STATE OF ILLINOIS ILLINOIS STATE UNIVERSITY COMPLIANCE EXAMINATION

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					         STATE OF ILLINOIS
     ILLINOISSTATE UNIVERSITY
     COMPLIANCEEXAMINATION

(ln Accordancewith the Single Audit Act
        and OMB GircularA-133)
FORTHE YEAR ENDEDJUNE 30, 2OO5

Performed as Special Assistant Auditors
for the Auditor General,State of lllinois
                                     STATE OF ILLINOIS
                                 ILLINOISSTATE UNIVERSITY
                                 COMPLIANCE  EXAMINATION

                  (ln Accordance                                      A-133)
                               With the SingleAuditAct and OMB Circular

                               For the Year Ended June 30, 2005


                                    TABLE OF CONTENTS


                                                                               Paqe No.

Tableof Contents                                                                   i
Cross-Reference  Tableof SpecialReporting        by
                                         Required 1982University
  Guidelines, amended,and the Officeof the AuditorGeneral
             as                                                                   iv
Agency Officials                                                                 vii
Management   AssertionLetter                                                     viii
Compliance  Report
   Summary                                                                        1
   Auditors'
          Reports
      Independent Accountants'Reporton StateCompliance, Internal
                                                          on
        ControlOver Compliance, and on Supplementary           for
                                                     Information
         StateCompliance Purposes
      Reporton InternalControlOver FinancialReportingand on Compliance
        and OtherMattersBasedon an Audit of Financial StatementsPerformed
        in Accordancewith Government Auditing Standards
     Reporton Compliance   With Requirements           to
                                             Applicable Each Major
        Programand on Internal ControlOver Compliance Accordance
                                                      in
        with OMB CircularA-133
   Schedule Findings
            of         and QuestionedCosts
     Summaryof Auditors'Results                                                  10
                     -
     CurrentFindings State                                                       12
                                -
     PriorFindingsNot Repeated State                                             19
Financial       Report(Has been issuedundera separatecover)
        Statement

Supplementarylnformation StateCompliance
                        for                 Purposes
  Summary                                                                        20
  FiscalSchedules  and Analysis
      Scheduleof Expenditures FederalAwards
                              of                                                 22
      Notesto the Schedule Expenditures FederalAwards
                           of            of                                      26
      Scheduleof Appropriations, Expenditures LapsedBalances
                                            and                                  27
      Comparative Scheduleof Net Appropriations,
                                               Expenditures and
       LapsedBalances                                                            28
      Comparative Scheduleof Revenues               -
                                       and Expenses University   IncomeFund      29
      Scheduleof Changesin StateProperty                                         30
      Comparative Scheduleof Cash and Cash Equivalents                           31
      Comparative Scheduleof Investments                                         32
     Analysisof Significant
                          Variations CertainRevenueand Expense
                                    in                             Accounts      33
     Analysisof Significant
                          LapsePeriodSpending                                    34
     Analysisof Significant
                          Variations Certain
                                    in       Asset and Liability
                                                               Accounts          35
      Comparative Scheduleof Receivables Aged Analysisof Receivables
                                         and                                     36
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                               COMPLIANCEEXAMINATION

                (ln Accordance                                      A-133)
                             With the SingleAuditAct and OMB Circular

                             For the Year Ended June 30, 2005


                                  TABLE OF CONTENTS

                                                                             Paqe No.
           Information StateCompliance
Supplementary        for                    (continued)
                                     Purposes

  Analysis Operations
         of
    Agency  Functions Planning
                      and          Program                                     37
    Employment            (U
                 Statistics naudited)                                          39
    Annual  CostStatistics(Unaudited)                                          41
    Emergency   Purchases                                                      42
    Service Efforts Accomplishments
                   and                  (Unaudited)                            43
    Schedule  of Federal Nonfederal
                        and            Expenditures                            47
    Summary Agency
              of        Operations Function Program
                                    by       of              -
                                                      Activity
       Student Enrollment          (Unaudited)
                          Statistics                                           48
    Tuition FeeWaivers
            and             (Unaudited)                                        49
    1Oth Room
         Day                 (Unaudited)
                    Utilization                                                51
    DebtFinanced University
                   by           RelatedOrganization                            52
    Acquisition RealEstate University Funded
               of            by          Not       by
       Separate  Specific
                        Appropriation                                          53

        DataRequirements Audits Universities
  Special                  for     of
    EntityFinancial
                  Statements
      LocalFunds:
        Statement NetAssets
                  of                                                           54
        Statement Revenues,
                  of            Expenses, Changes NetAssets
                                        and       in                           56
      ServiceDepartments:
        Statement NetAssets
                  of                                                           58
        Statement Revenues,
                  of            Expenses, Changes NetAssets
                                        and       in                           59
     AuxiliaryFacilities:
        Statement NetAssets
                  of                                                           60
        Statement Revenues,
                  of            Expenses, Changes NetAssets
                                        and       in                           61
    CalculationSheet Indirect
                     for        CostCarryfonruard                              62
    Calculation      for
               Sheet Current    ExcessFunds:
      CurrentUnrestricted LocalFunds:
        ContinuingEducation Pubic
                             and      Services                                 63
        Sales andServices EducationalActivities
                           of                                                  64
        Student Programs Services
                          and                                                  65
        FieldTripsand Foreign  Study                                           66
      ServiceDepartments                                                       67
                       -
              Facilities Revenue
      Auxiliary                  Bonds:
        Student Housing                                                        68
        Student Activities                                                     69
        Parking Services                                                       70
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                               COMPLIANCEEXAMINATION

                (ln Accordance                                      A-133)
                             With the SingleAuditAct and OMB Circular

                             For the Year Ended June 30, 2005


                                  TABLE OF CONTENTS

                                                                                Paqe No.
Supplementary
           Information StateCompliance
                     for                    (continued)
                                     Purposes

  Special                                 (continued)
        DataRequirements Audits Universities
                      for     of

