ILLINOIS BOARD OF ADMISSIONS TO THE BAR
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Two Years Ended September 30, 2011
Performed as Special Assistant Auditors
for the Auditor General, State of Illinois
KYLE E. MCGINNIS
CERTIFIED PUBLIC ACCOUNTANT
200 EAST PINE
SPRINGFIELD, ILLINOIS 62704
Illinois Board of Admissions to the Bar
Financial Audit and Compliance Examination
For the Two Years Ended September 30, 2011
Board Officials
Management Assertion Letter
Compliance Report
Summary
Accountant's Report
Table of Contents
Independent Accountants' Report on State Compliance, On Internal Control Over
Compliance, and on Supplementary Information for State Compliance Purposes
Schedule of Findings
Current Findings - State Compliance
Prior Findings Not Repeated (None)
Financial Statement Report
Summary
Independent Auditors' Report
Financial Statements
Comparative Statement of Financial Position
Comparative Statement of Activities
Comparative Statement of Cash Flows
Notes to the Financial Statements
Supplementary Information
Statement of Functional Expenses for the Fiscal Year Ended September 30, 2011
Statement of Functional Expenses for the Fiscal Year Ended September 30, 2010
Page
1
2
3
4
7
8
9
10
12
13
14
15
20
21
Supplementary Information for State Compliance Purposes
Summary
Fiscal Schedules and Analysis
Schedule of Changes in Property
Comparative Schedule of Cash Receipts
Comparative Schedule of Expenses
Expenses on a Functional Basis
Analysis of Significant Balance Sheet Accounts
Analysis of Significant Variations in Cash Receipts
Analysis of Significant Variations in Expenses
Analysis of Operations
Board Functions and Planning Program
Average Number of Employees
Service Efforts and Accomplishments (Unaudited)
Page
22
23
24
24
24
25
26
27
28
29
29
BOARD OFFICIALS
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
Director of Administration (06/01/10-Present) Ms. Regina Kwan Peterson
Acting Director of Administration (09/24/09-5/31 /1 0) Ms. Lillian Leskera
Deputy Director of Administration Ms. Lillian Leskera
Members of the Board
President
Secretary/Treasurer
Member of the Board
Member of the Board
Member of the Board
Member of the Board
Member of the Board
Board offices are located at:
625 South College Street
Springfield, Illinois 62704-2521
Mr. Theodore L. Kuzniar
Mr. Donald H. Funk
Mr. James R. Carroll
Mr. Lawrence N. Hill
Mr. Neil K. Quinn
Mr. David W. Andich
Mr. John P. Long
1
MEMBERS OF THE 80ARO
THEODORE l. KUZNIAR, PRESIDENT, ST. CHARLES
DONALD H. FUNK, SEC.-TREAS., SPRINGFIELD
DAVID W. ANDICH, ROCK ISLAND
NEIL K. 0UINN, CHICAGO
lAWRENCE N. HILL, CHICAGO
JAMES R. CARROLL, CHICAGO
JOHN P. LONG, O'FALLON
April 3, 2012
Kyle E. McGinnis, CPA
200 East Pine Street
Springfield, IL 62704
Ladies and Gentlemen:
ILLINOIS BOARD OF ADMISSIONS
TO THE BAR
625 SOUTH COLLEGE STREET
SPRINGFIELD, ILLINOIS 62704-2521
TELEPHONE (217) 522-5917
FACSIMILE (217) 522-3728
We are responsible for the identification of and compliance with all aspects of laws,
regulations, and contracts that could have a material effect on the operations ofthe Illinois
Board of Admissions to the Bar (hereinafter "Board"). We are responsible for, and we have
established and maintained an effective system of, internal controls over compliance
requirements. We have performed an evaluation ofthe Board's compliance with the following
assertions during the two-year period ended September 30, 2011. Based on this evaluation, we
assert that during the years ended September 30, 2010 and September 30, 2011, the Board has
materially complied with the statements below.
A. The Board has obligated, expended, received, and used funds in accordance with the
purpose for which such funds have been collected or otherwise authorized by law.
B. The Board has obligated, expended, received, and used funds in accordance with any
limitations, restrictions, conditions, or mandatory directions imposed by law upon such
obligation, expenditure, receipt, or use.
C. The Board has complied in all material respects with applicable laws and regulations in
its financial and fiscal operations.
D. Revenues and receipts collected by the Board are in accordance with applicable laws
and regulations, and the accounting and record keeping of such revenues and receipts is
fair, accurate, and in accordance with law.
E. Money or negotiable securities or similar assets handled by the Board or held in trust by
the Board have been properly and legally administered, and the accounting and
record keeping relating thereto is proper, accurate, and in accordance with law.
