REPORT DIGEST

WESTERN ILLINOIS UNIVERSITY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  June 22, 2022

FINDINGS THIS AUDIT:  2

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  1 -- 1 -- 2
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 1 -- 2

FINDINGS LAST AUDIT: 1

Category 1: Findings that are material
weaknesses in internal control and/or
a qualification on compliance with
State laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, 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 Full Report are
also available on the worldwide web at
www.auditor.illinois.gov

INTRODUCTION

This digest covers Western Illinois
University’s Financial Audit as of and
for the year ended June 30, 2021. The
Western Illinois University’s Single
Audit and State compliance examination
covering the year ended June 30, 2021,
were separately released.

SYNOPSIS

• (21-01)  The University did not have
adequate internal control over
reporting its census data and did not
have a reconciliation process to
provide assurance census data
submitted to its pension and other
postemployment benefits (OPEB) plans
was complete and accurate.
• (21-02) The University did not
properly records several transactions
and, as a result, did not properly
apply appropriate generally accepted
accounting principles (GAAP) to their
financial statement reporting process.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER
CENSUS DATA

The Western Illinois University
(University) did not have adequate
internal control over reporting its
census data and did not have a
reconciliation process to provide
assurance census data submitted to its
pension and other postemployment
benefits (OPEB) plans was complete and
accurate.
During testing, we noted the
following:
• The University had not performed an
initial complete reconciliation of its
census data recorded by SURS to its
internal records to establish a base
year of complete and accurate data.
• After establishing a base year, the
University had not developed a process
to annually obtain from SURS the
incremental changes recorded by SURS
in their census data records and
reconcile these changes back to the
University’s internal supporting
records.
In addition, we noted errors within
CMS’ allocation of OPEB-related
balances across the State’s funds,
public universities, and the Illinois
State Toll Highway Authority related
to a failure by CMS to account for a
separately financed specific OPEB
liability for certain groups of
employees at one component unit of the
State. The impact of these errors
resulted in the University restating
its beginning net position by
$2,538,761 as of July 1, 2020.
Even given these exceptions, we
performed detail testing of a sample
of employees and certain data analysis
tests of the total population of the
University’s census data transactions
reported to SURS and noted the
following:
• Two of 60 (3.33%) employees tested
had status changes that were not
reported to SURS at the occurrence of
the event. One employee went on a
leave of absence and another employee
changed status from leave of absence
to active status. (Finding 1, pages
71-74)
We recommended the University
implement controls to ensure census
data events are timely and accurately
reported to SURS. Further, we
recommended the University work with
SURS to annually reconcile its active
members’ census data from its
underlying records to a report of
census data submitted to the SURS’
actuary and CMS’ actuary, and after
completing an initial full
reconciliation, the University may
limit the annual reconciliations to
focus on the incremental changes to
the census data file from the prior
actuarial valuation, provided no risks
are identified that incomplete or
inaccurate reporting of census data
may have occurred during prior
periods. Any errors identified during
this process should be promptly
corrected by either the University or
SURS, with the impact of these errors
communicated to both SURS’s actuary
and CMS’ actuary. Finally, we
recommended the University work with
SURS and CMS to identify and address
any unremitted or erroneously remitted
employee and, if applicable, employer
contributions related to these events.

The University agreed with the finding
and stated they have submitted all
data to SURS as part of a baseline
reconciliation process and once this
baseline is established and complete,
an annual reconciliation process will
be created and enacted moving forward.

FAILURE TO APPLY APPROPRIATE GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES

The University did not properly
records several transactions and, as a
result, did not properly apply
appropriate generally accepted
accounting principles (GAAP) to their
financial statement reporting process.

We noted the following in our review
of the financial statements submitted
by the University with the GAAP
Package to the Office of the
Comptroller:

• The University acquired an ERP
system from a third-party vendor and
was involved in some development
activities related to the ERP system
for implementation. The University did
not capitalize $283,367 of application
development costs incurred.

• The University did not properly
conduct an evaluation of all the
agency funds in relation to the
implementation of GASB Statement No.
84, Fiduciary Activities. We noted the
University initially did not report
any fiduciary funds financial
statements and did not have related
disclosures on fiduciary funds in the
notes to the financial statements. We
requested the University provide their
documentation on their determination
of which funds are to be reported as
fiduciary funds. The University
reperformed their evaluation and
identified thirty-two (32) agency
funds previously accounted for in
governmental activities that should be
reported as custodial funds. These
custodial funds have assets totaling
$394,245, liabilities totaling
$75,213, and net position totaling
$319,032 that were not properly
reported in a Statement of Fiduciary
Net Position. In addition, total
beginning net position of $286,885,
additions totaling $166,730 and
deductions totaling $134,583 were not
reported in a Statement of Changes in
Fiduciary Net Position.

• The University did not properly
calculate and report the institutional
portion revenue on Higher Education
Emergency Relief Fund (HEERF) II
grants. The University met the
eligibility requirements for student
financial aid expenditures,
institutional expenditures and lost
revenues but did not recognize an
additional $2,056,678 of institutional
portion to the total HEERF II award
amount it is entitled to in accordance
with the HEERF II grant provisions. A
revision was made to the Schedule of
Expenditures and Federal Awards to
reflect the changes.

The University subsequently adjusted
the financial statements to correct
these errors, including the required
disclosures in the notes to the
financial statements (Finding 2, pages
75-76).

We recommended the University
establish procedures to ensure that
transactions which include special
terms and reporting be carefully
reviewed for proper accounting and
recognition of related transactions,
and, if necessary, accounting and
reporting guidance should be obtained
from technical resources to be in
conformity with generally accepted
accounting principles.

The University agreed with the finding
and confirmed that all adjustments are
reflected in the financial statements.

AUDITOR’S OPINION

The auditors stated the financial
statements of Western Illinois
University as of and for the year
ended June 30, 2021, are fairly stated
in all material respects.

This financial audit was conducted by
Adelfia LLC.

JANE CLARK
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

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