ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND
COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
Performed as Special Assistant Auditors
For the Auditor General, State of Illinois
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
TABLE OF CONTENTS
Page
Agency Officials 1
Management Assertion Letter 2
Compliance Report
Summary 3
Auditors’ Reports
Independent Accountants’ Report on State Compliance,
on Internal Control Over Compliance, and on
Supplementary Information for State Compliance
Purposes 4-6
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance
with Government Auditing Standards 7-8
Schedule of Findings, Recommendations and Responses
Current Findings – Government Auditing Standards &
State Compliance 9
Prior Findings Not Repeated 10
Financial Statement Report
Summary 11
Independent Auditors’ Report 12-13
Basic Financial Statements
Governmental Fund Balance Sheets / Statements
of Net Assets 14
Statement of Governmental Fund Revenues, Expenditures
and Change in Fund Balance / Statement of Activities –
Year Ended June 30, 2011 15
Statement of Governmental Fund Revenues, Expenditures
and Change in Fund Balance / Statement of Activities –
Year Ended June 30, 2010 16
Notes to Financial Statements 17-21
Supplementary Information for State Compliance Purposes
Summary 22
Supplementary Information
Fiscal Schedules and Analysis
Comparative Schedule of Receipts, Disbursements
and Fund Balance (Modified Accrual Basis)
Locally – Held Funds 23
Analysis of Operations
Agency Functions and Planning Program 24
Average Number of Employees 24
Service Efforts and Accomplishments (Unaudited) 25
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
1
AGENCY OFFICIALS
ILLINOIS ARTS COUNCIL FOUNDATION
Executive Director (5/15/11 to Present) Mr. Terry Scrogum
Acting Executive Director (3/1/11 to 5/14/11) Ms. Rhoda Pierce
Executive Director (2/1/11 to 2/28/11) Vacant
Executive Director (3/1/05 to 1/31/11) Mr. Terry Scrogum
Chief Fiscal Officer Ms. Yazoo Hall
Agency Offices are located at:
James R. Thompson Center
100 West Randolph
Suite 10-500
Chicago, IL 60601-3298
National City Bank Building
One North Old State Capitol Plaza
Suite 345
Springfield, IL 62701-1323
2
January 13, 2012
Illinois
~~J;{·L~s~~~
Council
.a• A&fltY Of
TR! STAn OF llliiOJS
Pat Quinn
Governor
McGreal & Company, PC
Certified Public Accountants
5740 West 95th Street
Shirley R Madigan
Chairman
Oak Lawn, Illinois 60453
Ladies and Gentlemen:
Terry A. Scrogum
Executive Director
We are responsible for the identification of, and compliance with, all aspects of laws,
regulations, contracts, or grant agreements that could have a material effect on the operations of
the Illinois Arts Council Foundation (Foundation). We are responsible for and we have established
and maintained an effective system of, internal controls over compliance requirements. We have
performed an evaluation of the Foundation's compliance with the following assertions during the
two-year period ended June 30, 2011. Based on this evaluation, we assert that during the years
ended June 30, 2011 and June 30, 2010, the Foundation has materially complied with the
assertions below.
A. The Foundation has obligated, expended, received and used public funds of the State in
accordance with the purpose for which such funds have been appropriated or otherwise
authorized by law.
B. The Foundation has obligated, expended, received and used public funds of the State in
accordance with any limitations, restrictions, conditions or mandatory directions imposed by
law upon such obligation, expenditure, receipt or use.
C. The Foundation has complied, in all material respects, with applicable laws and regulations,
including the State uniform accounting system. in its financial and fiscal operations.
D. State revenues and receipts collected by the Foundation are in accordance with
applicable laws and regulations and the accounting and recordkeeping of such revenues
and receipts is fair. accurate and in accordance with law.
E. Money or negotiable securities or similar assets handled by the Foundation on behalf of
the State or held in trust by the Foundation have been properly and legally administered,
and the accounting and recordkeeping relating thereto is proper, accurate and in
accordance with law.
