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REPORT DIGEST THE ASSOCIATION OF ALUMNI, FORMER STUDENTS AND
FRIENDS OF SOUTHERN FINANCIAL
AUDIT For the Year Ended: June 30, 2008 Release Date: January 8, 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
782-6046 or TTY (888) 261-2887 This Report Digest and the
Full Report are also available on the worldwide web at www.auditor.illinois.gov |
SYNOPSIS
· The Carbondale Alumni Association did not have proper segregation of duties over journal entry posting and review. |
THE ASSOCIATION OF ALUMNI, FORMER STUDENTS AND
FRIENDS OF SOUTHERN
FINANCIAL AUDIT
For The Year Ended June 30, 2008
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FINANCIAL
OPERATIONS (All Funds) |
FY 2008 |
FY 2007 |
REVENUESOperating Revenues............................................. EXPENSESOperating Expenses............................................. NON-OPERATING REVENUESInvestment gain (loss), dividends and interest, net Contributions....................................................... Net Non-operating Revenues......................... Increase (decrease) in Net Assets................... NET ASSETSNet Assets-beginning of year................................
Net Assets-end of year........................................ |
$2,032,734 1,875,358 ($405,657) 23,696 ($381,961) ($224,585) 4,484,939 $4,260,354 |
$2,002,998 1,837,120 $787,214 9,742 $796,956 $962,834 3,522,105 $4,484,939 |
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OTHER SIGNIFICANT
ACCOUNT BALANCES |
At June 30, 2007 |
At June 30, 2007 |
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Cash and investments................................................... Total assetsDeferred Revenue........................................................ Total LiabilitiesNet Assets-Invested in capital assets............................ Net Assets-Unrestricted.............................................. Total Net Assets |
$6,193,249 $6,508,881 $2,089,997 $2,248,527 $253,866 $4,006,488 $4,260,354 |
$6,528,982 $6,630,222 $2,033,628 $2,145,283 $4,511 $4,480,428 $4,484,939 |
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ALUMNI ASSOCIATION DIRECTOR |
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During Audit Period: Mr. Edward Buerger (through 12-31-07), Ms. Michelle Suarez (eff. 1-1-08) |
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Currently: Ms. Michelle Suarez |
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Segregation of
duties not adequate over journal entries
Mitigating controls
in place not designed to detect unauthorized journal entries |
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS INTERNAL CONTROLS OVER JOURNAL ENTRIES The Association did not have proper segregation of duties in place over the general ledger system, given the current internal control structure over journal entry posting and review. The Association has adopted internal control procedures which require all general ledger journal entries to be entered by an accounting staff member, and reviewed and approved by the Controller. However, the Controller also has the ability to post general journal entries into the general ledger. While our audit testing of a sample of current year journal entries did not note any instances where the Controller had posted journal entries, access to do so exists within the accounting software system. This access presents a risk that unauthorized journal entries could be recorded. The Association is responsible for the development of internal controls and the monitoring of their operating effectiveness. The Association relies on other internal control procedures to mitigate this significant deficiency in internal controls. However, the other internal control procedures in place are not designed to detect the posting of unauthorized journal entries by the Controller. (Finding 1, page 27) We recommended that the general ledger accounting system access rights be commensurate with the employee’s responsibilities. The Controller should not have access to post journal entries into the general ledger, or a formalized review process should be established for journal entries initiated and posted by the Controller. Association officials accepted our recommendation and stated
that due to a small staff size, the Controller must have access rights to
enter, authorize, record, and process general ledger entries. However, to prevent unauthorized journal
entries, the Association will enhance its review process for all journal
entries posted, by having the Executive Director review and approve all
journal entries made each month. In
addition, the Association will continue enforcing its current mitigating
controls, including having all journal entries approved by an individual
separate of the person responsible for creating and/or entering the journal
entry. AUDITORS’ OPINION Our auditors stated the June 30, 2008 financial statements of the Association are fairly presented in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:KMA :pp SPECIAL ASSISTANT AUDITORS Crowe Horwath LLP were our special assistant auditors for this audit. |