Very truly yours,
~~r~
Regina Kwan Peterson
Director of Administration
2
Robin Read
Bookkeeper
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
COMPLIANCE REPORT
SUMMARY
The compliance testing performed during this examination was conducted 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
Number of
Findings
Repeated findings
Current Report
1
Prior Report
1
1
Prior recommendations implemented
or not repeated 0
Item No. Page
11-1 7
SCHEDULE OF FINDINGS
Description
FINDINGS (STATE COMPLIANCE)
Financial budget not prepared on a
timely basis
0
0
Finding Type
Noncompliance
and Significant
Deficiency
PRIOR FINDINGS NOT REPEATED (STATE COMPLIANCE)
None
EXIT CONFERENCE
In a correspondence dated March 6, 2012 the officials of the Illinois Board of Admissions to
the Bar determined that a formal exit conference would not be necessary. Responses to
the recommendations were provided by Robin Read, Bookkeeper.
3
KYLE E. McGINNIS
Certified Public Accountant
MEMBER OF:
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
ILLINOIS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
200 EAST PINE • SPRINGFIELD, ILLINOIS 62704
TELEPHONE: (217) 753-3377 FAX: (217) 753-8922
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
Board of Directors
Illinois Board of Admissions to the Bar
Springfield, Illinois
Compliance
As Special Assistant Auditors for the Auditor General, we have examined the Illinois
Board of Admissions to the Bar'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 September 30, 2011. The management of the
Illinois Board of Admissions to the Bar is responsible for compliance with these
requirements. Our responsibility is to express an opinion on the Illinois Board of
Admissions to the Bar's compliance based on our examination.
A. The Illinois Board of Admissions to the Bar has obligated, expended, received and
used funds in accordance with the purpose for which such funds have been
collected or otherwise authorized by law.
B. The Illinois Board of Admissions to the Bar has obligated, expended, received and
used funds in accordance with any limitations, restrictions, conditions or mandatory
directions imposed by law upon such obligation, expenditure, receipt or use.
C. The Illinois Board of Admissions to the Bar has complied, in all material respects,
with applicable laws and regulations, in its financial and fiscal operations.
D. Revenues and receipts collected by the Illinois Board of Admissions to the Bar 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 Illinois Board of
Admissions to the Bar or held in trust by the Illinois Board of Admissions to the Bar
have been properly and legally administered and the accounting and recordkeeping
relating thereto is proper, accurate, and in accordance with law.
4
We conducted our examination in accordance with attestation standards established by
the American Institute of Certified Public Accountants; 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 Illinois Board of
Admissions to the Bar'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 Illinois Board of
Admissions to the Bar's compliance with specified requirements.
In our opinion, the Illinois Board of Admissions to the Bar complied, in all material
respects, with the requirements listed in the first paragraph of this report during the two
years ended September 30, 2011.
Internal Control
Management of the Illinois Board of Admissions to the Bar 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 Illinois Board of Admissions to the Bar'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 the Illinois Board of
Admissions to the Bar's internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of the Illinois Board of Admissions to the Bar'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 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.
However, we identified certain deficiencies in internal control over compliance that we
considered to be significant deficiencies as described in the accompanying schedule of
findings as item 11-1. A significant deficiency in an entity's internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance that is less severe than a material weakness in internal control over
compliance, yet important enough to merit attention by those charged with governance.
5
There were no immaterial findings that have been excluded from this report.
The Illinois Board of Admissions to the Bar's responses to the finding identified in our
examination is described in the accompanying schedule of findings. We did not examine
the Illinois Board of Admissions to the Bar's responses and, accordingly, we express no
opinion on the responses.
Supplementary Information for State Compliance Purposes
As Special Assistant Auditors for the Auditor General, we have audited the financial
statements of the Illinois Board of Admissions to the Bar as of and for the two years
ended September 30, 2011, which collectively comprise the Illinois Board of Admissions
to the Bar's basic financial statements, and have issued our report thereon dated April 3,
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 Illinois Board of Admissions to the Bar. 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
years ended September 30, 2011 and 2010 taken as a whole.
We have also previously audited, in accordance with auditing standards generally
accepted in the United States, the Illinois Board of Admissions to the Bar's basic financial
statements for the years ended September 30, 2009 and September 30, 2008. In our
report dated June 28, 2010 on basic financial statements, we expressed unqualified
opinions on the respective financial statements. In our opinion, the 2009 and 2008
Supplementary Information for State Compliance Purposes, except for the portion
marked "unaudited" is fairly stated in all material respects in relation to the basic
financial statements for the years ended September 30, 2009 and September 30, 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, the Illinois Supreme
Court, Board management, and the agency's governing board, and is not intended to be
and should not be used by anyone other than these specified parties.
-f.p:Jn~~
Kyle E. McGinnis
Certified Public Accountant
Springfield, Illinois
April 3, 2012
6
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
SCHEDULE OF FINDINGS
CURRENT FINDINGS
For the Two Years Ended September 30, 2011
11-1. Finding Financial budget not prepared on a timely basis.