Yours very truly,
illinois Arts Council Foundation
is er
icago, IL 60601-3298 \
- FAX- 312/814-1471 \
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
3
COMPLIANCE REPORT
SUMMARY
The compliance testing performed during this examination was conducted in accordance
with Government Auditing Standards and in accordance with the Illinois State Auditing Act.
ACCOUNTANTS’ REPORT
The Independent Accountants’ Report on State Compliance, on Internal Control Over
Compliance and on Supplementary Information for State Compliance Purposes does not contain
scope limitations, disclaimers, or other significant non-standard language.
SUMMARY OF FINDINGS
Compliance Prior Compliance
Number of Report Report
Findings 0 0
Repeated findings 0 0
Prior recommendations
implemented or not repeated 0 0
EXIT CONFERENCE
An exit conference occurred on January 6, 2012. Attending were Jose Roa, Office of the
Auditor General; Terry Scrogum, Executive Director, Illinois Arts Council Foundation: Yazoo
Hall, Chief Fiscal Officer, Illinois Arts Council Foundation: Thomas McGreal, Special Assistant
Audit Partner; and Michael Morrissey, Special Assistant Audit Manager.
McGREAL& CoMPANY, PC
CERTIFIED PUBLIC ACCOUNTANTS AND ADV ISORS
INDEPENDENT ACCOUNTANTS' REPORT ON STATE COMPLIANCE. ON INTERNAL
CONTROL OVER COMPLIANCE. AND ON
SUPPLEME TAR Y INFORMATION FOR STATE COMPLIANCE PURPOSES
Honorable William G. Holland
Auditor General
State of Illinois
Illinois Arts Council Foundation
Board of Directors
Chicago, Illinois
Compliance
As Special Assistant Auditors for the Auditor General, we have examined the State of Illinois,
Illinois Arts Council Foundation's compliance with the requirements listed below, as more fully
described in the Audit Guide for Financial Audits and Compliance Attestation Engagements of
Illinois State Agencies (Audit Guide) as adopted by the Auditor General, during the two years
ended June 30, 201 1. The management of the State of Illinois, Illinois Arts Council Foundation is
responsible for compliance with these requirements. Our responsibility is to express an opinion on
the State of Illinois, Illinois Arts Council Foundation's compliance based on our examination.
A. The State of Illinois, Illinois Arts Council Foundation has obligated, expended,
received, and used public funds of the State in accordance with the purpose for which
such funds have been appropriated or otherwise authorized by law.
B. The State of Illinois, Illinoi s Arts Council Foundation has obligated, expended,
received, and used public funds of the State in accordance with any limitations,
restrictions, conditions or mandatory directions imposed by law upon such obligation,
expenditure, receipt or use.
C. The State of Illinois, Illinois Arts Council Foundation has complied, in all material
respects, with applicable laws and regulations, including the State uniform accounting
system, in its financial and fiscal operations.
D. State revenues and receipts collected by the State of Illinois, Illinois Arts Council
Foundation are in accordance with applicable laws and regulations and the accounting
and recordkeeping of such revenues and receipts is fair, accurate and in accordance
with law.
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5
E. Money or negotiable securities or similar assets handled by the State of Illinois,
Illinois Arts Council Foundation on behalf of the State or held in trust by the State of
Illinois, Illinois Arts Council Foundation have been properly and legally administered
and the accounting and recordkeeping relating thereto is proper, accurate, and in
accordance with law.
We conducted our examination in accordance with attestation standards established by the
American Institute of Certified Public Accountants; the standards applicable to attestation
engagements contained in Government Auditing Standards issued by the Comptroller General of
the United States; the Illinois State Auditing Act (Act); and the Audit Guide as adopted by the
Auditor General pursuant to the Act; and, accordingly, included examining, on a test basis,
evidence about the State of Illinois, Illinois Arts Council Foundation’s compliance with those
requirements listed in the first paragraph of this report and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide a legal determination on the State of
Illinois, Illinois Arts Council Foundation’s compliance with specified requirements.