     AuxiliaryFacilities,Activities, Accounting
                                  and           Entities                          71
                of
     Summary Foundation                to
                              Payments the University                             73
     Noninstructional FacilitiesReserve                                           74
     Disclosure Support
                 of        WhichAuxiliary                     HaveReceived
                                          Facilities Activities
                                                   and
               the
         During YearfromStateAppropriated     Funds                               75
     Illinoisnstitute Entrepreneu p Education
            I        for            rshi                 Information
                                                  Financial                       76
     FY2005   Performance Budget Cumulative
                           Data         and                   Report
                                                      Quarterly    ChildAbuse
         Prevention Tax Checkoff
                    and              Grants,Contract 0815799015
                                                    No.          (Unaudited)      77




                                           111
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                      CROSS.REFERENCE  TABLE OF SPECIALREPORTING
                            BY
                    REQUIRED 1982 UNIVERSITY   GUIDELINES, AMENDED,
                                                          AS
                         AND THE OFFICEOF THE AUDITORGENERAL
                                 Year Ended June 30, 2005


Source of Requirement

                                                              PageNumber
                  Revised Memo from                             and Report
             Office of the Auditor General.                  Wherelnformation
                  Dated Julv 25, 2000                          is Contained

Item 12, EntitiesFinancial
                         Statements                   See Note 23 of financial
                                                                             statements

Item 13, ReportContents:

a. ComplianceFindingspertaining the 1982
                              to                      See Note1 below
              Guidelines, amended
     University        as

b. Statement Sourcesand Applications
            of                     of                 Page56 in the Report
            Cost Recoveries
     Indirect

c. Calculation Indirect
             for      CostCarryfonrvard               Page62 in the Report
d.         Diverted Auxiliary
     Tuition      to        Enterprise
                                     Operations       None
e . ldentification EachSpecific
                of            Accounting
                                       Entity         Pages -72 in theReport
                                                          71
       and Description the Sources Revenue
                     of          of
       and Purpose Each
                  of
f.          Statements Entity
     Financial      by      Including
                                    Plant             Pages - 61 in the Report
                                                           54
       FundData
g . Calculation
              Sheets Current
                   for     Excess
                                Funds                 Pages - 70 in the Report
                                                          63
h . Disclosure Support
             of      WhichAuxiliary
                                  Enterprise          Page75 in the Report
       andActivities          During Year
                   HaveReceived    the
       fromStateAppropriated
                           Funds
t.           of
     Statement Revenue Expenditures
                      and          for                See Note23 of financial
           Bondlndenture
     Various                  Accounts
                       Required                       statements

j.            of
     Statement Whether BondAccountingConforms         See Note 2 below
       to theTerms the BondIndenture
                  of
     Listand Description Noninstructional
                       of             Facilities      Page74 in the Report
       Reserves

L    List of All University-Related          (UROs)
                                 Organizations        Page 73 in the Report
     List of lndependent  Organizations               None

m. Disclosure Payments UROsto the University
             of         by                            Page 73 in the Report
     for ServicesProvided




                                              IV
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                      GROSS.REFERENCE  TABLE OF SPECIALREPORTING
                    REQUIRED 1982UNIVERSITY
                            BY                            AS
                                               GUIDELINES, AMENDED,
                         AND THE OFFICEOF THE AUDITORGENERAL
                                 Year Ended June 30, 2005


Source of Requirement

                                                                PageNumber
                  Revised Memo from                               and Report
             Office of the Auditor General,                    Where Information
                  Dated Julv 25. 2000                            is Contained

                     (Continued):
Item13, ReportContents

n. Disclosure Paymentby the University UROs
             of                      to                Page 73 in the Report
     for ServicesProvided

o. Disclosure Cumulative
            of         Amountof Unreimbursed           Page 73 in the Report
     Subsidies

p. Description Any Debt Financing a URO
             of                  by                    Page 52 in the Report

q. Scheduleof Cash and Investments                     Pages31 - 32 in the Report

r. Statement
           RegardingIncomefrom lnvestments
                                         of            See Note 3 below
     PooledFunds

s. Costsper Full-TimeEquivalent
                              Student                  Page41 in the Report

t.            of
     Disclosure Acquisition Real Estateby the
                           of                          Page 53 in the Report
       University URO not Fundedby Separate
                 or
       SpecificAppropriation

u. Disclosure lssuanceof Certificates
            of                       of                None
                (COPs)or Participation
     Padicipation                      in
     Leaseor PurchaseArrangements   involving
     COPs

OtherFinancial              for
             RelatedSchedules Universities:

1. Schedule Appropriations,
          of             Expenditures,
                                     and               Page27 in the Report
     LapsedBalancesby MajorLine ltem

2. Schedule IncomeFundRevenues
          of                 and                       Page 29 in the Report
     Expenses

3. Scheduleof Tuitionand Fee Waivers                   Pages49 - 50 in the Report

4. Information Classroom
             on         Utilization                    Page 51 in the Report


Note 1 - There were no violations the compliance
                                 of                 requirements the University
                                                                of             Guidelines1982
                  duringthe auditof lllinoisStateUniversity the year endedJune 30, 2005.
         identified                                       for
                                STATE ILLINOIS
                                     OF
                            ILLINOIS
                                   STATEUNIVERSITY
                    CROSS.REFERENCETABLEOF SPECIALREPORTING
                  REQUIRED 1982
                         BY                        AS
                                        GUIDELINES, AMENDED,
                                UNIVERSITY
                      ANDTHEOFFICE THEAUDITOR
                                   OF           GENERAL
                                      June30,2005
                              YearEnded


Note2 - There were no violations revenuebond covenantsnoted duringthe audit of lllinoisState
                               of
        University the year endedJune 30, 2005.
                 for

Note 3 - lnvestment
                  incomeof pooledfunds has beenallocated            to          sourcesof
                                                        and credited the original
        the funds to the extent practical. There was no unallocatedinvestmentincomethat was
        required be paid intothe IncomeFund.
                to




                                            V1
                                         STATE OF ILLINOIS
                                     ILLINOISSTATE UNIVERSITY
                                     COMPLIANCEEXAMINATION

