THE ILLINOIS LITERACY 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
THE ILLINOIS LITERACY 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 4
Auditors' Reports
Independent Accountants’ Report on State Compliance,
on Internal Control Over Compliance, and on
Supplementary Information for State Compliance Purposes 5
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 8
Financial Statement Report
Summary 10
Independent Auditors’ Report 11
Basic Financial Statements
Governmental Fund Balance Sheets/Statements of Net Assets 13
Statement of Governmental Fund Revenues, Expenditures, and
Change in Fund Balance/Statement of Activities – Year Ended June 30, 2011 14
Statement of Governmental Fund Revenues, Expenditures, and
Changes in Fund Balance/Statement of Activities – Year Ended June 30, 2010 15
Notes to Financial Statements 16
Supplementary Information for State Compliance Purposes
Summary 20
Fiscal Schedules and Analysis
Comparative Schedule of Revenues and Expenses 21
Analysis of Significant Variations in Revenue 22
Analysis of Significant Variations in Expenditures 23
Analysis of Operations
Functions and Planning Program 24
Statistical Highlights 26
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
AGENCY OFFICIALS
Ex Officio Director Honorable Jesse White, Secretary of State
Executive Director Thomas N. Benigno
President Anthony Taylor
Vice President Caroline Sanchez Crozier
Treasurer/Secretary Dr. Roberto R. Castaneda
Agency offices are located at:
100 West Randolph Street
Chicago, IL 60601
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HONORABLE JESSE WHITE
Secretary of State
State Librarian
Ex-Officio Director
BOARD OF DIRECTORS
President
Anthony Taylor
Vice-President
Caroline Sanchez Crozier
Treasurer
Dr. Roberto Castaneda
Recording Secretary
Joyce 0. Calvert
George Burciaga
Sunny Chico
Richard Dent
Roderick Hawkins
Michael C. Mroz
Crystal Reynolds
Nikki Zollar
Members Emeritus
Commissioner Mary Dempsey
John Rosales
Thomas N. Benigno
Executive Director
Deputy Secretary of State/Chief of Staff
The Illinois Literacy Foundation
James R. Thompson Center
P.O. Box 64386
Chicago, Dlinois 60664-0386
MANAGEMENT ASSERTION LEITER
February 8, 2012
SikichLLP
132 S. Water Street, Suite 300
Decatur, Illinois 62525
Ladies and Gentlemen:
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
Literacy 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, 2010
and June 30, 2011, 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.
The Mission of the Illinois Literacy Foundation is to partner with the corporate and private sectors to enhance literacy awareness and support literacy programs
throughout the State of Illinois. Therefore, in collaboration with corporate and private entities, local businesses and state agencies, the Foundation strives to
promote the enjoyment of reading and learning by addressing the literacy needs of the people of Illinois.
Printed by authority of the State of Illinois. December 2011 - 100
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E. Money or negotiable securities or similar assets handled by the
Foundation on behalf of the State or held in h·ust 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,
The Illinois Literacy Foundation
~knH/1!
~~
Nathan Maddox, Legal Counsel
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
COMPLIANCE REPORT
SUMMARY
For the Two Years Ended June 30, 2011 and 2010
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’ REPORTS
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
Current Prior
Number of Report Report
Findings 0 0
Repeated findings 0 0
Prior recommendations implemented
or not repeated 0 0
SCHEDULE OF FINDINGS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
There were no current findings and recommendations.
FINDINGS (STATE COMPLIANCE)
There were no current findings and recommendations.
PRIOR FINDINGS NOT REPEATED
There were no prior findings.
EXIT CONFERENCE
The Illinois Literacy Foundation waived a formal exit conference in a communication dated
February 7, 2012.
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~Sikich.
Certified Public Accountants & Advisors
Members of American Institute of
Certified Public Accountants
132 South Water, Suite 300, P.O. Box 1460 • Decatur, Illinois 62525-1460
INDEPENDENT ACCOUNTANTS' REPORT ON STATE COMPLIANCE,
ON INTERNAL CONTROL OVER COMPLIANCE, AND ON
SUPPLEMENTARY INFORMATION FOR STATE COMPLIANCE PURPOSES
Honorable William G. Holland
Auditor General
State of Illinois
and
Board of Directors
The Illinois Literacy Foundation
Compliance
As Special Assistant Auditors for the Auditor General, we have examined The Illinois Literacy
Foundation's (the Foundation), a component unit of the State of Illinois, 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, 2011. The management of the Foundation is responsible for
compliance with these requirements. Our responsibility is to express an opinion on the Foundation's
compliance based on our examination.