In our opinion, the State of Illinois, Illinois Arts Council Foundation complied, in all material
respects, with the requirements listed in the first paragraph of this report during the two years
ended June 30, 2011.
As required by the Audit Guide, immaterial findings excluded from this report have been reported
in a separate letter to your office.
Internal Control
Management of the State of Illinois, Illinois Arts Council Foundation is responsible for
establishing and maintaining effective internal control over compliance with the requirements
listed in the first paragraph of this report. In planning and performing our examination, we
considered the State of Illinois, Illinois Arts Council Foundation’s internal control over
compliance with the requirements listed in the first paragraph of this report as a basis for designing
our examination procedures for the purpose of expressing our opinion on compliance and to test
and report on internal control over compliance in accordance with the Audit Guide, issued by the
Illinois Office of the Auditor General, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on
the effectiveness of the State of Illinois, Illinois Arts Council Foundation’s internal control over
compliance.
A deficiency in an entity’s internal control over compliance exists when the design or operation of
a control over compliance does not allow management or employees, in the normal course of
performing their assigned functions, to prevent, or detect and correct, noncompliance with the
requirements listed in the first paragraph of this report on a timely basis. A material weakness in
an entity’s internal control over compliance is a deficiency, or combination of deficiencies, in
internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a requirement listed in the first paragraph of this report will not be prevented,
or detected and corrected, on a timely basis.
6
Our consideration of internal control over compliance was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control
over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We
did not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
As required by the Audit Guide, immaterial findings excluded from this report have been reported
in a separate letter to your office.
Supplementary Information for State Compliance Purposes
As Special Assistant Auditors for the Auditor General, we have audited the financial statements of
the governmental activities and the major fund of the State of Illinois, Illinois Arts Council
Foundation as of and for the years ended June 30, 2011 and 2010, which collectively comprise the
State of Illinois, Illinois Arts Council Foundation’s basic financial statements, and have issued our
report thereon dated January 13, 2012. The accompanying supplementary information, as listed in
the table of contents as Supplementary Information for State Compliance Purposes, is presented
for purposes of additional analysis and is not a required part of the basic financial statements of the
State of Illinois, Illinois Arts Council Foundation. The 2011 and 2010 Supplementary Information
for State Compliance Purposes, except for that portion marked “unaudited” on which we express
no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic
financial statements for the year ended June 30, 2011, and 2010, taken as a whole.
Other auditors previously audited, in accordance with auditing standards generally accepted in the
United States, the State of Illinois, Illinois Arts Council Foundation’s basic financial statements for
the years ended June 30, 2009 and June 30, 2008. In their report dated January 5, 2010, they
expressed an unqualified opinion on the financial statements. In their opinion, the 2009
Supplementary Information for State Compliance Purposes, except for the portion marked
“unaudited”, was fairly stated in all material respects in relation to the basic financial statements
for the year ended June 30, 2009 and 2008, taken as a whole.
This report is intended solely for the information and use of the Auditor General, the General
Assembly, the Legislative Audit Commission, the Governor, agency management and the Board of
Directors and is not intended to be and should not be used by anyone other than these specified
parties.
McGreal & Company, PC
January 13, 2012
McGREAL& CoMPANY, PC
CERTIFIED PUBLIC ACCOUNTANTS AND ADVI SORS
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
Illinois Arts Council Foundation
Board of Directors
Chicago, Illinois
As Special Assistant Auditors for the Auditor General, we have audited the financial
statements of the governmental activities and major fund of the Illinois Arts Council Foundation, as of
and for the years ended June 30, 201 1 and June 30, 2010, and have issued our report thereon dated
January 13, 2012. We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits contained m
Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of the State of Illinois, Illinois Arts Council Foundation is responsible for
establishing and maintaining effective internal control over financial reporting. In planning and
performing our audit, we considered the State of Illinois, Illinois Arts Council Foundation's internal
control over financial reporting of the governmental fund as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the State of Illinois, Illinois Arts Council
Foundation 's internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the State of Illinois, Illinois Arts Council Foundation's internal control over
financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the norn1al course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis.
