Southern Illinois University

REPORT DIGEST

SOUTHERN ILLINOIS UNIVERSITY

FINANCIAL AND COMPLIANCE AUDIT

(In accordance with the Single Audit Act and OMB Circular A-133)

For the Year Ended:
June 30, 1999

Summary of Findings:

Total this audit 9

Total last audit 12

Repeated from last audit 3

Release Date:
March 21, 2000

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 University did not have adequate controls over the review of unemployment benefit claims and payments.

The University reimbursed an employee for commuting expenses which are not allowed by the travel regulations.

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

SOUTHERN ILLINOIS UNIVERSITY
FINANCIAL AND COMPLIANCE AUDIT
FOR THE YEAR ENDED JUNE 30, 1999

FINANCIAL OPERATIONS (CURRENT FUNDS)		FY 1999	FY 1998
REVENUES State Appropriations Student Tuition and Fees Educational Activities Enterprise Sales Federal Grants Grants and Contracts Other Sources Total EXPENDITURES AND MANDATORY TRANSFERS Instruction Research Public Service Academic Support Institutional Support Operation of Plant Other Services Scholarships and Fellowships Auxiliary Enterprises Expenditures Mandatory Transfers Total		$209,152,818 97,358,861 42,848,366 58,257,429 43,213,848 41,626,119 56,010,723 $548,468,164 $186,734,025 31,921,356 46,427,040 71,208,201 54,764,093 44,249,013 40,202,715 30,271,028 51,506,016 7,239,732 $564,523,210	$199,501,451 93,167,975 54,189,073 54,264,115 39,650,253 37,398,527 53,431,605 $531,602,999 $181,576,926 30,527,762 41,818,766 68,540,916 50,074,893 43,396,480 36,864,739 27,145,581 49,534,584 6,912,290 $536,392,937
SELECTED ACCOUNT BALANCES (ALL FUNDS)		AT JUNE 30, 1999	AT JUNE 30, 1998
Cash and Investments Campus Plant Facilities Accrued Compensated Absences Revenue Bonds Payable		$138,327,401 $778,474,743 $48,066,116 $125,078,075	$122,034,948 $750,669,254 $47,740,890 $105,139,530
SUPPLEMENTARY INFORMATION	FY 1999		FY 1998
Employees (Fall Term) Carbondale Edwardsville Total Employees Students (Full-time Equivalent) (Fall Term) Carbondale Edwardsville Total Students Instruction Costs Per Full-time Equivalent Student Classroom Utilization (Daytime Maximum) Carbondale Edwardsville	6,499 2,507 9,006 18,688 8,831 27,519 $6,785 77% 89%		6,822 2,433 9,255 18,583 8,404 26,987 $6,728 79% 89%
UNIVERSITY PRESIDENT
During Audit Period: Dr. Ted Sanders (through January 31, 2000) Currently: Frank E. Horton, Interim President (effective February 1, 2000)

Problems in reviewing unemployment benefit claims

Travel regulations not followed

INTRODUCTION

Our 1999 audit of Southern Illinois University is presented in three volumes: Compliance Audit; Financial Audits; and Supplementary Financial Information. The findings and recommendations are contained in the Compliance Audit volume.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

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, 164 former/current employees of the University received almost $532,000 in unemployment benefits. To test controls over unemployment benefit processing we selected a sample of 75 of the 164 benefit recipients from Edwardsville and Carbondale. We tested for documentation support for the unemployment benefits paid, as well as the appropriateness of the benefit payments.

Failure to Report Simultaneous Work: In 15 percent (11 of 75) of the cases reviewed, benefit recipients were working at the University while they were also receiving unemployment benefits resulting in questionable benefits being paid. Questionable unemployment benefit payments made in these 11 cases totaled $5,749 for 38 weeks.

Vacation Pay: In 9 percent (7 of 75) of the cases reviewed, the University failed to report $14,060 in vacation payments, which are equivalent to wages, while the individuals were also receiving unemployment benefits. These 7 individuals received 161 weeks of unemployment benefits totaling $41,524.

Failure to Protest Questionable Unemployment Claims: In 7 percent (5 of 75) of the cases sampled, the University failed to protest potentially ineligible unemployment claims resulting in questionable benefits being paid. In 4 instances the University failed to protest that the individual resigned from his or her employment. These 4 cases went on to be paid $12,302 for 55 weeks of unemployment. In one instance documentation supported misconduct by the employee that the University failed to protest on the claim notice. The individual received $6,680 in unemployment benefits for 29 weeks.

Lack of Documentation: In 7 percent (5 of 75) 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 1, page 20)

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 responded that they accepted our recommendation and stated they will review University procedures for processing unemployment claims.

REIMBURSEMENT OF NON-ALLOWABLE TRAVEL EXPENSES

The University reimbursed an employee for travel expenses that were incurred during the employee's commute from his residence to his designated headquarters without submitting an exception report. This employee's permanent home is in St. Louis, Missouri, and his headquarters for travel purposes is the Carbondale campus. The employee's secondary duty station is the Edwardsville campus. When this employee was required to work at the Edwardsville campus, he claimed and received reimbursement for mileage between his designated headquarters, Carbondale, and his home in St. Louis. These payments were approximately $4,500. The Travel Guide for SIU Employees states that "As a condition of employment, employees expect to incur commuting expenses between their residence and headquarters. These expenses are not reimbursable." The University failed to complete an Exception Report for this travel, which must be completed and submitted to the Higher Education Travel Control Board. (Finding 4, page 27)

We recommended the University follow its policy of not reimbursing employees for their normal commuting expenses or clarify its policy in regard to this type of situation.

University official responded that they accepted our recommendation and stated the University does not and will not reimburse employees for their normal commuting expenses. The officials stated further their belief that the University saved approximately $2,900 in travel costs related to the employee’s travel.

OTHER FINDINGS

The remaining findings are less significant and are being given attention by the University. We will review the University’s progress towards the implementation of our recommendations in our next compliance audit.

Mr. Ron Cremeens, Executive Director of Audits, provided the University’s responses.

AUDITORS’ OPINION

Our auditors state the financial statements of the University as of June 30, 1999 and for the year then ended are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

PricewaterhouseCoopers LLP were our special assistant auditors for these audits.