The Illinois Board of Admissions to the Bar (Board) presented their financial budget
for their 2010 projected revenues and expenses to the Board of Directors on July
28, 2010. This is approximately 10 months after the fiscal year begins.
Failure to timely prepare an annual budget is non-compliance with the Board's
Management Policies and Procedures.
The Board's Management Policies and Procedures dated November 1995, require
the Director of Administration to prepare, or have prepared, an annual budget for
submission to the Board no later than the third month of the fiscal year covered by
the budget. In addition good business practice dictates that the Board implement
procedures to ensure their policies and procedures are followed.
Board management indicated the situation arose due to a lack of information at the
end of the year sufficient to prepare an accurate budget.
Budgeting is considered an essential element of an entity's financial planning,
control and evaluation process. By not preparing and following a budget, the Board
runs the risk of incurring unnecessary expenditures, and of not using their
resources in the most efficient manner. (Finding Code No. 11-1; 09-1)
Recommendation
We recommend Board management prepare an annual budget and submit it to the
Board of Directors on a timely basis for approval.
Response
The Board acknowledges that the budgets for 2009 and 201 0 were not prepared
in a timely manner and notes that during this time frame the Board was in
transition between permanent administrative directors. Since the hiring of a
permanent director in June 2010, the Board budget has been prepared in a
timely manner.
7
None.
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
SCHEDULE OF FINDINGS
For the Two Years Ended September 30, 2011
Prior Audit Findings Not Repeated
8
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
FINANCIAL STATEMENT REPORT
SUMMARY
The audit of the accompanying financial statements of the Illinois Board of
Admissions to the Bar was performed by Kyle E. McGinnis, CPA.
Based on their audit, the auditors expressed an unqualified opinion on the
Agency's financial statements.
9
KYLE E. McGINNIS
Certified Public Accountant
MEMBER OF:
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
ILLINOIS SOCIETY OF CERTIFIED PUBLIC ACCOUNT ANTS
200 EAST PINE * SPRINGFIELD, ILLINOIS 62704
TELEPHONE: (217) 753-3377 FAX: (217) 753-8922
Independent Auditor's Report
Honorable William G. Holland
Auditor General
State of Illinois
Board of Directors
Illinois Board of Admissions to the Bar
Springfield, Illinois
As Special Assistant Auditors for the Auditor General, we have audited the
accompanying statements of financial position of the Illinois Board of Admissions to
the Bar, as of and for the years ended September 30, 2011 and September 30,
2010, and the related statements of activities and cash flows for the years then
ended. These financial statements are the responsibility of the Illinois Board of
Admissions to the Bar's management. Our responsibility is to express opinions on
these financial statements based on our audit.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Illinois Board of Admissions to the
Bar, as of September 30, 2011 and September 30, 2010, and the changes in it's
assets and it's cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The schedules of functional expenses on pages 20
and 21 are presented for purposes of additional analysis and are not a required part
of the financial statements. Such information is the responsibility of management
and was derived from and relates directly to the underlying accounting and other
10
records used to prepare the financial statements. The information has been
subjected to the auditing procedures applied in the audits of the financial
statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to
prepare the financial statements or to the financial statements and certain
additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the information is fairly stated in all material
respects in relation to the financial statements 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, the
Comptroller, the Illinois Supreme Court, Board management and the agency's
governing board, and is not intended to be and should not be used by anyone other
than these specified parties.
ttr~G~ Certified Public Accountant
Springfield, Illinois
April 3, 2012
11
Illinois Board of Admissions to the Bar
Statement of Financial Position
September 30,
Assets
2011
Current Assets:
Cash and cash equivalents $ 132,141 $
Investments- short term (Note B) 4,128,052
Interest Receivable 4,484
Prepaid expenses 74,767
Total Current Assets $ 4,339,444 $
Building and improvements $ 1,281,851 $
Office equipment and furniture 609,506
Less accumulated depreciation (844,111)
Total $ 1,047,246 $
Land $ 189,729 $
Other Assets
Investments - long term (Note B) $ $
Total Assets $ 5,576,419 $
Liabilities and Net Assets
Current Liabilities
Accounts payable $ 83,871 $
Accrued expenses 14,206
Deferred examination and registration fees 62,150
Total Current Liabilities $ 160,227 $
Net Assets:
Unrestricted $ 5,416,192 $
Total Liabilities and Net Assets $ 5,576,419 $
The accompanying notes are an integral part of this financial statement.
