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REPORT DIGEST UNIVERSITY OF ILLINOIS COMPLIANCE
EXAMINATION (In
accordance with the For the Year Ended: June 30, 2007 Summary of Findings: Release Date: March 27, 2008
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 Iles Park Plaza 740 E. Ash Street Springfield, IL 62703 (217) 782-6046 or TTY (888) 261-2887 This Report Digest and the
Full Report are available on the worldwide web at |
INTRODUCTION The Financial Statement Audit for the year ended June 30, 2007 was previously released on February 26, 2008. That audit contained five audit findings. All five of these findings pertained to significant deficiencies in internal control over financial reporting. This report addresses
federal and State compliance findings pertaining to the Single Audit and
State Compliance Examination. In
total, this document contains four audit findings.
SYNOPSIS
(Federal and State Compliance Findings) ¨ Contracts and real estate leases were not filed with the State of Illinois, Office of the Comptroller and Secretary of State on a timely basis. ¨ Contracts and real estate leases were not in accordance with guidelines of the State of Illinois, Office of the Comptroller. {Financial Information and Activity Measures are summarized on the next page.} |
UNIVERSITY OF ILLINOIS
|
FINANCIAL OPERATIONS |
FY 2007 |
FY 2006 * |
|
OPERATING REVENUES |
|
|
|
Tuition
and fees, net.......................................................... |
$608,780,000 |
$554,856,000 |
|
Federal
grants, contracts and appropriations................ |
604,164,000 |
608,949,000 |
|
State and
private gifts, grants and contracts................. |
197,592,000 |
176,805,000 |
|
Hospital
and medical activities......................................... |
568,514,000 |
549,742,000 |
|
Auxiliary
enterprises, net................................................... |
304,094,000 |
282,321,000 |
|
Educational
activities......................................................... |
215,348,000 |
197,089,000 |
|
Other..................................................................................... |
129,537,000 |
120,546,000 |
|
Total
Operating Revenues........................................ |
$2,628,029,000 |
$2,490,308,000 |
|
OPERATING EXPENSES |
|
|
|
Instruction........................................................................... |
$703,540,000 |
$666,200,000 |
|
Research............................................................................... |
561,876,000 |
556,874,000 |
|
Public
service...................................................................... |
326,348,000 |
300,990,000 |
|
Academic
support.............................................................. |
236,561,000 |
218,043,000 |
|
Hospital
and medical activities......................................... |
431,762,000 |
406,466,000 |
|
Auxiliary
enterprises.......................................................... |
234,751,000 |
229,935,000 |
|
On behalf
payments for fringe benefits........................... |
376,657,000 |
327,927,000 |
|
Operation
and maintenance of plant................................ |
218,028,000 |
229,038,000 |
|
Institutional
support.......................................................... |
167,172,000 |
150,572,000 |
|
Depreciation........................................................................ |
191,679,000 |
185,105,000 |
|
Scholarships
and fellowships........................................... |
198,016,000 |
185,155,000 |
|
Other..................................................................................... |
98,397,000 |
92,295,000 |
|
Total
Operating Expenses......................................... |
$3,774,787,000 |
$3,548,600,000 |
|
Operating Income (Loss)........................................................... |
$(1,116,758,000) |
$(1,058,292,000) |
|
NONOPERATING REVENUES (EXPENSES) |
|
|
|
State appropriations........................................................... |
$665,752,000 |
$655,521,000 |
|
Capital appropriations, gifts and grants.......................... |
20,828,000 |
65,600,000 |
|
Private gifts and endowments.......................................... |
128,852,000 |
116,319,000 |
|
On behalf payments for fringe benefits........................... |
305,047,000 |
266,706,000 |
|
Other, net............................................................................. |
42,150,000 |
15,047,000 |
|
INCREASE IN NET ASSETS................................................... |
$45,871,000 |
$60,901,000 |
|
Net assets, beginning of year................................................... |
$2,369,985,000 |
$2,309,084,000 |
|
Net assets, end of year.............................................................. |
$2,415,856,000 |
$2,369,985,000 |
|
SUPPLEMENTAL INFORMATION
(Unaudited) |
FY 2007 |
FY 2006 |
|
Employment Statistics – Chicago................................................................................ |
13,848 |
13,638 |
|
Springfield............................................................................ |
914 |
885 |
|
Urbana-Champaign............................................................. |
14,788 |
14,711 |
|
Total.............................................................. |
29,550 |
29,234 |
|
Enrollment Statistics – Undergraduate
-- Chicago........................................................................ |
15,006 |
15,150 |
|
Springfield.................................................................... |
2,758 |
2,634 |
|
Urbana-Champaign..................................................... |
31,472 |
30,909 |
|
Subtotal................................................................ |
49,236 |
48,693 |
|
Graduate
– Chicago........................................................................ |
9,638 |
9,662 |
|
Springfield.................................................................... |
2,003 |
1,883 |
|
Urbana-Champaign..................................................... |
11,266 |
11,029 |
|
Subtotal................................................................ |
22,907 |
22,574 |
|
Total............................................................ |
72,143 |
71,267 |
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UNIVERSITY PRESIDENT |
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|
|
During Audit Period and Currently: Dr. B. Joseph White
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*
Items have been reclassified to correspond with the 2007 presentation.