                                        AGENCYOFFICIALS




      President                                                 Dr.C. AlvinBowman
                   -
      Vice President Finance
                           and Planning                                  M.
                                                                Dr.Stephen Bragg

      Comptroller                                               Mr.GregAlt

                 (through
      LegalCounsel      July31, 2005)                           Ms.ReneeSmithByas
             -
      Director lnternal
                      Audit                                     Mr.RickPapuga




Agencyoffices located
             are    at:

   lllinois
          StateUniversity
   Hovey   Hall
             s
   C a m p u B o x1 1 0 0
            l,
   N o r m al L 6 1 7 9 0 -1 1 0 0




                                               vll
                                               ILLrNotsSrerp
                                                      UNIVERSITY

       Office oJtle                                                                                      302 HoveYHall
     Vice Presi.dentfor                                                                                 Campus   Box ll00
   Fhwnaeand,Plarminl                                                                                 Normal,IL 61790-1100
                                                                                                     Telephone: (309)
                                                                                                                    438-2143
                                                                                                     Facsimilc:(309)438-2768

                                                                                      December
                                                                                             8,2005
Nykiel, Carlin& Co.,Ltd.
200E. CourtSt.,Suite608
Kankakee,IL60901

LadiesandGentlerren:

We areresponsible the identificationof andcompliance
                  for                                   wrth, all aspects laws,regulations,
                                                                        of                 confuacts,or
grantsthat could have a material effect on the operations Illinois StateUniversity (University). We are
                                                        of
responsiblefor and we have established    and maintainedan effective systein of internal contols over
compliance requirements. haveperformedan evaluation theUniversity's compliance
                        We                               of                          with the following
assertions
         duringthe year endedJune30, 2005. Basedon this evaluatioqwe assert duringthe year ended
                                                                             that
June30, 2005,the Universityhasmateriallycompliedwith the assertions below.

   A. The Universityhasobligated,
                                expended,       and
                                        received usedpublic fundsof the Statein accordance
                                                                                         with
      thepurpose which suchfundshavebee,n
                for                        appropriated otherwiseauthorized law.
                                                      or                  by

   B. The Universityhasobligated,expended,    received usedpublic fundsof the Statein accordance
                                                      and                                       with
      any limitations,restictions, conditionsor mandatorydirectionsimposedby law upon zuchobligation,
      expenditure, receiptor use.

   C. The Universityhas complied,in all materialrespects,with applicablelaws and regulations,
                                                                                            including
      the Staterxrifomraccounting
                                syste,rn, its financialandfiscal operations.
                                        in

   D. The Staterevenues receiptscollected the Universityarein accordance
                      and                by                            with applicablelaws and
      regulations the accounting recordkeeping suchrevenues receiptsis fair, accurate in
                and            and             of              and                      and
      accordance law.
                with

   E' Themoneyor negotiable    securities similar assets
                                         or            handted the Universityon behalfof the Stateor
                                                             by
      held in trustby the agencyhavebeenproperlyandlegallyadministered, the accounting
                                                                       and                and
      recordkeqling  relatingtheretois proper,accurate in accordance law.
                                                     and           with

   Yoursveryhuly,

                University



                                                                Stephen Bragg Vice-
                                                                      M.




                             An equal opporatniqlaffirmative   aaion uhtenig   encoaragingdizteriy

                                                                viii
                                    STATE OF ILLINOIS
                                ILLINOISSTATE UNIVERSITY

                                  COMPLIANCEREPORT

                                        SUMMARY



The compliancetestingperformed this examination
                               in                                in       with Government
                                                   was conducted accordance
AuditingStandardsand in accordancewith the lllinoisStateAuditingAct.

       REPORTS
AUDITORS'

The lndependentAccountants'                       on              OverCompliance on
                                                            Control
                           Reporton StateCompliance, Internal                    and
Supplementary Informationfor State CompliancePurposes does not contain scope limitations,
                           non-standard
disclaimers othersignificant
          or                           language.

      OF
SUMMARY FINDINGS

Number  of                                   This Report      PriorReport
Findings                                             4             1
Repeated  findings                                   0             1
                   implemented
Priorrecommendations
 or not repeated                                     1            4

Detailsof findingsare presented a separately
                               in          tabbedreportsection.


       OF
SCHEDULE FINDINGS

ItemNo.    Paoe                        Description

                            (STATECOMPLIANCE)
                     FINDINGS
05-1         12             to
                     Failure Complete   Ethics       within Months Employment
                                              Training     Six        of
05-2         13      Contracts Leases Filed
                               and        Not     withtheState            Office didNot
                                                              Comptroller's     and
                       Include the Required
                               all                       for
                                             Certifications StateContracts
05-3         15      Property Control Reports
05-4         17                                   in
                     Time SheetsNot Maintained Compliance                              and
                                                                with the State Officials
                      Employees         Act
                                   Ethics


                     PRIORFINDINGSNOT REPEATED(STATECOMPLIANCE)
05-5         19                                         and        Act
                                                 Research Consulting
                                           Faculty
                     Noncompliance University
                                with
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY

                                 COMPLIANCEREPORT

                                       SUMMARY


                                   EXIT CONFERENCE

Thefindings recommendation
          and                                          with      personnel
                                               discussed University
                        appearing thisreportwere
                                in
                    on                       were:
at an exit conference February 2006. Attending
                              9,

      Representinq lllinoisStateUniversitv
      Vice President Finance
                     of         and Planning         Dr. StephenM. Bragg
      Comptroller                                    Mr. GregAlt
      AssistantComptroller                           Ms.JoEllen  Bahnsen
      Gomptroller's
                  Office                             Mr. Doug Litwiller
             -
      Director lnternal Audit                        Mr. Rick Papuga

                 Nvkiel,Qarlin& Co.. Ltd.
      Representinq
      Principal                                                         CPA
                                                     Mr. PaulA. Pelletier,
      Manager                                        Mr. BrianL. Creek,CPA

      Reoresentino Officeof the AuditorGeneral
                 the
      AuditManager                                              M.
                                                     Ms. Candice Long,CPA