12
2010
924,121
2,477,027
1,593
65,456
3,468,197
1,281,851
617,471
(769,480)
1,129,842
189,729
1,183,504
5,971,272
58,477
13,787
61,700
133,964
5,837,308
5,971,272
Illinois Board of Admissions to the Bar
Statement of Activities
For the Years Ended September 30,
2011
Unrestricted
Revenues and Reclassifications
Examination Fees $ 1,518,825
Character and Fitness Review Fees 1,211,000
Admission on Motion 211,050
Investment Income 76,313
House Counsel Fees 46,000
Credit Card Fees 57,910
Realized Loss on Investment (892)
Unrealized Loss on Investment (59,163)
Other Income 115
Total Revenues and Reclassifications $ 3,061,158
Expenses and Losses
Program Services
Committee on Character and Fitness $ 907,973
Bar Exam Administration 1,701,645
Total Program Services $ 2,609,618
Support Services
General and Administrative Expenses 871,315
Loss on Disposition of Equipment 1,341
Total Expenses and Losses $ 3,482,274
Change in Net Assets $ (421,116)
Net Assets at Beginning of Year 5,837,308
Net Assets at End of Year $ 5,416,192
The accompanying notes are an integral part of this financial statement.
13
2010
Unrestricted
$ 1,513,070
1,240,065
80,800
100,302
24,900
58,785
(54,686)
$ 2,963,236
$ 951,814
1,663,958
$ 2,615,772
868,880
127
$ 3,484,779
$ (521,543)
6,358,851
$ 5,837,308
Illinois Board of Admissions to the Bar
Statement of Cash Flows
For the Years Ended September 30,
2011
Cash Flows from Operating Activities
Change in net assets $ (421,116)
Adjustments to reconcile change in net assets
provided by operating activities:
Unrealized loss on investments 59,163
Depreciation 97,956
Loss on disposition of assets 1,724
Accretion of investments (25,891)
Changes in Assets and Liabilities
Interest receivable (2,891)
Prepaid expenses (9,311)
Accounts payable 25,394
Accrued Liabilities 419
Deferred examination and registration fees 450
Total Adjustments $ 147,013
Net Cash Used by Operating Activities $ (274, 1 03)
Cash Flows from Investing Activities
Purchase of building and improvements to real estate $
Purchase of office equipment (17,084)
Purchase of short-term investments (3,860,463)
Maturities of short-term investments 3,359,670
Net Cash Provided by Investing Activities $ (517,877)
Net Increase in Cash and Cash Equivalents $ (791 ,980)
Cash and Cash Equivalents at Beginning of Year 924,121
Cash and Cash Equivalents at End of Year $ 132,141
The accompanying notes are an integral part of this financial statement.
14
2010
$ (521 ,543)
54,686
102,604
127
(58,389)
(14,667)
(61 ,784)
(27,435)
(4,350)
$ (9,208)
$ (530,751)
$ (3,260)
(24,206)
(2,893,541)
3,843,558
$ 922,551
$ 391,800
532,321
$ 924,121
Illinois Board of Admissions to the Bar
Notes to Financial Statements
Note A Summary of Significant Accounting Policies
Nature of Activities
The Illinois Board of Admissions to the Bar (the Board) was established by the
Illinois Supreme Court (the Supreme Court) and authorized to operate under
Illinois Supreme Court rules 701- 706; 708-710; 712-713; and 715-717. The
Board's primary function is to conduct the Illinois Bar examination. This includes
the processing of examination applications; the collection of examination and law
student registration fees; and the administration and grading of the exams.
Additionally the Board has responsibility for approval of applications on motion,
the licensing of foreign legal consultants, house counsel and legal service
program attorneys, and the collection of related fees.
The Supreme Court also established the Committee on Character and Fitness
(the Committee). The Committee has the responsi.bility of determining whether
applicants for admission to the bar are of good moral character and general
fitness to practice law in the State of Illinois. The operations and related
expenses of the Committee are administered by the Board.
Organizational Structure
The Board consists of seven members of the Illinois bar who are appointed by
the Supreme Court for staggered three year terms.
The Committee currently consists of 99 members of the Illinois bar who are
appointed by the Supreme Court for staggered three year terms. The Committee
of the 1st judicial district (Cook County) must not have less than thirty members
and the remaining four judicial districts must not have less than 15 members
each.
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis
of accounting in accordance with generally accepted accounting principles.
Cash Equivalents
The Board considers all unrestricted highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Investment Securities
Unrestricted investments with maturity dates of one year or less as of the
balance sheet date are classified as short term. All unrestricted investments with
maturity dates beyond one year from the balance sheet date are classified as
long term.
15
Note A Summary of Significant Accounting Policies Continued
Property and Equipment
Property and equipment are stated at cost. The cost of buildings and equipment
are charged against income over their estimated useful lives, using the straightline
method of depreciation. Repairs and maintenance, which are not considered
betterments and do not extend the useful life of property and equipment, are
charged to expense as incurred. When property and equipment are retired or
otherwise disposed of, the asset and accumulated depreciation are removed
from the accounts and the resulting profit or loss is reflected in income. Assets
recorded under capital leases are amortized over the shorter of their useful lives
or the term of the related leases by use of the straight line method.
