Audit 30596

FY End
2022-06-30
Total Expended
$17.22M
Findings
12
Programs
7
Organization: McKendree University (IL)
Year: 2022 Accepted: 2023-03-28

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
38473 2022-001 Significant Deficiency Yes P
38474 2022-002 Significant Deficiency Yes I
38475 2022-003 Significant Deficiency Yes L
38476 2022-001 Significant Deficiency Yes P
38477 2022-002 Significant Deficiency Yes I
38478 2022-003 Significant Deficiency Yes L
614915 2022-001 Significant Deficiency Yes P
614916 2022-002 Significant Deficiency Yes I
614917 2022-003 Significant Deficiency Yes L
614918 2022-001 Significant Deficiency Yes P
614919 2022-002 Significant Deficiency Yes I
614920 2022-003 Significant Deficiency Yes L

Programs

Contacts

Name Title Type
V92NBJ823E53 John Nisbet Auditee
6185376838 Kyla Greenhoe Auditor
No contacts on file

Notes to SEFA

Title: NOTE 3OUTSTANDING LOANS Accounting Policies: NOTE 1 BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of McKendree University (the University) and under a program of the federal government for the year ended June 30, 2022. The accompanying notes are an integral part of the Schedule. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the University, it is not intended to and does not present the financial position, changes in net assets or cash flows of the University. De Minimis Rate Used: N Rate Explanation: NOTE 2 BASIS OF ACCOUNTING Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustment or credits made in the normal course of business to amounts reported as expenditures in prior years. The University has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NOTE 3OUTSTANDING LOANSThe federal loan program listed subsequently are administered directly by the University, and balances and transactions relating to these programs are included in the Universitys consolidated financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at June 30, 2022, consists of the following:

