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TMCNet:  Illinois Auditor General Issues Northeastern Illinois University- Illinois Conservation Foundation- Financial Audit and Compliance Examination

[April 22, 2014]

Illinois Auditor General Issues Northeastern Illinois University- Illinois Conservation Foundation- Financial Audit and Compliance Examination

(Targeted News Service Via Acquire Media NewsEdge) SPRINGFIELD, Ill., April 22 -- The Illinois Auditor General issued the following audit report summary: Summary of Findings: Total this audit: 5 Total last audit: 3 Repeated from last audit: 3 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 Full Report are also available on the worldwide web at www.auditor.illinois.gov SYNOPSIS -The Foundation's financial reporting process is lacking sufficient internal controls.


-All of the Foundation's accounting functions are performed by one employee creating a segregation of duties issue.

-The Foundation's internal controls related to accounting transactions should be enhanced.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO IMPROVE FINANCIAL REPORTING PROCESS The Illinois Conservation Foundation (Foundation) does not have sufficient internal controls over the financial reporting process.

Several errors were identified during the audit of the Foundation's financial statements. The Foundation's financial statements were adjusted for the following reporting errors: -The Foundation failed to make numerous adjusting entries to present the financial statements in accordance with Generally Accepted Accounting Principles (GAAP).

-The Foundation had realized and unrealized gains posted to opposite accounts in error. A net audit adjustment of $89,672 was recorded to correct the balances in the realized and unrealized gain accounts. (Finding 1, pages 11-12) This finding was first reported in 2011.

We recommended the Foundation implement additional internal control procedures to ensure financial statements are prepared in accordance with GAAP.

Foundation management accepted our recommendation. (For the previous Foundation response, see Digest Footnote #1.) INADEQUATE SEGREGATION OF DUTIES The Foundation lacks adequate segregation of duties over its accounting functions.

The Foundation has three employees, an Executive Director, a Chief Financial Officer, and a property manager. Because of the small size of the Foundation staff, all of the accounting functions are performed by one employee which creates a segregation of duties issue. (Finding 2, page 13) This finding was first reported in 2009.

We recommended the Board of Directors remain involved in the financial affairs of the Foundation to provide oversight and independent review functions.

Foundation management accepted our recommendation. (For the previous Foundation response, see Digest Footnote #2.) NEED TO ENHANCE CONTROLS OVER ACCOUNTING TRANSACTIONS The Foundation did not maintain adequate internal controls over accounting transactions. The following weaknesses were noted during testing: -The Foundation's adjusting journal entries did not have evidence of review and approval by an individual independent of the preparer.

-The Foundation's bank reconciliations did not have evidence of review and approval by an individual independent of the preparer.

- The Foundation does not mark invoices "paid" to prevent double payment. (Finding 3, pages 14-15) We recommended the Foundation document reviews of journal entries and bank reconciliations on the face of the document with the reviewer's initials and date of review. Also, the Foundation should indicate that invoices have been marked "paid" to ensure that duplicate payments are not made.

Foundation management accepted our recommendation.

OTHER FINDINGS The remaining findings pertain to inadequate controls over personal services and noncompliance with the Accountability for the Investment of Public Funds Act. Auditors will review the Foundation's progress towards the implementation of all the recommendations in the next engagement.

AUDITORS' OPINION The auditors expressed an unmodified opinion on the Foundation's financial statements for the year ended June 30, 2013.

WILLIAM G. HOLLAND Auditor General WGH:APA SPECIAL ASSISTANT AUDITORS Kemper CPA Group, LLP was our special assistant auditor for this engagement.

DIGEST FOOTNOTES #1 - NEED TO IMPROVE FINANCIAL REPORTING PROCESS - Previous Foundation Response 2012: The Foundation agrees.

#2 - INADEQUATE SEGREGATION OF DUTIES - Previous Foundation Response 2012: The Foundation agrees.

CC AutoTriage5rn-140423-30FurigayJane-4711020 30FurigayJane (c) 2014 Targeted News Service

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