The estimated useful lives of property and equipment are as follows:
Buildings and Improvements
Equipment
Use of Estimates
15 to 40 years
5 to 10 years
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Income Taxes
The Board is exempt from federal income taxes under Internal Revenue Code
Section 501 (c)(6) and therefore has made no provision for federal income taxes.
The federal tax exemption also qualifies the Board from income taxation in the
State of Illinois.
Functional Allocation of Expenses
The costs of providing the programs and general and administrative expenses
have been summarized on a functional basis in the statement of activities.
Accordingly, certain costs have been allocated among the programs and support
services benefited when reasonably determinable. Any cost, the allocation of
which is not reasonably determinable, has been reported as a general and
administrative expense.
16
Note B Investment Securities
Investments are stated at fair market value and consist primarily of U.S. Treasury
Bills and U.S. Treasury Notes.
September 30, 2011
U.S. Treasury BillsShort
term
U.S. Treasury StripsShort
term
U.S. Treasury NoteLong
term
September 30, 2010
U.S. Treasury BillsShort
term
U.S. Treasury StripsShort
term
U.S. Treasury NotesLong
term
U.S. Treasury StripsLong
term
Cost
$ 599,928
532,587
2.851,663
$3.984.178
$1,694,479
638,334
491,782
532.587
$3.357.182
Investment return is summarized as follows:
Interest Income
Realized losses on security sales
Unrealized gains on securities held
Total investment return
17
Fair
Value
$ 599,886
687,862
2,840.304
$4.128.052
$1,699,116
777,911
499,109
684.395
$3.660.531
2010
$ 100,302
(54,686)
$ 45.616
Unrealized
Appreciation
(Depreciation)
$ (42)
155,275
(11 ,359)
$ 143,874
$ 4,637
139,577
7,327
151.808
$ 303.349
2011
$ 76,313
(892)
(59. 163)
$ 16.258
Note C Employee Benefit Plan
Effective October 1 , 1995 the Board established a defined contribution retirement
plan to benefit all full time employees. Under the plan, the Board contributes a
minimum of 3% of each eligible employee's salary. For purposes of eligibility all
employees with over 1 ,000 hours of service during the fiscal year are considered
full time employees.
For fiscal year 2011 the Board contributed 10% of each eligible employee's
salary into the retirement trust totaling $95,305.
For fiscal year 2010 the Board contributed 10% of each eligible employee's
salary into the retirement trust totaling $92,663.
Note D Donated Services
The Board receives a significant amount of donated services from Board members
and other unpaid volunteers who assist in the administration of certain Board or
Committee functions. No amounts have been recognized in the statement of
activities because the criteria for recognition under SFAS No. 116 have not been
satisfied.
Note E Concentration of Credit Risks
The Illinois Bbard of Admissions to the Bar maintained bank accounts at two
banks. On April 15, 1998 the Board entered into a collateral pledge agreement
with one bank. This agreement required the bank to pledge U.S. government
securities owned by the bank as collateral to secure all board deposits held by the
bank which exceeded FDIC insurance limits. No such agreement has been
reached nor deemed necessary with the second bank.
Note F Land, Building and Equipment
The following is a summary of land, building and equipment as of September 30,
2011 and 2010:
Land
Building and improvements
Office equipment and furniture
Less accumulated depreciation
Total
18
2011
$ 189,729
1,281,851
609,506
$2,081,086
(844, 111)
$1,236.975
2010
$ 189,729
1,281,851
617 471
$2,089,051
(769,480)
$1.319.571
Note G Operating Leases
The Board leases mailing equipment under operating leases that are noncancelable.
The terms require the Board to provide for insurance and
maintenance on the equipment. The lease will expire on December 8, 2012.
Year Ended September 30:
2011
2012
2013
$
2011
20,004
3,334
2010
$ 20,004
20,004
3,334
The total rental charges under these agreements during the years ended
September 30, 2011 and 2010 was $20,004 and $15,675, respectively.
19
Illinois Board of Admissions to the Bar
Statement of Functional Expenses
For the Fiscal Year Ended September 30, 2011
Program Services
Committee on
Character and Examination General and Total
Fitness Administration Administrative Expenses
Salaries, Wages and Payroll Taxes:
Central Office $ 496,934 $ 366,018 $ 324,804 $ 1 '187,756
Proctors and Clerks - 185,869 - 185,869
Security - 13,887 - 13,887
Total Salaries, Wages and Payroll Taxes $ 496,934 $ 565,774 $ 324,804 $ 1,387,512
Examinations Purchased - 304,991 - 304,991
Rent- Exam Facilities - 264,511 - 264,511
Exam Grading Assistants - 302,837 - 302,837
Xerox Expense 6,120 6,120 1,359 13,599
Computer Services 38,350 38,350 8,523 85,223
Postage and Express Delivery Services 23,670 23,670 5,259 52,599
Non-Standard Testing Expense - 16,787 - 16,787
Admissions Ceremony - - 113,859 113,859
Occupancy Costs - - 83,968 83,968
Insurance 97,110 59,185 79,599 235,894
Printing and Supplies 17,359 17,359 14,880 49,598
Legal 96,715 - 4,322 101,037
Accounting - - 24,916 24,916
Telephone 7,365 7,365 1,636 16,366
Pension 41,410 25,644 42,588 109,642
Meeting Expense 18,836 8,220 22,173 49,229
Miscellaneous Operating Expenses 32,743 60,832 9,761 103,336
Depreciation - - 97,956 97,956
Character and Fitness Review Costs 31,361 - - 31,361
Pension Administrative Costs - - 13,620 13,620
Office Temporary Help - - 22,092 22,092
Total Operating Expenses $ 907,973 $ 1,701,645 $ 871,315 $ 3,480,933
The accompanying notes are an integral part of these financial statements.
