foundation) for the year ended June 30, 2008
and our State compliance examination of the Foundation for the two years
ended June 30, 2008. SYNOPSIS¨ The Northern Illinois University Foundation did not provide the auditors with accurate financial statements. {Expenditures and Activity Measures are summarized on the reverse page.} |
FINANCIAL AUDIT AND STATE COMPLIANCE EXAMINATION
For the Period Ended June 30, 2008
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FINANCIAL OPERATIONS |
FY
2008 |
FY
2007 |
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REVENUES
(Operating and Nonoperating) Gifts..................................................................... Investment income................................................ Rental income...................................................... Services contract revenue from NIU..................... All other revenue.................................................. Total
revenues................................................ |
$15,585,711 (1,846,404) 966,846 538,690 559,765 15,804,608 |
$10,380,218 7,039,198 5,660 538,690 777,268 18,741,034 |
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EXPENSES Support for university departments and programs.. Fundraising.......................................................... Foundation operations
and administration.............. Scholarships and fellowships................................. Total expenses..................................................... Increase
in net assets |
10,281,157 1,468,481 1,390,314 1,060,259 14,200,211 $1,604,397 |
5,090,758 2,059,719 1,340,032 1,120,160 9,610,669 $9,130,365 |
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STATEMENT
OF NET ASSETS |
AT
JUNE 30, 2008 |
AT
JUNE 30, 2007 |
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Cash and cash equivalents.................................... Investments.......................................................... Capital assets....................................................... Building construction in progress........................... Pledges receivable, net......................................... Other assets......................................................... TOTAL
ASSETS............................................... Accounts payable and accrued liabilities................ Bonds and notes payable...................................... Deposits held
for NIU Alumni Association............ Endowment administered for NIU........................ Contract payments to income beneficiaries............ TOTAL
LIABILITIES...................................... Unrestricted ........................................................ Restricted Nonexpendable................................... Restricted Expendable.......................................... Invested in capital assets....................................... TOTAL
NET ASSETS...................................... |
$ 1,427,266 56,160,049 16,995,291 - 5,278,866 234,183 $80,095,655 741,731 7,236,041 2,223,897 3,232,221 755,101 14,188,991 4,848,218 36,751,976 13,921,368 10,385,102 $65,906,664 |
$ 455,540 62,343,683 4,937,552 4,540,767 11,079,315 474,853 $83,831,710 2,760,118 9,851,215 2,579,917 3,602,897 735,296 19,529,443 5,370,717 35,048,337 16,657,446 7,225,767 $64,302,267 |
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FOUNDATION PRESIDENT |
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During Audit
Period: Ms. Mallory M. Simpson Currently: Ms. Mallory M. Simpson |
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The cash flow statement was not accurate
Payments for notes and bonds payable and
construction were understated by $1.9 million
The Foundation attributed this result to
insufficient resources, timeline pressure and complex transactions |
FINDING, CONCLUSION, AND
RECOMMENDATIONS
FINANCIAL
STATEMENT PREPARATION The Foundation did not provide the auditors with accurate financial statements. Upon initial review of the draft statements provided by Foundation personnel, we raised various questions and made suggestions regarding the preparation of the cash flow statement. In our review we noted the following: · Interest paid on note and bonds payable was understated by $153,624, · Payments for the construction of a building for NIU was understated by $1,749,597, and · Receipts of interest and dividend income were understated by $450,155. According to Foundation personnel, a number of factors contributed to this result. Significant new and complex transactions, balancing insufficient resources, and timeline pressure led to a less than optimal process for review. (Finding 1, page 10 in the compliance report) We recommended the Foundation review its current process for preparation and review of the statement of cash flows and allocate the resources necessary to ensure a thorough review of the statement of cash flows by personnel possessing the appropriate skills and knowledge. The Foundation accepted our recommendation and stated
that it would carefully review opportunities to improve financial
reporting. OTHER FINDING The other
finding concerned the Foundation’s lack of a formal capitalization policy. Progress toward the implementation of all
recommendations will be the responsibility of the Foundation’s auditors in
the next audit. AUDITORS’ OPINIONOur auditors state the Foundation’s financial statements as of June 30, 2008 are fairly presented in all material respects. ______________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORSOur special assistant auditors for this audit were Clifton Gunderson, LLP. |