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.
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
Page 6
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 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 Foundation's compliance
with specified requirements.
In our opinion, the Foundation complied, in all material respects, with the compliance requirements listed
in the first paragraph of this report during the two years ended June 30, 2011.
Internal Control
Management of the 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 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 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.
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.
There were no immaterial findings that have been excluded from this report.
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 Foundation as of and for the years ended June 30,2011
and June 30, 2010, which collectively comprise the Foundation's basic financial statements, and have issued
our report thereon dated February 8, 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 Foundation. The
2011 and 2010 Supplementary Information for State Compliance Purposes 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 years ended June 30,
2011 and 201 0, taken as a whole.
Page 7
We have also previous ly audited, in accordance with auditing standards generally accepted in the United
States, the Foundation's bas ic financial statements for the year ended June 30, 2009. In our report dated
April 8, 20 I 0, we expressed unqualified opinions on the respective financial statements of the
governmental activities and the major fund. ln our opinion, the 2009 Supplementary Information for
State Compliance Purposes is fairly stated in all material respects in relation to the basic financial
statements for the year ended June 30, 2009, 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 Govemor, the Secretary of State, and the board of directors and
management of the Foundation, and is not intended to be and should not be used by anyone other than these
specified parties.
Decatur, Illinois
February 8, 2012
Page 8
Certified Public Accountants & Advisors
Members of American Institute of
Certified Public Accountants
132 South Water, Suite 300, P.O. Box 1460 • Decatur, Illinois 62525-1460
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MA TIERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
and
Board of Directors
The Illinois Literacy Foundation
As Special Assistant Auditors for the Auditor General, we have audited the financial statements of the
governmental activities and the major fund of The Illinois Literacy Foundation (the Foundation), a
component unit of the State of Illinois, as of and for the years ended June 30, 2011 and June 30, 2010,
which collectively comprise the Foundation's basic financial statements and have issued our report thereon
dated February 8, 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 in Government
Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of the Foundation is responsible for establishing and maintaining effective internal control
over financial reporting. In planning and performing our audit, we considered the Foundation's internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Foundation's internal control over financial reporting. Accordingly, we do not express
an opinion on the effectiveness of the 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 normal 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.
Page 9
Our consideration of internal control over financial rep01ting was for the limited purpose described in the
first paragraph of this section and was not designed to identifY a ll 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 that we consider to be material
weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Foundation's financial statements are free of
material misstatement, we performed tests of its compliance with certain provis ions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and materia l 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.
This report is intended sole ly for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, the Secretary of State, and the board of directors and
management of the Foundation, and is not intended to be and should not be used by anyone other than these
spec ified parties.
Decatur, fllinois
February 8, 2012
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
FINANCIAL STATEMENT REPORT
SUMMARY
For the Years Ended June 30, 2011 and 2010
The audit of the accompanying financial statements of the Illinois Literacy Foundation was performed by
Sikich LLP.
Based on their audit, the auditors expressed unqualified opinions on the Foundation’s basic financial
statements.
Page 10
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~Sikich~
Certified Public Accountants & Advisors
Members of American Institute of
Certified Public Accountants
132 South Water, Suite300, P.O. Box 1460 • Decatur, Illinois62525-1460
Honorable William G. Holland
Auditor General
State of Illinois
and
Board of Directors
The Illinois Literacy Foundation
INDEPENDENT AUDITORS' REPORT
As Special Assistant Auditors for the Auditor General, we have audited the accompanying financial
statements of the governmental activities and the major fund of The Illinois Literacy Foundation (the
Foundation), a component unit of the State of Illinois, as of and for the years ended June 30, 20 II and June
30, 20IO, which collectively comprise of the Foundation's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the Foundation's management. Our
responsibility is to express opinions on these financial statements based on our audits.
We conducted our audits 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of the Foundation as of June
30, 20 II and June 30, 20 I 0, 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.
In accordance with Government Auditing Standards, we have also issued a report dated February 8, 20I2 on
our consideration of the 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 audits.
Page 12
The Foundation has not presented a management's discussion and analysis and budgetaty comparison
information that accounting principles generally accepted in the United States of America has detennined is
necessary to supplement, although not required to be patt of, the basic financial statements.
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, the Secretaty of State, and the board of
directors and management of the Foundation, and is not intended to be and should not be used by anyone
other than these specified parties.
Decatur, Illinois
Februaty 8, 2012
2011 2010
ASSETS:
Cash $ 27,793 $ 33,090
Total Assets $ 27,793 $ 33,090
FUND BALANCE/NET ASSETS:
Assigned/Unrestricted $ 27,793 $ 33,090
Total Net Assets $ 27,793 $ 33,090
The accompanying notes are an integral part of these statements.