20
Illinois Board of Admissions to the Bar
Statement of Functional Expenses
For the Fiscal Year Ended September 30, 2010
Program Services
Committee on General
Character and Examination and Total
Salaries, Wages and Payroll Taxes: Fitness Administration Administrative Expenses
Central Office $ 539,277 $ 348,677 $ 261,640 $ 1,149,594
Proctors and Clerks - 186,752 - 186,752
Security - 20,453 - 20,453
Total Salaries, Wages and Payroll Taxes $ 539,277 $ 555,882 $ 261,640 $ 1,356,799
Examinations Purchased - 307,911 - 307,911
Rent- Exam Facilities - 296,523 - 296,523
Exam Grading Assistants - 265,360 - 265,360
Xerox Expense 5,332 5,332 1,185 11,849
Computer Services 27,211 27,211 6,046 60,468
Postage and Express Delivery Services 27,885 27,885 6,198 61,968
Non-Standard Testing Expense - 15,539 - 15,539
Admissions Ceremony - - 132,200 132,200
Occupancy Costs - - 54,982 54,982
Insurance 91,866 43,514 62,770 198,150
Printing and Supplies 19,003 19,003 16,287 54,293
Legal 43,874 6,481 31,084 81,439
Accounting - - 33,895 33,895
Telephone 7,547 7,547 1,677 16,771
Pension 50,527 23,848 41,868 116,243
Meeting Expense 13,009 2,743 22,498 38,250
Miscellaneous Operating Expenses 32,349 59,179 51,741 143,269
Depreciation - - 102,604 102,604
Character and Fitness Seminar Costs 63,789 - - 63,789
Character and Fitness Review Costs 30,145 - - 30,145
Pension Administrative Costs - - 8,288 8,288
Employee Separation Release Expense - - 32,070 32,070
Office Temporary Help - - 1,847 1,847
Total Operating Expenses $ 951,814 $ 1,663,958 $ 868,880 $ 3,484,652
=
The accompanying notes are an integral part of these financial statements.
21
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:
Schedule of Changes in Property
Comparative Schedule of Cash Receipts
Comparative Schedule of Expenses
Expenses on a Functional Basis
Analysis of Significant Balance Sheet Accounts
Analysis of Significant Variations in Receipts
Analysis of Significant Variations in Expenses
• 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 that portion marked "unaudited,"
on which they express no opinion, it is fairly stated in all material respects in relation
to the financial statements taken as a whole.
22
Illinois Board of Admissions to the Bar
Schedule of Changes in Property
For the Two Years Ended September 30, 2010 and 2011
Building
Improvements Equipment - Land
Balance at October 1, 2009 $ 1,278,591 $ 593,660 $ 189,729
Additions 3,260 24,205 -
Retirements and disposals - (394) -
Balance at September 30, 2010 $ 1,281,851 $ 617,471 $ 189,729
Additions - 17,084 -
Retirements and disposals - (25,049) -
Balance at September 30, 2011 $ 1,281,851 $ 609,506 $ 189,729
23
Total
$ 2,061,980
27,465
- (394)
$ 2,089,051
17,084
- (25,049)
$ 2,081,086
Illinois Board of Admissions to the Bar
Supplementary Information
For the Years Ended September 30, 2011, 2010 and 2009
Fiscal Year Ended
September 30,
2011 2010 2009
Comparative Schedule of Cash Receipts
Cash Receipts
Examination fees $ 1,519,275 $ 1,508,720 $ 1,614,438
Admission on motion 211,050 80,800 64,800
House counsel fees · 46,000 24,900 20,100
Investment income 105,921 130,933 200,312
Character and fitness fees 1,211,000 1,240,065 1,234,150
Credit card fees 57,910 58,785 58,845
Other income 115
Total Cash Receipts (Cash Basis) $ 3,151,271 $ 3,044,203 $ 3,192,645
Plus:
Deferred exam fees- Beginning of year 61,700 66,050 69,900
Interest accruals and accretion - End of year 30,375 59,982 90,613
Less:
Deferred exam fees - End of year (62, 150) (61 ,700) (66,050)
Interest accruals and accretion - Beginning of year (59,983) (90,613) (140,604)
Total Revenue (Accrual Basis) $ 3,121,213 $ 3,017,922 $ 3,146,504
Comparative Schedule of Expenses
Expenses on an Object Basis
Salaries, wages and payroll taxes
Central office $ 1,201,643 $ 1 '170,047 $ 1 '181 '156
Proctors 185,869 186,752 183,967
Examination purchases 304,991 307,911 313,155
Examination grading 302,837 265,360 234,182
