REPORT DIGEST

UNIVERSITY OF ILLINOIS ALUMNI ASSOCIATION

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2006

Summary of Findings:

Total this audit                          2

Total last audit                          0

Repeated from last audit           0

Release Date:

March 8, 2007 

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

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SYNOPSIS

·        The University of Illinois Alumni Association (Association) did not require all employees to submit time sheets as required by the State Officials and Employees Ethics Act.

·        The Association did not have a written lease in place when it moved into its new office location on the University of Illinois Chicago campus.

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

FINANCIAL OPERATIONS (All Funds)

FY 2006

FY 2005

OPERATING REVENUES.................................................

OPERATING EXPENSES...................................................

      Operating income..............................................................

NONOPERATING REVENUES (EXPENSES)

      Investment income.............................................................

      Contributions.....................................................................

      Interest expense.................................................................

      Net increase in fair value of investments..............................

            Net nonoperating expenses..........................................

            Increase (decrease) in net assets..................................

NET ASSETS, beginning of year.........................................

NET ASSETS, end of year...................................................

$9,112,700

$8,727,000

$385,700

$316,700

$(6,949,600)

$(69,500)

$1,141,400

$(5,561,000)

$(5,175,300)

$16,069,800

$10,894,500

$8,121,700

$7,235,400

$886,300

$279,700

$(1,362,600)

$0

$1,024,200

$(58,700)

$827,600

$15,242,200

$16,069,800

ALUMNI ASSOCIATION PRESIDENT

During Audit Period:  Mr. Loren R. Taylor

Currently:  Mr. Loren R. Taylor

Noncompliance with State Officials and Employees Ethics Act

Use of negative timekeeping system by employees

The lease was not signed by both parties until five months after occupancy

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

TIME SHEETS NOT REQUIRED

      The University of Illinois Alumni Association (Association) did not require all employees to submit time sheets as required by the State Officials and Employees Ethics Act (Act).

      The Act required the Illinois Board of Higher Education (IBHE), with respect to State employees of public universities, to adopt and implement personnel policies. The Act (5 ILCS 430/5-5(c)) states, “The policies shall require State employees to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour; contractual State employees may satisfy the time sheets requirement by complying with the terms of their contract, which shall provide for a means of compliance with this requirement.”  The IBHE adopted personnel policies for public universities on February 3, 2004 in accordance with the Act.  The Association has not incorporated these policies into the Association’s policies.

      We noted the Association’s employees did not submit time sheets in compliance with the Act.  Employees generally track their time using a “negative” timekeeping system whereby the employee is assumed to be working unless noted otherwise.  No time sheets documenting the time spent each day on official State business to the nearest quarter hour are maintained. (Finding 1, page 9) 

      We recommended the Association amend its policies to require all employees to submit time sheets in compliance with the Act.

      Association management stated that they were aware that the University of Illinois acknowledged the requirements of the Act and that they will monitor the University’s progress, coordinate with the University on any proposed solution(s), and determine what additional actions the Association may be required to take to comply with the Act.

OCCUPYING OFFICE SPACE WITHOUT A WRITTEN LEASE IN PLACE

The University of Illinois Alumni Association (Association) did not have a written lease in place when it moved into its new office location on the University of Illinois Chicago campus.

The Association moved into its new office location on March 1, 2006; however, the lease was not signed by both parties until July 31, 2006.  The Association occupied its new office location for five months before a written lease was signed by both parties. The lease is with the University of Illinois at Chicago.

Association management stated they had agreed in principle with the lessor to the lease terms and agreed on the move-in date.  However, the lessor did not provide a written lease until a later date. (Finding 2, Page 10)

We recommended that the Association obtain a written, executed lease prior to occupying any office space whether with a related party or an unrelated party.

Association management acknowledged that the written lease was not in place prior to the move and stated they intend to maintain executed leases prior to, and during the term of, occupancy with respect to all office locations.

AUDITORS’ OPINION

      Our financial statement audit for the year ended June 30, 2006 was previously issued.  Our auditors stated the Alumni Association’s June 30, 2006 financial statements are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:TLK:PP

SPECIAL ASSISTANT AUDITORS

      Our special assistant auditors were Clifton Gunderson LLP.