Indiana University Notes to the Financial Statements
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STATE BOARD OF ACCOUNTS 302 West Washington Street Room E418 INDIANAPOLIS, INDIANA 46204-2769 AUDIT REPORT OF INDIANA UNIVERSITY BLOOMINGTON, INDIANA July 1, 2008 to June 30, 2009 TABLE OF CONTENTS Description Page Schedule of University Officials ......................................................................................................... 2 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 ............................................... 3-4 Independent Auditor’s Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 ................................................................. 5-6 Schedule of Expenditures of Federal Awards .................................................................................... 7-44 Notes to Schedule of Expenditures of Federal Awards ..................................................................... 45-46 Schedule of Findings and Questioned Costs ..................................................................................... 47-48 Corrective Action Plan ........................................................................................................................ 49 Exit Conference .................................................................................................................................. 50 -1- SCHEDULE OF UNIVERSITY OFFICIALS Office Official Term University President Dr. Michael A. McRobbie 07-01-07 to 06-30-10 Interim Vice President Research Administration Robert B. Schnabel 07-07-09 to 06-30-10 Ora Hirsch Pescovitz, M.D. 07-24-07 to 07-06-09 Associate Vice President Research Administration Steven A. Martin 07-01-07 to 06-30-10 University Vice President and Chief Financial Officer Neil D. Theobald 08-01-07 to 06-30-10 University Treasurer MaryFrances McCourt 10-01-05 to 06-30-10 President of the Board of Trustees William R. Cast, M.D. 08-14-09 to 06-30-10 Stephen L. Ferguson 08-19-05 to 08-13-09 -2- STATE OF INDIANA AN EQUAL OPPORTUNITY EM PLOY ER STATE BOARD OF ACCOUNTS 302 WEST WASHINCTON STREET ROOM E4IIt INDIANAPOLIS- lNDIANA.l6204-2765 Telcphonc: (317) 232-25 l3 F^x: (31'7)23247 | I Wcb Site: www.in.gov/sboa 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 TO: THE OFFICIALS OF INDIANA UNIVERSITY, BLOOMINGTON, INDIANA We have audited the financial statements of lndiana University (University), as of and for the year ended June 30, 2009, and have issued our reporl thereon dated October 20, 2009. 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 Auditino Standards, issued by the Comptroller General of the United States. lnternal Control Over Financial Reoortino ln planning and performing our audit, we considered the University's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University's internal conlrol over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the University's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood ttrat a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statemenls will not be prevented or detected by the entity's internal control. Our consideralion of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal conkol that might be significant deficiencies or material weaknesses. We consider the deficiencies described in item 2009-'1 of the accompanying Schedule of Findings and Questioned Costs to be a material weakness in internal control over financial reporting. REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ANO ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Continued) Compliance and Other Matters As part of obtaining reasonable assurance about whether the University's financial statemenb are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not epress such an opinion. The resulb of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditino Standards. The University's response to the findings identified in our audit is described in the accompanying section of the report entitled Corrective Action Plan. We did not audit the University's response and, accordingly, we express no opinion on it. This report is intended solely for the information and use of the University's Board of Trustees, management, federal awarding agencies and pass{hrough entities and is not intended to be and should not be used by anyone other than these specified parties. ln accordance wilh lndiana Code 5-1 1-5-1 , this report is a part of the public records of the State Board of Accounts and of the office examined. STATE BOARD OF ACCOUNTS October 20, 2009 /4f,L4*/ //4 ,6 D STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINCTON STREET ROOM E4l 8 INDIANAPOLIS. INDIANA 46204-2?65 Telephonc: (31 7) 232-2513 F ax. (317) 232-47 ll wcb Site: www.in.gov/sboa INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 TO: THE OFFICIALS OF INDIANA UNIVERSITY, BLOOMINGTON, INDIANA Comoliance We have audited the compliance of lndiana University (University) with the types of compliance requirements described in the U.S. Office of Manaoement and Budoet (OMB) Circular A-133 Comdiance Supolement that are applicable to each of its major federal programs for the year ended June 30, 2009. The University's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the University's management. Our responsibility is to express an opinion on the University's compliance based on our audit. We conducted our audit of compliance in accordance Wth auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditino Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States. Local Governments. and Non-Profit Orqanizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the University's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on lndiana University's compliance with those requirements. ln our opinion the University complied in all material respects with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2009. lnternal Control Over Comoliance The management of the University is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. ln planning and performing our audit, we considered the University's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose