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INTRODUCTION
Illinois Ventures, LLC is a for-profit limited liability
Company created by the Board of Trustees of the University of Illinois. Illinois Ventures, LLC exists to
facilitate the development of new companies commercializing technology
originated or developed by faculty, staff and/or students of the University.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
USE OF UNIVERSITY RESOURCES
Illinois
Ventures used University of Illinois facilities, assets, services, and resources
without consideration paid to the University. The University and Illinois Ventures were not tracking the
expenses incurred by the University on behalf of the Illinois Ventures until
it was brought to their attention as a result of the audit. In addition, the transactions were not
initially recorded on the financial statements of Illinois Ventures.
Illinois Ventures was formed on May 30, 2000 and is a
component unit of the University of Illinois. It is recognized by the University as a University Related
Organization (URO) pursuant to a contract between the University and Illinois
Ventures.
During the year ended June 30, 2006 Illinois Ventures
received legal services and used space for which the University failed to
bill Illinois Ventures or to charge the cost of these expenses to Illinois
Ventures’ ledger account. As a
result, Illinois Ventures did not provide any consideration to the University
for these resources provided by the University. Total resources used for the year ended June 30, 2006 were
estimated to be $16,350. This amount
was subsequently recorded on the Illinois Ventures’ Statement of Revenues,
Expenses and Changes in Net Assets as revenue and as an expense.
University Guidelines adopted November 30, 1982, (as
amended September 10, 1997) by the Legislative Audit Commission state that
the University may allow the University Related Organization to use
University facilities, assets, services, and resources provided that such use
is supported by consideration at rates charged other University users, if
such charges are regularly made, or at the cost of furnishing such services
if no internal charges are in existence.
The Guidelines also require that the University budget
processes or the contract will expressly identify all support provided the
URO. Revenue accounts will be
maintained to identify all payments received from the URO for repayment of
funds advanced and as reimbursement for the use of university assets,
facilities or services. If the URO
maintains separate financial records, companion entries will, of course,
appear in these records as well.
Illinois Ventures personnel stated that University Counsel
serves as an unpaid member of the Board of Managers of Illinois Ventures and
provides legal guidance in that capacity.
As such, such guidance was not recognized as being entitled to
consideration. (Finding 1, Pages 10-11)
We recommended that Illinois Ventures work with the
University to establish a system for tracking the use of University resources
and that appropriate amounts be recorded on the Illinois Ventures’ financial
statements.
Illinois Ventures personnel stated that they have, in
cooperation with the University, established a method of tracking and
charging the use of University resources.
TIME SHEETS NOT REQUIRED
Illinois Ventures 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 sheet 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. Illinois Ventures has not
incorporated these policies into Illinois Ventures’ policies.
We noted the Illinois Ventures’ employees, who are paid a
salary, did not submit time sheets in compliance with the Act.
Illinois Ventures personnel stated they were not aware of
this requirement. (Finding 2, Page 12)
We recommended that Illinois Ventures amend its policies to
require all employees to submit time sheets in compliance with the Act.
Illinois Ventures officials stated that they intend to
comply entirely with the solution currently being developed by the
University.
AUDITORS’ OPINION
Our
auditors stated the Corporation’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.
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