A material weakness is a deficiency, or combination of deficiencies, in internal control, such
that there is a reasonable possibility that a material misstatement of the entity's financial statements
will not be prevented, or detected and corrected on a timely basis.
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8
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies or material
weaknesses. We did not identify any deficiencies in internal control over financial reporting of the
governmental fund that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the State of Illinois, Illinois Arts
Council Foundation’s financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
We noted certain matters that we reported to management of the State of Illinois, Illinois Arts
Council Foundation in a separate letter dated January 13, 2012
This report is intended solely for the information and use of the Auditor General, the General
Assembly, the Legislative Audit Commission, the Governor, agency management and the Board of
Directors, and is not intended to be and should not be used by anyone other than these specified
parties.
McGreal & Company, PC
January 13, 2012
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
9
SCHEDULE OF FINDINGS, RECOMMENDATIONS AND RESPONSES
Current Findings – Government Auditing Standards & State Compliance
There were no current findings noted during the Financial Audit and Compliance Examination for the
two years ended June 30, 2011.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
10
PRIOR FINDINGS
There were no prior findings during the Financial Audit and Compliance Examination for the two
years ended June 30, 2009.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
11
FINANCIAL STATEMENT REPORT
SUMMARY
The audit of the accompanying financial statements of the State of Illinois, Illinois Arts Council
Foundation was performed by McGreal & Company, PC.
Based on their audit, the auditors expressed an unqualified opinion on the agency’s financial
statements.
McGREAL~CoMPANY, PC
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
INDEPENDENT AUDITORS' REPORT
Honorable William G. Holland
Auditor General
State of Illinois
Illinois Arts Council Foundation
Board of Directors
Chicago, Illinois
As Special Assistant Auditors for the Auditor General, we have audited the accompanying
financial statements of the governmental activities and major fund of the State of Illinois, Illinois Arts
Council Foundation, a component unit of the State of Illinois, as of and for the years ended June 30,
20 11 and June 30, 2010, which collectively comprise the Illinois Arts Council Foundation's basic
financial statements as listed in the table of contents. These financial statements are the responsibility
of the State of Illinois, Illinois Arts Council Foundation's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and the significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
opmwns.
As discussed in Note 2, the financial statements of the State of Illinois, Illinois Arts Council
Foundation are intended to present the financial position and changes in financial position of only that
portion of the governmental activities, and the major fund of the State that is attributable to the
transactions of State of Illinois, Illinois Arts Council Foundation. They do not purport to, and do not,
present fairly the financial position of the State of Illinois as of June 30,2011 and June 30,2010 and
the changes in its financial position for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In our opinion, the financial statements refen ed to above present fairly, in all material respects,
the respective financial position of the governmental activities and the major fund of the State of
Illinois, Ill inois Arts Council Foundation, as of June 30, 20 11 and June 30, 2010, and the respective
changes in financial position thereof for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
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13
In accordance with Government Auditing Standards, we have also issued a report dated
January 13, 2102 on our consideration of the State of Illinois, Illinois Arts Council Foundation’s
internal control over financial reporting and on our tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
The State of Illinois, Illinois Arts Council Foundation has not presented a management’s
discussion and analysis and budgetary comparison information for the Illinois Arts Council General
Fund that accounting principles generally accepted in the United States of America has determined is
necessary to supplement, although not required to be part of, the financial statements.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the State of Illinois, Illinois Arts Council Foundation’s basic financial
statements. The financial related schedules and analysis of operations are presented for purposes of
additional analysis and are not a required part of the financial statements. The financial related
schedules and analysis of operations have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole. The service efforts and accomplishments have
not been subjected to the auditing procedures applied in the audit of the basic financial statements, and
accordingly, we express no opinion on them.
This report is intended solely for the information and use of the Auditor General, the General
Assembly, the Legislative Audit Commission, the Governor, the Comptroller, agency management
and the Board of Directors, and is not intended to be and should not be used by anyone other than
these specified parties.