Responses therecommendations provided Mr.Greg ina letterdated
        to                were      by       Alt                    2006.
                                                            February9,




                                            -2-
ffiTCARLI).,,, ess
                c.nsu,,an,s

             INDEPENDENT            REPORTON STATE COIVIPLIANCE.
                         ACCOUNTANTS'
                ON INTERNALCONTROLOVERCOMPLIANCE,AND ON
          SUPPLEMENTARY INFORMATION
                                  FOR STATECOMPLIANCEPURPOSES



HonorableWilliam Holland
               G.
Auditor
      General
State lllinois
    of


Compliance
As SpecialAssistant  Auditors the AuditorGeneral, have examined
                             for                       we               lllinoisState
          compliance therequirements below, morefullydescribed theAudit
University's          with               listed       as                  in
Guide FinancialAudits Compliance
     for               and             AttestationEngagements lllinois
                                                               of     State Agencies
(Audit
     Guide) adopted the Auditor
            as          by           General, during yearendedJune30, 2005.The
                                                     the
management lllinois
            of       State                                     with
                           University responsible compliance theserequirements.
                                   is            for
Ourresponsibility express opinion lllinois
               is to        an        on       State                    based our
                                                               compliance
                                                     University's              on
examination.

 A.    lllinois
              State         has
                   University obligated,     received, usedpublicfunds the
                                      expended,     and              of
       Statein accordance the purpose whichsuchfundshavebeenappropriated
                          with         for                              or
       othenariseauthorized law.
                          by
 B.    lllinois
              StateUniversity obligated,
                           has          expended, received, usedpublicfunds the
                                                         and              of
             in
       State accordancewith  anylimitations,         conditionsormandatorydirections
                                          restrictions,
       imposed lawuponsuchobligation,
                by                                        or
                                                    receipt use.
                                         expenditure,
 C.    lllinois                                    respects, applicable and
              StateUniversity complied, all material
                            has       in                  with           laws
       regulations,including Stateuniform
                           the           accounting                     and fiscal
                                                    syStem, its financial
                                                          in
       operations.

 D.    TheStaterevenues receipts
                       and       collected lllinois
                                         by       StateUniversity in accordance
                                                               are
       withapplicable                                                   of
                    lawsand regulations the accounting recordkeeping such
                                      and               and
       revenues receipts fair,accurate in accordance law.
               and       is            and             with
 E.    Money negotiable
              or                   or
                        securities similar        handled lllinois
                                             assets      by                    on
                                                                  StateUniversity
       behalf the Stateor heldin trustby lllinois
             of                                               havebeenproperly
                                                StateUniversity               and
       legally
             administered the accounting recordkeeping
                        and                  and                   thereto proper,
                                                            relating     is
       accurate, in accordance law.
                 and            with




                                         3-
      200 EastCourt St.,Suite608Kankakee,
                                        Illinois 60901c Telephone         o
                                                               8i5-933-1771Fax815-933-1163
Ourexamination conducted accordance attestation
                was            in           with           standardsestablished the
                                                                              by
Americanlnstitute Certified
                  of          PublicAccountants; standards
                                                 the                    to
                                                               applicable attestation
engagements   contained Govemment
                        in           AuditingStandards issued bytheComptrollerGeneral
of the United
            States; lllinois
                    the       StateAuditing (Act); theAuditGuide adopted the
                                          Act      and               as        by
Auditor General pursuant the Act, and,accordingly,
                          to                        included          on
                                                             examining, a test basis,
evidence aboutlllinois                compliance thoserequirements performing
                      StateUniversity's          with                  and
suchother procedures we considered
                      as                       in                  We
                                      necessary thecircumstances. believe ourthat
examination provides reasonable
                     a            basis ouropinion. examination notprovide
                                      for            Our            does          a
legaldetermination lllinois
                   on        StateUnircrsity's
                                            compliance specified
                                                        with        requirements.
Inouropinion,lllinois
                    State University        in
                                   complied, allmaterial        with
                                                       respects, theaforementioned
requirements duringthe yearendedJune30, 2A05.However, results our procedures
                                                          the        of
disclosed instances noncompliance those requirements,
                    of                 with                  whichare required beto
        in
reported accordance criteria
                       with                 by
                                 established theAuditGuide,  issued the lllinois
                                                                    by          Office
of theAuditorGeneral whicharedescribed the accompanying
                      and                    in                 schedule findings
                                                                        of          as
flndings05-1thru05-4.As required theAuditGuide,
                                  by                                      to
                                                                   relating instances
                                                   immaterialfindings
of noncompliance  excluded  fromthis reporthave beenreported a separate
                                                            in           letterto your
office.


Internal Control
The management lllinois
                   of       StateUniversity responsible establishing maintaining
                                          is          for           and
effective internal
                 control overcompliance the requirements lawsand regulations.
                                       with                of                    In
planning  and performing examination, considered
                         our            we           lllinois               internal
                                                             StateUniversity's
controlover compliance the aforementioned
                         with                  requirements orderto determine
                                                            in                  our
examination  procedures the purpose expressing opinion compliance to test
                        for          of          our         on          and
andreport intemal
           on               overcompliance accordance theAudit
                      control             in         with              issued the
                                                                  Guide,      by
lllinois
       Office theAuditor
              of           General.