GOVERNMENTAL FUND BALANCE SHEETS/STATEMENTS OF NET ASSETS
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
June 30, 2011 and 2010
Page 13
Program revenues
Operating grants Net
Expenditures/ and (expense)
FUNCTIONS/PROGRAMS Expenses contributions revenue
Illinois Literacy Foundation $ 202,920 $ 44,609 $ (158,311)
General revenues:
Contributions not restricted to specific programs 152,951
Interest income 63
Total general revenues 153,014
Change in net assets (5,297)
Fund balance/net assets - beginning 33,090
Fund balance/net assets - ending $ 27,793
The accompanying notes are an integral part of these statements.
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
STATEMENT OF GOVERNMENTAL FUND REVENUES, EXPENDITURES,
For the Year Ended June 30, 2011
AND CHANGE IN FUND BALANCE/STATEMENT OF ACTIVITIES
Page 14
Program revenues
Operating grants Net
Expenditures/ and (expense)
FUNCTIONS/PROGRAMS Expenses contributions revenue
Illinois Literacy Foundation $ 257,271 $ 111,580 $ (145,691)
General revenues:
Contributions not restricted to specific programs 146,716
Interest income 202
Total general revenues 146,918
Change in net assets 1,227
Fund balance/net assets - beginning 31,863
Fund balance/net assets - ending $ 33,090
The accompanying notes are an integral part of these statements.
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
STATEMENT OF GOVERNMENTAL FUND REVENUES, EXPENDITURES,
For the Year Ended June 30, 2010
AND CHANGE IN FUND BALANCE/STATEMENT OF ACTIVITIES
Page 15
THE ILLINOIS LITERACY FOUNDATION
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Illinois Literacy Foundation (the Foundation) was created by State Statute (15 ILCS
322/40) to promote literacy among the residents of the State of Illinois by supporting literacy
programs and enhancing Statewide literacy awareness, to make grants and gifts in aid in
support of the goal, and to engage generally in other lawful endeavors consistent with the
foregoing purposes. The Foundation develops strategies and pioneers test programs that can
be implemented at a local level to fill identified gaps in the literacy efforts of the State of
Illinois.
B. Financial Reporting Entity
The Foundation’s 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).
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 either (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.
C. 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 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:
Page 16
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 public 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 1.D.
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 that are administered by the
Foundation and accounted for in this fund include the promotion of literacy among the
residents of the State of Illinois.
D. 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, include 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 measureable 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 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 Board.
E. Fund Balance
In the fund financial statements, fund balance is divided into five classifications based
primarily on the extent to which the Foundation is bound to observe constraints imposed
upon the use of the resources in the governmental funds. The classifications are as follows:
Page 17
Nonspendable – The nonspendable fund balance category includes amounts that cannot
be spent because they are not in a 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.
Restricted – Fund balance is reported as restricted when constraints placed on the use of
resources are either externally imposed by creditors (such as through debt covenants),
grantors, contributors, or laws or regulations of other governments or is imposed by law
through constitutional provisions or enabling legislation.
Committed – The committed fund balance classification includes amounts that can be
used only for the specific purposes imposed by a formal action of the State legislature
and signed into law by the governor. Those committed amounts cannot be used for any
other purpose unless the State legislature and governor removes or changes the specified
use by taking the same type of action it employed to previously commit those amounts.
In contrast to fund balance that is restricted by enabling legislation, committed fund
balance classification may be redeployed for other purposes with appropriate due process.
Assigned – Amounts in the assigned fund balance classification are intended to be used
by the Foundation for specific purposes but do not meet the criteria to be classified as
restricted or committed. In the General Fund, assigned amounts represent intended uses
established by the State legislature.
Unassigned – The unassigned fund balance classification is the residual classification for
the government’s general fund and includes all spendable amounts not contained in the
other classifications.
The Foundation applies restricted resources first when expenditures are incurred for purposes
for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are
available. Similarly, within unrestricted fund balance, committed amounts are reduced first
followed by assigned, and then unassigned amounts when expenditures are incurred for
purposes for which amounts in any of the unrestricted fund balance classifications could be
used.
F. 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.
G. Use of Estimates
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.
H. New Accounting Pronouncements
Effective for the year ending June 30, 2010, the Foundation adopted GASB Statement No.
54, Fund Balance Reporting and Governmental Fund Type Definitions, which establishes
fund balance classifications and clarifies the definitions of fund types.