McGreal & Company, PC
January 13, 2012
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
GOVERNMENTAL FUND BALANCE SHEETS/STATEMENTS OF NET ASSETS
For the Fiscal Years Ended June 30, 2011 and 2010
14
2011 2010
Assets:
Cash and cash equivalents $ 82,956 $ 80,355
Total Assets $ 82,956 $ 80,355
Fund Balances / Net Assets:
Unassigned / Unrestricted $ 82,956 $ 80,355
Total Net Assets $ 82,956 $ 80,355
The accompanying notes are an integral part of these financial statements.
Program revenue
Operating grants Net
Expenditures / and (expense)
FUNCTIONS / PROGRAMS Expenses Contributions revenue
Arts Promotion $ 669 $ 150 $ ( 519)
General revenues:
Contributions not restricted to
specific programs 1,762
Interest income 1,358
3,120
Change in net assets 2,601
Fund balance / net assets - beginning 80,355
Fund balance / net assets - ending $ 82,956
(A Component Unit of the State of Illinois)
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
STATEMENT OF GOVERNMENTAL FUND REVENUES, EXPENDITURES
AND CHANGE IN FUND BALANCES / STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2011
Total general revenues
The accompanying notes are an integral part of these financial statements.
15
Program revenue
Operating grants Net
Expenditures / and (expense)
FUNCTIONS / PROGRAMS Expenses Contributions revenue
Arts Promotion $ 840 $ 2,150 $ 1,310
General revenues:
Contributions not restricted to
specific programs -
Interest income 448
Total general revenues 448
Change in net assets 1,758
Fund balance / net assets - beginning 78,597
Fund balance / net assets - ending $ 80,355
For the Year Ended June 30, 2010
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
STATEMENT OF GOVERNMENTAL FUND REVENUES, EXPENDITURES
AND CHANGE IN FUND BALANCES / STATEMENT OF ACTIVITIES
The accompanying notes are an integral part of these financial statements.
16
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
17
NOTE 1 - ORGANIZATION
The Illinois Arts Council Foundation (Foundation) was incorporated in Illinois on May 8, 1967
as a not-for-profit corporation. The Foundation was organized to receive contributions from
individuals and organizations to further charitable, literary and educational purposes in the way
of grants. The Foundation is a locally held nonshared Governmental Fund.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Foundations’ financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP), as prescribed by the Governmental
Accounting Standards Board (GASB). To facilitate the understanding of data included in the
financial statements, summarized below are the more significant accounting policies.
a. Financial Reporting Entity
As defined by GAAP, the financial reporting entity consists of a primary government, as
well as its component units, which are legally separate organizations for which the
elected officials of the primary government are financially accountable. Financial
accountability is defined as:
1) Appointment of a voting majority of the component unit’s board and with
(a) the primary government’s ability to impose its will, or (b) the possibility that
the component unit will provide a financial benefit to or impose a financial
burden on the primary government; or,
2) Fiscal dependency on the primary government
Based upon the required criteria, the Foundation has no component units. However, the
Foundation is a component unit of the State of Illinois. Therefore, the financial
statements of the Foundation are included in the financial statements of the State of
Illinois. The State of Illinois’ Comprehensive Annual Financial Report may be obtained
by writing to the State Comptroller’s Office, Financial Reporting Department, 325 West
Adams Street, Springfield, Illinois 62704-1871.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
`
18
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
b. Basis of Presentation
The financial activities of the Foundation, which consist only of governmental activities,
are reported as a component unit in the State of Illinois’ Comprehensive Annual
Financial Report. For its reporting purposes, the Foundation has combined its
presentation of the fund financial statements and the government-wide financial
statements. There are no differences between the fund financial data and the
government-wide data, and therefore, no reconciliation is presented herein. A brief
description of the Foundation’s government-wide and fund financial statements is as
follows:
Government-Wide Statements: The Government-Wide Statement of Net Assets
and Statement of Activities report the overall financial activity of the Foundation.
The financial activities of the Foundation consist only of governmental activities,
which are primarily supported by donations.
The Statement of Activities demonstrates the degree to which the direct expenses
of a given function (i.e. general government) are offset by program revenues.