Examination administration 408,026 432,112 411,490
Admissions ceremony 113,859 132,200 96,163
Occupancy costs 83,968 54,982 65,033
Insurance 235,894 198,150 174,700
General operating 509,149 563,724 521,073
Miscellaneous 103,336 143,269 110,739
Character and fitness review costs 31,361 30,145 29,388
Total Expenses (Accrual Basis) $ 3,480,933 $ 3,484,652 $ 3,321,046
Expenses on a Functional Basis
Committee on Character and Fitness $ 907,973 $ 951,814 $ 964,728
Examination Administration 1,701,645 1,663,958 1,625,645
General and Administrative 871,315 868,880 730,673
Total Expenses (Accrual Basis) $ 3,480,933 $ 3,484,652 $ 3,321,046
24
Illinois Board of Admissions to the Bar
Supplementary Information
For the Years Ended September 30, 2010 and 2011
Cost Fair Value
Analysis of Significant Balance Sheet Accounts
Investments
September 30, 2010
Short Term Investments
429,000 U.S. Treasury Strips Due 02/15/11 $ 359,448 $ 428,653
350,000 U.S. Treasury Strips Due 08/15/11 278,886 349,258
1,700,000 U.S. Treasury Bill Due 02/10/11 1,694,479 1,699,116
Total Short Term Investments $ 2,332,813 $ 2,477,027
Long Term Investments
688,000 U.S. Treasury Stripe Due 02/15/12 $ 532,587 $ 684,395
466,000 U.S. Treasury Note Due 08/31/12 4.125% 491,782 499,109
Total Long Term Investments $ 1,024,369 $ 1,183,504
Total Investments ·September 30, 2010 $ 3,357,182 $ 3,660,531
Investments
September 30, 2011
Short Term Investments
700,000 U.S. Treasury Note Due 12/31/11 1.000% $ 703,967 $ 701,610
688,000 U.S. Treasury Strips Due 02/15/12 532,587 687,862
700,000 U.S. Treasury Note Due 03/31/12 1.000% 704,760 703,087
700,000 U.S. Treasury Note Due 06/30/12 .625% 701,807 702,408
466,000 U.S. Treasury Note Due 08/31/12 4.125% 491,782 482,711
250,000 U.S. Treasury Note Due 09/30/12 .375% 249,347 250,488
200,000 U.S. Treasury Bill Due 12/22/11 199,999 199,994
400,000 U.S. Treasury Bill Due 03/29/12 399,929 399,892
Total Short Term Investments $ 3,984,178 $ 4,128,052
Total Investments ·September 30, 2011 $ 3,984,178 $ 4,128,052
25
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
SUPPLEMENTARY INFORMATION
FOR THE YEARS ENDED SEPTEMBER 30,2011 AND 2010
Analysis of Significant Variations in Cash Receipts as Presented in the
Comparative Schedule of Cash Receipts.
Fiscal Year 2009 to 2010
Admission on Motion Fee Income- Admission on Motion Fee income increased
$16,000 or 25% in fiscal year 2010. Applications under Illinois Supreme Court
Rule 705- Admission on Motion (AOM) increased from 81 in fiscal year 2009 to
99 in fiscal year 2010, reflecting an increase in income.
House Counsel Fee Income- House Counsel Fee income increased $4,800 or
24% in fiscal year 2010. Illinois Supreme Court Rule 716- Limited Admission of
House Counsel (HC) permits an attorney licensed to practice law in another U.S.
jurisdiction to receive a limited license to practice law in Illinois in the service of a
single corporation, partnership, association, or other legal entity whose lawful
business consists of activities other than the practice of law or the provision of
legal services. There were 61 HC applications in fiscal year 2010 and 50
applications in fiscal year 2009, resulting in an increase in HC fee income in
fiscal year 2010.
Investment Income - Investment income decreased $69,379 or 35% in fiscal
year 2010. The interest rates for the Board's investments have been declining
over the fiscal year.
Fiscal Year 2010 to 2011
Admission on Motion Fee Income - Admission on Motion Fee income increased
$130,250 or 161% in fiscal year 2011. Illinois Supreme Court Rule 705-
Admission on Motion (AOM) was amended, effective January 1, 2011, in a way
that increased the pool of attorneys licensed in other U.S. jurisdictions who are
eligible to apply for an Illinois license based on their non-Illinois license work
experience. As a direct result, the number of AOM applications increased from
99 in fiscal year 2010 to 183 in fiscal year 2011.