Our consideration intemal
                   of         control               with
                                     overcompliance the aforementioned        requirements
would necessarily
       not            disclose matterc internal
                                all     in             that     be
                                                 control might materialweaknesses.
A material            is
           weakness a condition whichthe design operation one or moreinternal
                                    in               or           of
control components  doesnot reduce a relatively leveltheriskthatnoncompliance
                                     to          low                                 with
applicable requirements lawsandregulations would material relation oneor more
                         of                   that     be        in          to
of the aforementioned  requirements  being         may
                                          examined occurand notbe detected        withina
timelyperiod employees the normal
              by             in          course performing assigned
                                                of          their           functions.
                                                                                     We
notedno matters   involving internalcontrolovercompliance we consider be material
                                                          that              to
weaknesses. required the AuditGuide,
               As           by                         findings
                                              immaterial                to
                                                               relating internal   control
deficiencies excluded fromthis report havebeenreported a separate
                                                       in            letter youroffice.
                                                                           to


Supplementarv   lnformation StateCompliance
                             for                    Puncoses
As Special Assistant  Auditors the Auditor
                                 for                      we               the
                                                 General, haveaudited basicfinancial
statements lllinois
           of        State  University itsdiscretely
                                      and               presented            unit,
                                                                 component collectively       a
component of the Stateof lllinois, of andfor the yearended
           unit                          as                         June30, 2005,     andhave
issuedour reportthereondated December 2005.The accompanying
                                                 8,                            supplementary
information, listedin the table of contentsas Supplementary
             as                                                        Information State
                                                                                      for
Compliance  Purposes, presented purposes additional
                       is            for          of          analysis is nota required
                                                                     and                   part
of the basicfinancial   statements lllinoisState University.The 2005 Supplementary
                                      of
Information StateCompliance
           for                     Purposes, exceptforthat portion
                                                                 marked  "unaudited" which
                                                                                       on
we express opinion, beensubjected theauditing
           no          has                  to             procedures        in
                                                                     applied theaudit the of
basicfinancialstatements in ouropinion, fairlystated allmaterial
                           and,                is           in                     in
                                                                         respects relation   to
the basicfinancial statements theyearended
                               for                  June30,2005takenas a whole.The prior
yearscomparative   information beenderived
                                 has              fromlllinois                  basic
                                                              StateUniversity's financial
statements of andfortheyears
           as                      endedJune30,2QA4      and2OO3, beforetheywere    reclassified
for the matterdescribed Note21 of the financial
                          in                          statements,whichwereaudited otherby
auditors whoexpressed    unqualified  opinions the basicfinancial
                                               on                                in
                                                                    statements theirreport
datedOctober   29.2004.
Thisreport intended
          is      solely the information useof theAuditor
                       for             and                       the
                                                         General, General
Assembly, Legislative Commission, Governor, agency
         the        Audit          the         and      management, is not
                                                                    and
intended be andshould be usedby anyone
       to            not                                      parties.
                                        otherthanthesespecified


 fUtJ, a./;u-b,,#.
NYKIEL,        &
      CARLIN CO.,LTD.
        lllinois
Kankakee,

December 2005
       8.
           REPORTON INTERNAL CONTROLOVER FINANCIAL REPORTING   AND ON
      CoMPLIANCEANp OTHERMATTERSBASEp ON AN AUDTT F|NANCIAL
                                                  OF            STATEMENTS
          PERFORMED IN ACCORDANCE W ITH GOYERNMENTA UDII/NG SIANDARDS



Honorable   William Holtand
                  G.
AuditorGeneral
Stateof lllinois

As SpecialAssistantAuditors AuditorGeneral, have
                            forthe              we             the
                                                       audited basicfinancialstatements
of lllinois
          StateUniversity itsdiscretely
                         and           presented                      a
                                               component collectivelycomponent of
                                                        unit,                      unit
theStateof lllinois, of andfor theyearended
                    as                     June30, 2005, haveissued report
                                                        and            our       thereon
datedDecember 2005. conducted auditin accordance auditing
                 8,       We          our                with        standards generally
accepted theUnited
           in          States America thestandards
                            of        and                     to
                                                    applicable financial
                                                                       auditscontained in
Government    AuditingStandards,                     General the United
                                issued the Comptroller
                                      by                    of           States.
lnternalControl OverFinancial   Reportinq
In planning performing audit, considered
            and              our        we             lllinoisStateUniversity's   internalcontrolover
financial
        reporting orderto determine auditing
                  in                      our         procedures the purpose expressing
                                                                    for              of             our
opinions the flnancial
         on                 statements not to provide opinion the internal
                                        and                  an          on                controlover
financialreporting.Our consideration the internal
                                          of              control over financial   reporting wouldnot
necessarily disclose matters theinternal
                     all         in            controloverflnancial              that       be
                                                                      reporting might material
weaknesses. material
              A           weakness a reportable
                                     is           condition which design operation oneor
                                                             in                   or
                                                                      the                     of
more of the internalcontrolcomponents        does not reduceto a relatively levelthe risk that
                                                                                low
misstatements  caused erroror fraudin amounts wouldbe material relation the financial
                       by                           that                     in         to
statements beingaudited    mayoccurand not be detected     withina timely  period employees the
                                                                                   by            in
normal course performing assigned
              of             their                   We          no
                                           functions. noted matters        involving intemalcontrol
                                                                                     the
overfinancialreporting itsoperation
                      and               thatweconsiderto materialweakness.
                                                            be                                we
                                                                                     However, noted
      instances internal
certain          of         control deficiencies, we have
                                                which                   to               of
                                                                reported managementlllinois       State
University a separate
          in             letter
                              datedDecember 2005.
                                               B,
Compliance OtherMatters
            and
As part of obtaining  reasonable  assurance aboutwhetherlllinoisState University's  financial
statements free of material
            are                misstatement, we performed testsof its compliance with certain
provisions laws,regulations,
          of                  contracts grantagreements,
                                        and                                with
                                                             noncompliance whichcould
havea directand material  effecton the determination financial
                                                    of         statement amounts.  However,
providing opinion compliance thoseprovisions not an objective our audit,
         an          on             with               was                 of           and
accordingly, do notexpress
            we                suchan opinion.            of                  no
                                              Theresults ourtestsdisclosed instances      of
noncompf iancethatarereguired be reported
                               to           underGovernmentAuditing   Sfandards.However, we
notedcertain matters whicharereported Statecompliance
                                       as               findings theschedule findings.
                                                                in            of        We
alsonotedcertain  othermatters      we
                              which havereported management lllinois
                                                   to              of      StateUniversityin
a separate      datedDecember 2005.
           letter                8,