Finding Details

2022 ? 001: Segregation of Duties Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University?s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: The lack of segregation of duties and documented review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place as the vice president of finance and administration is completing a significant amount of the financial reporting function. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional controls over the preparation of annual financial statements can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: Management has already filled vacancies and has been working to strengthen the segregation of duties now that individuals fill these roles.
2022 ? 002: Procurement Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Universities to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the University has a written policy where Universities should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the University has a written procurement policy in place, however, the University did not adhere to the policy when acquiring goods with the HEERF funding. Also, it was noted during testing that there is no written policy that requires the University to verify that vendors are suspended or debarred. Questioned costs: None Context: The University did not have appropriate documentation that met the procurement, and suspension and debarment federal requirements. Cause: The University was unaware of this federal requirement. Effect: Without written policies it is likely that required steps in the process may be missed. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-002. Recommendation: We recommend that the University review their Procurement and Suspension and debarment policies and ensure that any missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 003: Reporting Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal awards. 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of cash management. The University should have internal controls designed to ensure compliance with those provisions. Condition: During our testing of reporting for the Educational Stabilization Fund, it was noted that there was no formal documentation of review. Questioned costs: None Context: The University did not have documentation of review of student disbursements or reporting for the Education Stabilization Fund. Cause: Due to staffing turnover, the process and documented review was not completed for these areas. Effect: While performing audit procedures, no instances of noncompliance with the provisions of reporting were noted; however, the lack of internal controls and document review items in these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-004. Recommendation: We recommend the University design controls to ensure an adequate review and approval process is in place and documented.
2022 ? 001: Segregation of Duties Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University?s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: The lack of segregation of duties and documented review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place as the vice president of finance and administration is completing a significant amount of the financial reporting function. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional controls over the preparation of annual financial statements can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: Management has already filled vacancies and has been working to strengthen the segregation of duties now that individuals fill these roles.
2022 ? 002: Procurement Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Universities to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the University has a written policy where Universities should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the University has a written procurement policy in place, however, the University did not adhere to the policy when acquiring goods with the HEERF funding. Also, it was noted during testing that there is no written policy that requires the University to verify that vendors are suspended or debarred. Questioned costs: None Context: The University did not have appropriate documentation that met the procurement, and suspension and debarment federal requirements. Cause: The University was unaware of this federal requirement. Effect: Without written policies it is likely that required steps in the process may be missed. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-002. Recommendation: We recommend that the University review their Procurement and Suspension and debarment policies and ensure that any missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 003: Reporting Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal awards. 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of cash management. The University should have internal controls designed to ensure compliance with those provisions. Condition: During our testing of reporting for the Educational Stabilization Fund, it was noted that there was no formal documentation of review. Questioned costs: None Context: The University did not have documentation of review of student disbursements or reporting for the Education Stabilization Fund. Cause: Due to staffing turnover, the process and documented review was not completed for these areas. Effect: While performing audit procedures, no instances of noncompliance with the provisions of reporting were noted; however, the lack of internal controls and document review items in these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-004. Recommendation: We recommend the University design controls to ensure an adequate review and approval process is in place and documented.
2022 ? 001: Segregation of Duties Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University?s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: The lack of segregation of duties and documented review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place as the vice president of finance and administration is completing a significant amount of the financial reporting function. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional controls over the preparation of annual financial statements can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: Management has already filled vacancies and has been working to strengthen the segregation of duties now that individuals fill these roles.
2022 ? 002: Procurement Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Universities to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the University has a written policy where Universities should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the University has a written procurement policy in place, however, the University did not adhere to the policy when acquiring goods with the HEERF funding. Also, it was noted during testing that there is no written policy that requires the University to verify that vendors are suspended or debarred. Questioned costs: None Context: The University did not have appropriate documentation that met the procurement, and suspension and debarment federal requirements. Cause: The University was unaware of this federal requirement. Effect: Without written policies it is likely that required steps in the process may be missed. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-002. Recommendation: We recommend that the University review their Procurement and Suspension and debarment policies and ensure that any missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 003: Reporting Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal awards. 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of cash management. The University should have internal controls designed to ensure compliance with those provisions. Condition: During our testing of reporting for the Educational Stabilization Fund, it was noted that there was no formal documentation of review. Questioned costs: None Context: The University did not have documentation of review of student disbursements or reporting for the Education Stabilization Fund. Cause: Due to staffing turnover, the process and documented review was not completed for these areas. Effect: While performing audit procedures, no instances of noncompliance with the provisions of reporting were noted; however, the lack of internal controls and document review items in these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-004. Recommendation: We recommend the University design controls to ensure an adequate review and approval process is in place and documented.
2022 ? 001: Segregation of Duties Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University?s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: The lack of segregation of duties and documented review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and documented review procedures in place as the vice president of finance and administration is completing a significant amount of the financial reporting function. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional controls over the preparation of annual financial statements can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: Management has already filled vacancies and has been working to strengthen the segregation of duties now that individuals fill these roles.
2022 ? 002: Procurement Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Universities to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the University has a written policy where Universities should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the University has a written procurement policy in place, however, the University did not adhere to the policy when acquiring goods with the HEERF funding. Also, it was noted during testing that there is no written policy that requires the University to verify that vendors are suspended or debarred. Questioned costs: None Context: The University did not have appropriate documentation that met the procurement, and suspension and debarment federal requirements. Cause: The University was unaware of this federal requirement. Effect: Without written policies it is likely that required steps in the process may be missed. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-002. Recommendation: We recommend that the University review their Procurement and Suspension and debarment policies and ensure that any missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 003: Reporting Federal agency: U.S. Department of Education Federal program title: Education Stabilization Fund: Higher Education Emergency Relief Fund Student Portion and Institutional Portion ALN Number: 84.425E, 84.425F Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal awards. 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of cash management. The University should have internal controls designed to ensure compliance with those provisions. Condition: During our testing of reporting for the Educational Stabilization Fund, it was noted that there was no formal documentation of review. Questioned costs: None Context: The University did not have documentation of review of student disbursements or reporting for the Education Stabilization Fund. Cause: Due to staffing turnover, the process and documented review was not completed for these areas. Effect: While performing audit procedures, no instances of noncompliance with the provisions of reporting were noted; however, the lack of internal controls and document review items in these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-004. Recommendation: We recommend the University design controls to ensure an adequate review and approval process is in place and documented.