House Counsel Fee Income- House Counsel Fee income increased $21,100 or
85% in fiscal year 2011. Illinois Supreme Court Rule 716- Limited Admission of
House Counsel (HC) permits an attorney licensed to practice law in another U.S.
jurisdiction to receive a limited license to practice law in Illinois in the service of a
single corporation, partnership, association, or other legal entity whose lawful
business consists of activities other than the practice of law or the provision of
legal services. There was an increase in the HC application fee from $400 to
$1,250 effective January 1, 2011.
26
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
SUPPLEMENTARY INFORMATION
FOR THE YEARS ENDED SEPTEMBER 30,2011 AND 2010
Analysis of Significant Variations in Expenses as Presented in the Comparative
Schedule of Expenses.
Fiscal Year 2009 to 2010
Admissions Ceremony Expense- Admissions Ceremony Expense increased $36,037 or
37% in fiscal year 2010. This increase is attributed to the addition of several large
projection screens placed throughout the audience at the admissions ceremony.
Miscellaneous Expenses - Miscellaneous expenses increased $32,530 or 29% in fiscal
year 2010. This increase was caused by consulting fees in connection with the search
for a new Director of Administration. This was a one-time fee payment.
Fiscal Year 2010 to 2011
Occupancy Costs- Occupancy Costs increased $28,986 or 53% in fiscal year 2011.
This increase was caused by several projects completed to maintain the integrity of the
building, including: floor refinishing; clapboard repair; and exterior painting. The Board
also engaged a weekly cleaning service starting in fiscal year 2011.
Miscellaneous Expenses - Miscellaneous expenses decreased $39,933 or 28% in fiscal
year 2011. This decrease was caused by the absence of consulting fees that had been
paid the previous year in connection with the search for a new Director of Administration
on a one time basis.
27
ILLINOIS BOARD OF ADMISSIONS TO THE BAR
ANALYSIS OF OPERA liONS
FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010
FUNCTIONS AND PLANNING PROGRAM
The Illinois Board of Admissions to the Bar (the Board) was established by the
Illinois Supreme Court (Supreme Court) primarily to conduct the Illinois Bar Exam.
This includes the processing of exam applications, the collection of exam fees, the
administration of the examination and the supervision of exam grading. Additionally,
the Board has the responsibility for approval of applications on motion, the licensing
of foreign legal consultants, house counsel and legal service program attorneys, and
the collection of related fees.
The Supreme Court also established the Committee on Character and Fitness (the
Committee), the expenses of which are paid from the receipts of the Board. The
Committee has the responsibility of determining whether applicants for admission to
the bar are of good moral character and general fitness to practice law in the State
of Illinois.
The Board consists of seven members of the Illinois bar who are appointed by the
Supreme Court for staggered terms of three years. No member may be appointed
to more than three full consecutive terms. This governing board is responsible for
the fiscal operations of the Board. The Board meets throughout the year to discuss
operations, monitor its goals and objectives, make personnel decisions, review
applications to write the bar exam and review applications for foreign licenses. As of
February 1, 1994, Board members are no longer compensated. The appointed
members at September 30, 2011 were:
Theodore L. Kuzniar, President
Donald H. Funk, Secretary-Treasurer
James R. Carroll
Lawrence N. Hill
John P. Long
David W. Andich
Neil K. Quinn
The Board's administrative office is located at 625 South College Street, Springfield,
Illinois.
The Committee currently consists of 99 members of the Illinois bar who are
appointed by the Supreme Court for staggered terms of three years. No member
may be appointed to more than three full consecutive terms. The Committee of the
1st judicial district (Cook County) must not have less than thirty members and the
remaining four judicial districts must not have less than 15 members each. The
members of the Board are ex-officio members of the Committee.
28
The composition of the Board and the Committee as well as their overall policies and
procedures, including fee schedules, are established by Supreme Court rules.
The Board adopted a cash basis budget for fiscal years 2011 and 2010 based on the
Board's familiarity with the operations of the administrative office and the prior years'
audited financial statements.
AVERAGE NUMBER OF EMPLOYEES
Officers
Bookkeeper
Administrative Assistants
Receptionists
Building Maintenance
Total Employees
2011
3
1
12
1
1
September 30,
2010
2
1
12
2
1
SERVICE EFFORTS AND ACCOMPLISHMENTS (UNAUDITED)
Various statistics related to the Board's operations include the following:
Examination Number of
Agglications Absentees Exams Written
Fiscal2011
February 1,003 119 884
July 2,669 179 2,490
Total -2011 3,672 298 3.374
Fiscal2010
February 1,079 120 959
July 2,724 165 2,559
Total-2010 3.803 285 3.518
29