                                                -6-

      200 East Court St.,Suite 608Kankakee,
                                          Illinois 60901 o Telephone         o Fac 815-933-1163
                                                                   815-933-1771
This report is intendedsolely for the informationand use of the Auditor General,the General
Assembly,the Legislative Audit Commission,   the Governor,Agency management,     and federal
awardingagenciesand passthroughentitiesand is not intended be and shouldnot be used by
                                                              to
anyoneotherthan thesespecified   parties.


 fll'rL/,       64.rtrnzo-"rfu-
NYKIEL,
      CARLIN& CO.,LTD.
        lllinois
Kankakee,

December 2005
       8,
w:sl),^,                                   ess
                                            c.nsu,,a,,s
             REPORTON COMPLIANCE WITH REQUIREMENTS APPLICABLE EACH
                                                            TO
              MAJORPROGRAM  AND ON INTERNAL CONTROL OVERCOMPLIANCE
                      IN ACCORDANCE  WITH OMB CIRCULARA-133



 Honorable   WilliamG. Holland
 AuditorGeneral
 Stateof lllinois


 Compliance
 We haveaudited compliance lllinois
                   the           of                         the
                                         StateUniversitywith typesof compliance   requirements
 described in the U.S. Office of Management and Budget (OMB) Circular 4-133 Compliance
 Supplemenf   that are applicable each of its majorfederalprograms the year endedJune 30,
                                to                                  for
 2005. lllinoisState University's
                                majorfederal  programsare identified the summaryof auditors'
                                                                     in
 resultssectionof the accompanying  schedule findings
                                             of       and questioned                   with
                                                                       costs.Compliance the
 requirements laws, regulations,
               of                   contractsand  grants applicableto each of its major federal
 programsis the responsibility the lllinoisStateUniversity's
                              of                           management.                     is
                                                                          Our responsibility to
          an
 express opinion the lllinois
                     on           StateUniversity's
                                                  compliance  based on our audit.

 We conducted auditof compliance accordance
                our                    in            with auditingstandards  generally
                                                                                     acceptedin
 the UnitedStatesof America; standards
                              the           applicable financial
                                                      to          audits          in
                                                                        contained Government
 AuditingStandards,  issuedbythe ComptrollerGeneralof United
                                                        the       States;and  OMBCircularA-133,
 Audits of Sfafes, Local Governmentsand Non-ProfitOrganizations.     Those standardsand OMB
 CircularA-133 requirethat we plan and performthe audit to obtain reasonable    assuranceabout
 whethernoncompliance the typesof compliance
                         with                       requirements referred abovethatcouldhave
                                                                          to
 a directand material effecton a majorfederalprogram  occurred. auditincludes
                                                                An                        on
                                                                                 examining, a
 test basis,evidenceabout the lllinoisState University's compliance with those requirementsand
 performing suchotherprocedures we considered
                                  as                                              We
                                                   necessary the circumstances. believe
                                                             in                            that
 our audit providesa reasonable     basis for our opinion.Our audit does not providea legal
 determination lllinoisStateUniversity's
               of                         compliance with those requirements.

                                       complied,in a!l materialrespects,with the requirements
 ln our opinion lllinoisState University
 referredto abovethat are applicable each of its majorfederalprograms the yearendedJune
                                    to                                for
 3 0 ,2 0 0 5 .

 lnternalControlOver Compliance
 The management the lllinoisStateUniversity responsible establishing
                    of                            is             for             and maintaining
 effectiveinternal
                 controlover compliance  with the requirements laws,regulations,
                                                               of                  contracts and
 grantsapplicable federalprograms. planning
                  to                 In                                                the
                                                 and performing audit, considered lllinois
                                                                our      we
 State University'sinternalcontrolover compliance  with requirements that could have a directand
 materialeffect on a major federalprogramin order to determineour auditingprocedures the  for
 purposeof expressing   our opinionon compliance   and to test and reporton internalcontrolover
             in
 compliance accordance     with OMB Circular A-133.




                                             -8-

      200 East Court St.,Suite 608 Kankakee,
                                           Illinois 60901o Telephone         o
                                                                   815-933-1771Fm 815-933-1163
Our consideration the internalcontrolover compliance
                 of                                    would not necessarilydiscloseall mattersin
                      mightbe materialweaknesses.materialweakness a reportable
the internalcontrolthat                             A                   is            conditionin
whichthe designor operation one or moreof the internal
                             of                           controlcomponents  doesnot reduceto a
         low
relatively levelthe risk that noncompliance  with the applicablerequirements laws,regulations,
                                                                             of
contracts,and grants caused by error or fraud that would be materialin relationto a major federal
program  beingaudited               not
                      mayoccurand be detected                                       in
                                                                       byemployees thenormal
                                                    withina timelyperiod
courseof performing                                                       the
                    theirassignedfunctions.We notedno mattersinvolving internal      controlover
compliance and its operationthat we considerto be material weaknesses.

                           of
Scheduleof Expenditures FederalAwards
We haveaudited basicfinancial
                  the                statements lllinois
                                                 of       StateUniversity itsdiscretely
                                                                           and             presented
componentunit,collectively component
                              a             unit of the Stateof lllinois, of and for the
                                                                        as                year ended
June 30, 2005, and have issued our report thereon dated December8, 2005. Our audit was
performed the purposeof formingopinions the financial
           for                                 on               statements                  comprise
                                                                            that collectively
lllinoisStateUniversity'sbasicfinancial  statements. accompanying
                                                      The                           of
                                                                          schedule expenditures   of
federalawardsis presented purposes additional
                              for          of            analysis requiredby OMB Circular
                                                                  as                           A-133
and is not a required partof the basicfinancial statements.                    has
                                                             Such information beensubjected       to
the auditing procedures  applied the auditof the basicfinancial
                                  in                                statements and,in our opinion,is
fairlystated,in all materialrespects, relation the basicfinancial
                                      in         to                    statements  takenas a whole.