|
Filing with State
Comptroller up to 122 days late Filing with
Secretary of State up to 373 days late State law requires
filing of contracts and leases University agrees
with auditors Leases executed
after lease term began Contracts executed
after the performance of services University agrees
with auditors |
INTRODUCTION
The Single Audit and Compliance Examination is contained in two report documents. One report contains compliance findings disclosed by our tests and certain supplemental information. The other report contains supplementary financial information and special data requirements. FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS CONTRACTS AND REAL ESTATE LEASES NOT FILED TIMELY Contracts and real estate leases were not
filed with the Illinois Office of the State Comptroller and Secretary of
State on a timely basis. Our testing of 50 contracts and real estate leases revealed that 22 (44%) were not filed timely with the Office of the State Comptroller. The late filings ranged from 3 to 122 days late. Our testing of 25 real estate leases revealed that 14 (56%) were not filed timely with the Secretary of State. The late filings ranged from 1 to 373 days late.
The Illinois Procurement Code (30 ILCS 500/20-80(b)) and the
Statewide Accounting Management System (Procedure 15.10.40) require State
agencies to file contracts for professional and artistic services exceeding
$5,000 and all other contracts and leases exceeding $10,000 with the State Comptroller within 15 calendar days
after execution. In addition, the
Illinois State Finance Act (30 ILCS 105/9(a)) requires State agencies to file
all real estate leases with the Office of the Secretary of State within 15
calendar days after execution. (Finding 9, page 13) This finding was first
reported in 2004. We recommended the University revise its procedures to ensure all applicable contracts and real estate leases are filed with the Office of the State Comptroller and Secretary of State in accordance with State statutes and related guidelines. University officials accepted our finding and recommendation. (For the previous agency response, see Digest footnote #1.) CONTRACTS AND REAL ESTATE LEASES NOT IN ACCORDANCE WITH GUIDELINES Contracts and real estate leases were not in accordance with guidelines of the Illinois Office of the State Comptroller. We examined 25 contracts and 25 real estate leases from all areas of the University. The following problems were noted: · 5 leases were executed after the lease term began. The lease executions ranged from 13 days to 110 days late.
·
5 contracts were executed subsequent to the
performance of services. The contract
executions ranged from 11 days to 157 days late.
·
5 leases omitted the federal identification number
and did not include a Legal Status Disclosure Certification for the lessor.
·
1 lease did not include the Debt Certification
Clause, the Felony Certification Clause, and the Environmental Barriers Act
Clause. (Finding 10, pages 14-15) This finding was first reported in 2003. We recommended the University establish appropriate procedures to ensure all contracts and leases are completed, approved, and executed prior to the start of the services and lease term. Further, the University should review procedures to ensure all appropriate clauses and certifications are obtained prior to execution for all real estate lease agreements. University officials accepted our recommendation and stated that they will continue to examine their routing procedures to ensure that contracts and leases are approved and executed prior to the start of the services and lease terms. (For the previous agency response, see Digest footnote #2.) OTHER FINDINGS The remaining findings are reportedly being addressed by University management. We will review the University’s progress toward the implementation of our recommendations in our next examination. AUDITORS’ OPINION The financial audit reports were previously released. Our auditors stated the June 30, 2007 financial statements were fairly presented in all material respects.
_____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:TLK:pp SPECIAL ASSISTANT AUDITORS Clifton Gunderson LLP were our special assistant auditors. DIGEST FOOTNOTES #1 Contracts and Real Estate Leases
Not Filed Timely – Previous University Response Accepted. The University continues to revise its
procedures to ensure all contracts and real estate leases are filed with the
Office of the Comptroller in accordance with State statutes and
guidelines. Filing is now based upon
the execution date instead of the start date of the agreement. Discussion with the Comptroller’s Office
is ongoing regarding whether purchase orders also need to be filed.
#2 Real Estate Leases Not In
Accordance With Guidelines – Previous University Response Accepted.
The University has invested substantial effort to improve its
procedures. Both campuses now utilize
standard lease templates to ensure all appropriate clauses and certifications
are included in all real estate lease agreements. The University will continue to refine its procedures to ensure
that all State requirements are met. |