Page 18
2. DEPOSITS
Custodial credit risk is the risk that, in the event of a bank failure, the Foundation’s deposits may
not be returned to it. The Foundation does not have a deposit policy for custodial credit risk. As
of June 30, 2011 and 2010, none of the Foundation’s bank balances of $27,793 and $33,090,
respectively, was exposed to custodial credit risk.
3. INCOME TAXES
The Foundation is a not-for-profit organization and claims exemption from Federal and state
income taxes under Section 501(c)(3) of the Internal Revenue Service Code and similar
provisions of State tax codes.
4. RELATED PARTY TRANSACTIONS
Salaries and wages and the related employee benefits of the Executive Director and his assistants
are paid by the State of Illinois Office of the Secretary of State (Office). The Office also provides
some administrative expenses for the Foundation.
The amount of financial assistance from the Office to the Foundation for the years ended June 30,
2011 and 2010, was as follows:
2011 2010
Salaries $103,260 $ 99,288
Benefits 48,230 45,411
Subtotal 151,490 144,699
Commodities 308 220
Printing - 994
Telecommunications 1,153 803
Total $152,951 $146,716
The totals of $152,951 and $146,716 are included in the Statements of Activities as a General
Administrative revenue and expense.
Page 19
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
SUPPLEMENTARY INFORMATION FOR STATE COMPLIANCE PURPOSES
SUMMARY
For the Years Ended June 30, 2011 and 2010
Supplementary Information for State Compliance Purposes presented in this section of the report includes
the following:
Fiscal Schedules and Analysis:
Comparative Schedule of Revenues and Expenses
Analysis of Significant Variations in Revenue
Analysis of Significant Variations in Expenditures
Analysis of Operations:
Functions and Planning Program
Statistical Highlights
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 to the audit of the basic financial statements and, in the auditors’ opinion, it is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
Page 20
2011 2010 2009
REVENUE
Direct public support $ 44,609 $ 111,580 $ 131,226
Interest 63 202 659
Total revenue 44,672 111,782 131,885
EXPENSES
Contractual 6,108 2,818 2,504
Travel 1,033 264 532
Printing 1,114 - -
Program grants 41,714 107,473 131,985
Total expenses 49,969 110,555 135,021
CHANGE IN NET ASSETS $ (5,297) $ 1,227 $ (3,136)
Note:
The above comparison does not include the on-behalf payments made by the State of
Illinois Office of the Secretary of State.
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
COMPARATIVE SCHEDULE OF REVENUES AND EXPENSES
For the Years Ended June 30, 2011, 2010, and 2009
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Fiscal Year 2011 2011 2010 Difference Percent Change
Direct Public Support $44,609 $111,580 ($66,971) -150.13%
Fiscal Year 2010 2010 2009 Difference Percent Change
Direct Public Support $111,580 $131,226 ($19,646) -17.61%
The Foundation has historically partnered with a chain of retail book stores in conducting its annual Illinois
Literacy Campaign. The campaign was the primary source of donations for fiscal years 2009 through 2011.
The decline in direct public support (donations) from 2010 to 2011 was attributable primarily to a decrease in
participating stores as well as a downturn in business of the partner stores. The Foundation is currently seeking
other vendors to partner with in the future in order to continue the program.
The decrease in donations from 2009 to 2010 was primarily attributable to the timing of the campaign. In 2009,
the campaign occurred during the peak holiday season whereas in 2010 it was held at an earlier time period.
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
ANALYSIS OF SIGNIFICANT VARIATIONS IN REVENUE
For the Years Ended June 30, 2011 and 2010
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Fiscal Year 2010 2009 2010 Difference Percent Change
Program Grants $131,985 $107,473 ($24,512) -22.81% (1)
Fiscal Year 2011 2010 2011 Difference Percent Change
Program Grants $107,473 $41,714 ($65,759) -157.64% (1)
Contractual $2,818 $6,108 $3,290 53.86% (2)
Travel $264 $1,033 $769 74.44% (3)
Printing $0 $1,114 $1,114 100.00% (4)
(2) Contractual expenses during fiscal year 2011 increased because the audit fee for the two-year period ending June
30, 2009 was paid in the beginning of fiscal year 2011.
(3) Travel expense during fiscal year 2011 was higher than in previous years due to participation of board
representatives from DuQuoin, IL to the meetings in Chicago. The representatives had not been able to attend the
regular meetings to this extent in previous fiscal years.
(4) Printing costs for 2009 and 2010 were assumed by Secretary of State and in 2011 were paid directly by the
Foundation.
