Illinois Conservation Foundation. Financial Audit and Compliance Examination for the Year Ended June 30, 2011

              Office of the Auditor General, Iles Park Plaza, 740 E. Ash St., Springfield, IL 62703 • Tel: 217-782-6046 or TTY 888-261-2887
This Report Digest and a Full Report are also available on the internet at www.auditor.illinois.gov
ILLINOIS CONSERVATION FOUNDATION
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended: June 30, 2011
Summary of Findings:
Total this audit:
Total last audit:
Repeated from last audit:
4
5
4
Release Date: February 9, 2012
SYNOPSIS
• The Illinois Conservation Foundation’s (Foundation) year-end financial statements contained weaknesses and inaccuracies.
• The Foundation did not present information on the internet concerning their investment of public funds as required by the Accountability for the Investment of Public Funds Act.
{Expenditures and Activity Measures are summarized on the reverse page.}ii
STATEMENT OF ACTIVITIES (Governmental Activities)
Program Revenue:
Charges for Goods..........................................................................................
47,342$
48,243$
Operating Grants and Contributions - General Administrative......................
426,511
307,983
Operating Grants and Contributions - Natural Resources & Recreation........
5,629,737
1,542,929
Capital Grants and Contributions - Natural Resources & Recreation............
77,487
11,519
Total Program Revenue...............................................................................
6,181,077$
1,910,674$
Expenses:
General Administrative...................................................................................
503,300$
254,642$
Natural Resources and Recreation..................................................................
1,546,989
1,710,377
Total Expenditures......................................................................................
2,050,289$
1,965,019$
Net (Expense) Revenue....................................................................................
4,130,788$
(54,345)$
General Revenue:
Unrestricted Realized Gain.............................................................................
9,999$
63,491$
Unrestricted Investment - Unrealized Gain....................................................
324,022
122,265
Unrestricted Investment Earnings...................................................................
85,736
82,605
Change in Net Assets......................................................................................
4,550,545$
214,016$
Net Assets, Beginning of Year........................................................................
2,959,539
2,745,523
Net Assets, End of Year..................................................................................
7,510,084$
2,959,539$
STATEMENT OF NET ASSETS (Governmental Activities)
FY 2011
FY 2010
Assets:
Cash and Cash Equivalents..........................................................................
554,692$
426,471$
Accounts Receivable....................................................................................
11,687
21,227
Accrued Investment Income........................................................................
11,418
12,474
Prepaid Expenses.........................................................................................
4,884
6,980
Investments..................................................................................................
2,552,437
2,529,600
Capital Assets, Net.......................................................................................
4,397,224
-
Total Assets...........................................................................................
7,532,342$
2,996,752$
Liabilities:
Accounts Payable and Accrued Expenses..................................................
17,984$
31,651$
Accrued Expenses.......................................................................................
4,274
5,562
Total Liabilities.......................................................................................
22,258$
37,213$
Net Assets:
Natural Resources and Recreation - Restricted...........................................
1,067,636$
1,239,246$
Endowment/Nonexpendable - Restricted....................................................
111,400
49,701
Unrestricted..................................................................................................
1,933,824
1,670,592
Invested in Capital Assets,Net of Related Debt...........................................
4,397,224
-
Total Net Assets......................................................................................
7,510,084$
2,959,539$
FOUNDATION CHIEF EXECUTIVES
During Audit Period: Mark Spangler Chairman: Marc Miller
Currently: Mark Spangler Chairman: Marc Miller
ILLINOIS CONSERVATION FOUNDATION
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For The Year Ended June 30, 2011
FY 2010
FY 2011iii
Financial statements contained inaccuracies
$4.5 million of donated assets not included in financial statements
Management accepted recommendation.
Noncompliance with reporting requirement
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
FINANCIAL STATEMENT PREPARATION
The Illinois Conservation Foundations (Foundation) year-end financial statements contained weaknesses and inaccuracies.
Several errors were identified during the audit of the Foundation’s draft financial statements. The Foundation’s financial statements were adjusted for the following reporting errors:
• An audit adjustment identified by management totaling $4.5 million was made by the auditors to record a donation of land, building and equipment. As a result, revenue and assets was increased $4.5 million.
• The Foundation allocated the incorrect amount of on-behalf payments paid by the Illinois Department of Natural Resources on their behalf. The Department failed to include the salary and benefit information paid to the Director’s assistant.
• The Foundation did not complete the comparative schedule of receipts, disbursements and fund balance (cash basis). (Finding 1, page 14)
We recommended the Foundation implement additional internal control procedures to ensure financial statements are prepared in an accurate manner.
Foundation management accepted our recommendation.
NONCOMPLIANCE WITH ACCOUNTABILITY FOR THE INVESTMENT OF PUBLIC FUNDS ACT (ACT)
The Foundation did not present information on the internet concerning their investments of public funds as required by the Act. The Foundation had various investment balances (debt securities, equity securities, commodities, mutual funds, real estate) totaling $2,552,436 that would be classified as public funds at June 30, 2011.
The Accountability for the Investment of Public Funds Act (30 ILCS 237) requires each State agency to make available on the internet, and update as least monthly by the 15 of the month, sufficient information concerning the iv
Foundation disagreed with our recommendation
investment of any public funds held by the State Agency to identify the amount of funds held by the agency on the last day of the preceding month or the average daily balance for the preceding month, the total monthly investment income and the yield for all funds invested, the asset allocation of the investments, and a complete listing of all approved depository institutions, commercial paper issuers, and broker-dealers approved to do business with the agency. (Finding 2, pages 15-16) This finding was first reported in 2008.
We recommended the Foundation comply with the requirements of the Act and ensure the information concerning the investment of public funds is updated monthly by the 15th of each month.
Foundation management respectfully disagreed with our recommendation and stated they will seek legislation to clarify its exemption from the Investment of Public Funds Act. (For the previous Foundation response, see Digest Footnote #1.)
OTHER FINDINGS
The remaining findings pertain to: 1) disbursement processing weaknesses and 2) segregation of duties. We will follow up on these findings during our next audit of the Foundation.
AUDITORS’ OPINION
The auditors state the financial statements of the Illinois Conservation Foundation for the year ended June 30, 2011 are fairly stated in all material respects.
___________________________________
WILLIAM G. HOLLAND
Auditor General
WGH:JSC
AUDITORS ASSIGNED
Kyle E. McGinnis, CPA was our special assistant auditor.v
DIGEST FOOTNOTES
#1 – NONCOMPLIANCE WITH ACCOUNTABILITY FOR THE INVESTMENT OF PUBLIC FUNDS ACT (ACT) – Previous Foundation Response
2010: The Foundation respectfully disagrees. The Foundation is already exempt from the Investment of Public Funds Act and will seek legislation to clarify exemption from the subject Act.