Direct expenses are those that are clearly identifiable with a specific function.
Program revenues include grants and contributions that are restricted to meeting
the operational or capital requirements of a particular program. Revenues that are
not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information
about the Foundation’s General Fund, utilizing the basis of accounting described
in Note 2(c) below.
The Foundation administers the following major governmental fund:
General Fund: This is the Foundation’s primary operating fund. It accounts for
all financial resources of the Foundation. The services administered by the
Foundation and accounted for in this fund include the promotion of arts among
the residents of the State of Illinois.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
`
19
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Measurement Focus and Basis of Accounting
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded at the time liabilities are incurred, regardless of when
the related cash flow takes place. Nonexchange transactions, in which the Foundation
gives (or receives) value without directly receiving (or giving) equal value in exchange,
includes grants and donations. On an accrual basis, revenue from grants, entitlements
and similar items are recognized in the fiscal year in which all eligibility requirements
imposed by the provider have been met.
Governmental funds are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they
are both measurable and available. Revenues are considered to be available when they
are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the Foundation considers revenues to be available if
they are collected within 60 days of the end of the current fiscal year. Expenditures
generally are recorded when the liability is incurred, as required under accrual
accounting.
Private-sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in the government-wide financial statements to the extent
that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Boards.
d. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and cash in banks, as well as certificates
of deposit held in the bank in the name of Illinois Arts Council Foundation.
e. Net Assets
In the government-wide financial statements, equity is displayed as follows:
Unrestricted – This consists of net assets that do not meet the definition of
“restricted”, which includes any net assets that are legally restricted by outside
parties or by law through constitutional provisions or enabling legislation.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
`
20
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Fund Balances
The Governmental Accounting Standards Board (GASB) has issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54). Fund
balance is divided into five classifications based primarily on the extent to which the
governmental entity is bound to observe constraints imposed upon the use of the
resources in the governmental funds. The classifications are as follows:
1. Nonspendable fund balance category includes amounts that cannot be spent because
they are not in spendable form, or legally or contractually required to be maintained
intact. The “not in spendable form” criterion includes items that are not expected to
be converted to cash. It also includes the long-term amount of interfund loans.
2. Restricted fund balance category includes amounts that can be spent only for the
specific purposes stipulated by constitution, external resource providers, or through
enabling legislation.
3. Committed fund balance classification includes amounts that can be used only for the
specific purposes determined by a formal action of the government’s highest level of
decision-making authority.
4. Assigned fund balance classification are intended to be used by the government for
specific purposes but do not meet the criteria to be classified as restricted or
committed. In governmental funds other than the general fund, assigned fund balance
represents the remaining amount that is not restricted or committed.
5. Unassigned fund balance is the residual classification for the government’s general
fund and includes all spendable amounts not contained in the other classifications. In
other funds, the unassigned classification should be used only to report a deficit
balance resulting from overspending for specific purposes for which amounts had
been restricted, committed, or assigned.
g. Use of Estimate
The preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
`
21
NOTE 3 – DEPOSITS AND INVESTMENTS
The State Treasurer is the custodian of the State’s cash and cash equivalents for funds
maintained in the State Treasury. The Foundation independently manages cash and cash
equivalents maintained outside the State Treasury.
Cash on deposit for locally held funds at June 30, 2011 and June 30, 2010 were as follows:
Carrying Bank
Fund Amount Balance Description
June 30, 2011:
Chase Bank – Checking $ 6,826 $ 6,912 Insured (FDIC)
Bank of America – Savings 3,064 3,064 Insured (FDIC)
Bank of America – Certificates of Deposit 73,066 73,066 Insured (FDIC)
$ 82,956 $ 83,042
June 30, 2010:
Chase Bank – Checking $ 3,163 $ 3,163 Insured (FDIC)
Bank of America – Savings 484 484 Insured (FDIC)
Bank of America – Certificates of Deposit 76,708 76,708 Insured (FDIC)
$ 80,355 $ 80,355
NOTE 4 – RELATED PARTY TRANSACTIONS
The Foundation is a separate entity from the Illinois Arts Council (Council). However, the
Council has agreed to provide office space, employees, and equipment that enable the
Foundation to conduct normal business activities.
The Foundation and Council are accounted for separately, and no funds are transferred between
the two organizations.
The Foundation and the Council share a common Board of Directors.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
22
SUPPLEMENTARY INFORMATION FOR STATE COMPLIANCE PURPOSES
SUMMARY
Supplementary Information for State Compliance Purposes presented in this section of
the report includes the following:
Fiscal Schedules and Analysis:
Comparative Schedule of Cash Receipts, Disbursements and Fund Balances
(Modified Accrual Basis) – Locally Held Funds
Analysis of Operations
Agency Functions and Planning Program
Average Number of Employees
Service Efforts and Accomplishments (Unaudited)
The accountants’ report that covers the Supplementary Information for State Compliance
Purposes presented in the Compliance Report Section states that it has been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in the auditors’
opinion, except for the portion marked “unaudited”, on which they express no opinion, it is fairly
stated that in all material respects in relation to the basic financial statements taken as a whole.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL RELATED SCHEDULES
For the Years Ended June 30,
23
COMPARATIVE SCHEDULE OF RECEIPTS, DISBURSEMENTS AND FUND BALANCE
(MODIFIED ACCRUAL BASIS) – LOCALLY-HELD FUNDS
2011 2010
Beginning Balance of cash and certificates $ 80,355 $ 78,597
Total funds received during the fiscal year 3,270 2,598
Total funds disbursed during the fiscal year 669 840
Ending Balance of cash and certificates
of deposit $ 82,956 $ 80,355
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
ANALYSIS OF OPERATIONS
For the Two Years Ended June 30, 2011
24
AGENCY FUNCTIONS AND PLANNING PROGRAM
Agency Functions
The Illinois Arts Council Foundation (Foundation) was incorporated in 1967 as a not-for-profit
corporation. The Foundation serves the Illinois Arts Council (Council) constituency by augmenting
limited state funds for the purpose of arts awareness.
The primary function of the Foundation is to distribute contributions received in the form of grants to
increase the awareness of Council’s programs and services through publications, public forms,
promotional activities and events.
Agency Planning Program
The Foundation utilizes the same formal planning program as the Council documented in their Strategic
Plan 2007-2012. The Council and Foundation share board members. These board members meet
periodically, and actively plan all aspects of the Foundation. The current members are:
Shirley R. Madigan – Chairman Lisa M. Dent Bielefeldt
Andy Van Meter – Secretary Jennifer Levine
Rhonda A. Pierce – Vice Chairman Peggy A. Montes
Virginia G. Bobins Barry E. Moore, Ph.D.
Patrice Bugelas – Brandt Beth Boosalis Davis
William E. Brattain, Ph.D. Elaine C. Muchin
Christina Kemper Gidwitz Honorable Sheila M. O’Brien
Jodie Shagrin Kavensky Valerie King
Howard A. Tullman Henry Godinez
Donald T. Wiener Desiree Grode
Carmen Lonstein
AVERAGE NUMBER OF EMPLOYEES
2011 2010 2009
Average Number of Employees 0 0 0
Note: The administration and staff of all Foundation activity is performed by employees of the Council.
STATE OF ILLINOIS
ILLINOIS ARTS COUNCIL FOUNDATION
(A Component Unit of the State of Illinois)
ANALYSIS OF OPERATIONS
For the Two Years Ended June 30, 2011
25
SERVICE EFFORTS AND ACCOMPLISHMENTS – (Unaudited)
The Illinois Arts Council Foundation’s mission is to augment limited state funds for the purpose of
outreach and communication initiatives within the arts community and the general public.
The Foundation’s mission is accomplished through the capacity to receive and disperse private
donations not authorized for use by a state agency.
Contributions to the Illinois Arts Council Foundation are used to increase awareness of Illinois Arts
Council programs and services through publications, public forums, promotional activities and events.