This report is intendedsolely for the information and use of the Auditor General,the General
Assembly,the Legislative Audit Commission,    the Governor,Agency management,     and federal
awardingagenciesand pass-through     entitiesand is not intendedto be and shouldnot be used by
anyoneotherthan these specified  parties.


 flW.                v6-.,/#,
                a-.2-,.
NYKIEL,        &
      CARLIN CO.,LTD.
Kankakee,
        lllinois

December 2005
      8.
THISPAGE           LEFT
        INTENTIONALLY BLANK
                                 STATEOF ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                     SCHEDULE FINDINGS
                             OF          AND QUESTIONED COSTS
                          FOR THE YEAR ENDEDJUNE 30, 2OO5


I.   SUMMARYOF AUDITORS'RESULTS


     Financial
            Statements
     Typeof auditors'
                   report
                        issued:unqualified
     Intemal
           controloverfinancial
                              reporting:
        . Materialweakness(es)identified?                      Yes      X   No
        . Reportable condition(s)
                                identified arenot
                                         that
             considered be material
                      to           weaknesses?                 Yes      X   Nonereported
     Noncompliance
                material financial
                      to                 noted?
                                statements                _Yes          X   No

     FederalAwards
     lntemal
           controlovermajorprograms:
        . Materialweakness(es)identified?                     Yes       X N o
        . Reportable condition(s)
                               identified arenot
                                        that
             considered be material
                      to          weakness(es)?           _   Yes       X   Nonereported
     Typeof auditors'
                   report
                        issued compliance
                             on         for
      major programs:                                     Unqualified

     Any audit      disclosed arerequired be
             findings        that        to
      reported accordance section
              in          with         of
                                  510(a)
      Circular
             A-133?                                           Yes       X     No
     ldentification majorprograms:
                  of
      Name Federal
         of       Proqram Cluster
                         or                                          CFDANo.
         StudentFinancial Cluster:
                         Aid
            Federal
                  Supplemental Educational
                                         Opportunity
                                                   Grants            84.007
            Federal
                  WorkStudyProgram                                   84.033
                  Perkins
            Federal       LoanProgram                                84.038
                  Pell
            Federal GrantProgram                                     84.063
            Federal
                  DirectStudentLoanPrcgram                           84.268
            Nursing
                  Student  Loans                                     93.364
            Scholarships Health
                       for      Professions      from
                                          Students
             Disadvantaged rou
                           Backg nds                                 93.925
           WIA Cluster:
            WIA AdultProgram                                         17.258
            WIA Dislocated
                         Workers                                     17.260
           Education Human
                   and    Resources                                  47.076
           Fundfor the lmprovement Postsecondary
                                of            Education              84.116
           Transition Teaching
                    to                                               84.350
           lmproving
                   Teacher     StateGrants
                         Quality                                     84.367
                            STATE OF ILLINOIS
                        ILLINOISSTATE UNIVERSITY
                SCHEDULEOF FINDINGS AND QUESTIONED COSTS
                     FOR THE YEAR ENDEDJUNE 30. 2OO5


SUMMARY AUDITORS'
      OF             (continued)
               RESULTS
Dollar
     threshold
             usedto distinguish
                              between A
                                    type
andtypeB programs:                                $680,571
Auditeequalifled low-risk
               as       auditee?                    X   Yes   No
FINANCIALSTATEMENTFINDINGS
None

FEDERALAWARD FINDINGS             COSTS
                     AND QUESTIONED
None
                                          STATEOF ILLINOIS
                                    ILLINOISSTATE UNIVERSITY
                                 FINDINGS  AND RECOMM    ENDATIONS
                                   For the Year Ended June 30, 2005

                                                    .
                                     CURRENTFINDINGS STATE


05-l Finding: Failureto GompleteEthics Trainins Within Six Months of Emplovment

The Universityfailed to provide ethics trainingwithin six months of initialemploymentfor some individuals
hired during fiscal year 2005.

The Universityconducted                for
                        annualtraining continuing  employees required the StateOfficials
                                                              as          by                and
Employees  EthicsAct (Act). However,the University not providethe initialsix month trainingas
                                                   did
requiredby the Act for 308 employeeshired during FiscalYear 2005. These personnel     were hired
subsequent the fall2Q04
           to             trainingdate and morethan six monthspriorto the earliest 2005training
                                                                                 fall
date.

The StateOfficials  and Employees EthicsAct (5 ILCS430/5-10)statesthata personwho fillsa vacancy
in an electiveor appointedpositionthat requirestrainingand a personemployedin a positionthat
requires trainingmustcomplete or her initial
                              his                         withinsix monthsaftercommencement
                                             ethicstraining                                   of
his or her officeor employment.

University officialsstatedthat they believedthe ethicstraining                           via
                                                              was required be completed the Office
                                                                          to
of the ExecutiveInspector   General's  web basedtrainingprogramor that trainingmaterials    had to be
obtained  fromthe Inspector General.The University's   understanding thatmaterials
                                                                     was              weregoingto be
provided the Inspector
          by               General's  Office. Because materials
                                                      the           were not provideduntilJulyof 2005
and  the Inspector  Generaldid not offer web basedtrainingin the secondhalf of fiscalyear 2005 the
University  could not completethe training required.
                                           as

Failure provideethicstraining
       to                    withinthe required                         to
                                              timeframemay causeemployees be unawareof
specificethicalrequirements Stateemployees.(Finding
                          of                         Code No. 05-1)

Recommendation
We recommend  the Universitydevelopprocedures ensurethat newlyhiredemployees
                                                 to                         receivethe
appropriate
          ethicstrainingwithinsix monthsof their initialdate of employment.