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
ANALYSIS OF SIGNIFICANT VARIATIONS IN EXPENDITURES
For the Years Ended June 30, 2011 and 2010
(1) Program Grants for the Illinois Literacy Campaign relate directly to the revenue generated specifically for the
campaign each fiscal year. The decrease in fiscal years 2011 and 2010 program grant expenditures correlate with the
decrease in Holiday Literacy Program funds raised as described in the Analysis of Signficant Variations in Revenue.
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THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
ANALYSIS OF OPERATIONS
For the Years Ended June 30, 2011 and 2010
FUNCTIONS AND PLANNING PROGRAM
Foundation Functions
The Illinois Literacy Foundation was created by State Statute (15 ILCS 322/40) to promote literacy
among the residents of the State of Illinois by supporting literacy programs and enhancing Statewide
literacy awareness, to make grants and gifts in aid and support of the goal, and to engage generally in
other lawful endeavors consistent with the foregoing purposes.
The Secretary of State serves as ex officio director of the Foundation. There shall be not less than six nor
more than eleven directors of the Foundation. Following is a list of directors of the Foundation as of
June 30, 2011.
Secretary of State Jesse White Sunny Chico
(Ex Officio Director) Chicago, IL
Chicago, IL
Richard Dent
Deputy Secretary of State Chicago, IL
Thomas Benigno
(Executive Director) Eugene Mroz
Chicago, IL Chicago, IL
Anthony Taylor (President) Roderick Hawkins
Naperville, IL Niles, IL
Caroline Sanchez Crozier (Vice-President) Mary Dempsey (Member Emeritus)
Chicago, IL Chicago, IL
Dr. Roberto R. Castaneda (Treasurer/Secretary) John Rosales (Member Emeritus)
Chicago, IL Niles, IL
George Burciaga Michael Mroz (Designee)
Chicago, IL Arlington Heights, IL
Nikki M. Zollar Dr. Jodi N. Martinez
Chicago, IL (Designate, Thomas Benigno)
Chicago, IL
Joyce O. Calvert
Du Quoin, IL
Crystal Reynolds
Niles, IL
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Foundation Functions – Continued
Planning Program
The Foundation has adopted a Mission Statement and Guiding Principles as follows:
MISSION STATEMENT
The mission of The Illinois Literacy Foundation (the Foundation) is to partner with the corporate
and private sectors to enhance literacy awareness and support literacy programs throughout the State
of Illinois.
Therefore, in collaboration with corporate and private entities, local businesses and state agencies,
the Foundation strives to promote enjoyment in reading and learning by addressing the literacy
needs of the people of Illinois.
GUIDING PRINCIPLES
* The Foundation will act as a “Transfer Agent” to supplement, coordinate and reinforce existing
literacy activities.
* The Foundation efforts should focus on innovative programs that emphasize corporate involvement.
* The Foundation efforts should tackle problems in a comprehensive, “systemic” fashion that stresses
prevention.
* The Foundation will seek sponsorship and support from the private sector for programs within local
communities.
* The Foundation recognizes there is no single solution to illiteracy and that diverse solutions need to
be developed for local implementation.
* The Foundation efforts will not duplicate other literacy activities.
* The Foundation will work in cooperation and partnership with other literacy agencies.
* The Foundation will develop guidelines for awarding grants and contracts as well as a framework
for reporting results so that the information can be used to enhance other local programs.
The Foundation office for the two years ended June 30, 2011, was located at the J.R. Thompson Center in
Chicago, Illinois.
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Statistics
2011 2010
REVENUE
Direct public support $ 44,609 $ 111,580
Interest 63 202
Total revenue 44,672 111,782
EXPENSES
Contractual 6,108 2,818
Travel 1,033 264
Printing 1,114 -
Program grants 41,714 107,473
Total expenses 49,969 110,555
CHANGE IN NET ASSETS (5,297) 1,227
NET ASSETS, BEGINNING 33,090 31,863
NET ASSETS, ENDING $ 27,793 $ 33,090
Illinois Literacy Campaign
32 44
Number of recipients of campaign contribution 31 36
Contributions and distributions for campaign 44,210 108,990
Average contributions per store 1,382 2,477
Average contributions per recipient 1,426 3,028
Ex Officio Director
Number of Borders Books and Music, Borders Outlets, and
Waldenbooks stores participating statewide:
Honorable Jesse White, Secretary of State
THE ILLINOIS LITERACY FOUNDATION
(A Component Unit of the State of Illinois)
STATISTICAL HIGHLIGHTS
For the Years Ended June 30, 2011 and 2010
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