UniversitvResponse
The University agrees with the recommendation ensure that newly hired employeesreceivethe
                                                 to
appropriate ethicstraining
                         withinsix monthsof initial          In        to
                                                  employment. addition theannual  on-lineethics
trainingprogramcurrentlyprovidedto all employees,   the Universityhas implemented additional
                                                                                  an
periodictrainingprocessfor thoseemployees  hiredafterthe conclusion the annualtraining
                                                                   of                 program.
                                         STATE OF ILLINOIS
                                   ILLINOISSTATE UNIVERSITY
                                FINDINGS   AND RECOMMENDATIONS
                                  For the Year Ended June 30, 2005

                                                   .
                                    CURRENTFINDINGS STATE


05-2 Finding: Gontractsand Leases Not Filed with the State Comptroller'sOffice and did Not lnclude all
               the Required Gertifications for State Gontracts

Certain contracts and leases were not filed with the State Comptroller'sOffice as required and did not
includeall requiredcertifications Statecontracts.
                                for

We examined25 contractual                                             enteredinto bythe
                                    and 10 real propertyleaseagreements
                           agreements
         and notedthe following:
University

   .   Two contracts (8%)and two leaseagreements                   alltherequired
                                                 (20%)did notinclude             certifications.
       These includedcontractsfor insuranceservicesand equipmentrental. Some contractswere
       basedon hourlyratesand otherswere for a specifiedmaximumfee. We notedthe following
                    (statutory
       certifications                notedin parenthesis) clauses
                             reference                  or        were missingfromat leastone
       of the contracts leasesexamined:
                       or

           .   BriberyClause(30 ILCS500/50-5(d))
           .                            (30          1(b))
               ContractDebt Certification ILCS500/50-1
           .                               (30
               ForcedLaborAct Certification ILCS 583/10(a))
           .   FelonyConviction underSarbanes-Oxley
                               Act                               (30
                                                     Certification ILCS 500/50-10.5(b))

   .                         and two lease agreements(20%) tested were not filed with the State
       Twelve contracts(48o/o)
       Comptroller's
                   Officeas required.

The lllinoisProcurement    Code (30 ILCS 500/20-80(b)) and SAMS Procedure15.10.40requireState
agencies  to file contracts
                          exceeding $10,000with the StateComptroller within15 daysof execution.In
                                                                                         "File
         the
addition, Statewide     Accounting Management   System(SAMS)Procedure     15.20.10 states,    Only
contracts including  contractspaid entirely
                                          from locallyheldfunds do not requireobligationand are not
enteredinto the SAMS system. They must,however, filedwith the lllinoisOfficeof the Comptroller
                                                      be
(lOC)and must meet all IOC documentation certification
                                             and            requirements."

The lllinoisProcurementCode (30 ILCS500)and the StateProhibition Goodsfrom ForcedLaborAct
                                                                 of
(30 ILCS 583) requirethe above certifications be includedin all State contracts. ln addition,
                                            to                                              the
Statewide  AccountingManagement   System(SAMS)Procedure   15.20.40               list
                                                                    and 15.20.50 the required
content  whichshouldbe included all contractual
                               in                       and realproperty
                                               agreements                 leasesenteredintoby
the University.
                                                                              "Contract
Universityofficialsstatedthatcertaincontractsand leaseswere notfiledbecause a         Obligation
Document"  was not requiredto be filed with the Officeof the State Comptroller.Becausea contract
obligationdocumentwas not requiredthe University      believedit was not requiredto submit these
                 to
contracts/leases the Comptroller.

University                                                                           by
                                                                 abovewas an oversight the
                 also statedthat the omissionof the itemsmentioned
         officials
University.

Failureto file contractswith the State Comptroller a violation Statestatutesand regulations,
                                                 is           of                            and
                                                                                          doing
failureto includeall requiredcertifications contractsand leases may resultin the University
                                          in
business  with a vendor/lessor is prohibited
                              that           fromcontracting the State. (Finding
                                                             with                 CodeNo. 05-2)
                                         STATEOF ILLINOIS
                                   ILLINOISSTATE UNIVERSITY
                                FINDINGS   AND RECOM  MENDATIONS
                                  For the Year Ended June 30, 2005

                                                   .
                                    CURRENTFINDINGS STATE


05-2 Finding: Contracts and Leases Not Filed with the State Comptroller'sOffice and did Not lnclude all
               the RequiredGertificationsfor State Gontracts(continued)

Recommendation
                that
We recommend the University                                                      are
                                          procedures ensure contracts $10,000 filed
                                  implement          to       all       over
withthe Office the StateComptroller accordance Statestatutes guidelines. further
              of                      in           with            and         We
recommend University
            the           review procedures ensure
                                its         to                                   entered
                                                      contractualagreements leases
                                                                          and
intoby the Universityinclude the required
                            all                      for
                                         certifications Statecontracts.

Universitv
         Response
The University     withthe recommendationensure contracts $10,000 filedwiththe
              agrees                     to        all     over       are
      of
Office the StateComptroller accordance State
                           in          with     statutes guidelines hasimplemented
                                                       and        and
procedures do so. The University agrees
           to                    also                         to      all      and
                                          withthe recommendationensure contracts
leases        the
      include required  certifications
                                       STATEOF ILLINOIS
                                 ILLINOISSTATE UNIVERSITY
                              FINDINGS   AND RECOMM   ENDATIONS
                                For the Year Ended June 30, 2005

                                                 .
                                  CURRENTFINDINGS STATE


05-3 Finding: Propertv Control Reports

AgencyReports StateProperty
             of                                   of               inaccurate the
                            (C-15's) withtheOffice theComptrollerwere
                                   filed                                    and
RealProperty              wasfiledlate.
                     report
           Utilization

            the
We examined University's AgencyReport State
                                     of    Propertyfiled theOffice theComptrollerfor
                                                      with       of
                            year2005. Ourexamination
eachof thefourquarters fiscal
                     in                            revealed following
                                                           the      errors:

   . Fixed  asset  additions,  deletions and/or transferswerenotrecorded a timely
                                                                            in        manner.   Certain
     fixedassets    were not addedto the C-15reports        duringthe quarter whichthe transaction
                                                                               in
                T
     o c c urre d .h e fi rstq u a rte rC- l5includedadditionsof$6,144,304anddel eti ons of$56,142
     related theJune30,2004C-15.Thefourth
             to                                       quarter C-15didnotinclude            of
                                                                                  additions $924,265
     anddeletions $151
                     of       ,927  forthelandandsiteimprovements     lines.
   o Transfers fromthe Capital
                in                      Development  Board(CDB)    wereincorrectly recorded boththe
                                                                                            in
     "Transfers fromCDB" the"NetTransfers"
                 in              and                             in
                                                        columns thesame      quarter three thefour
                                                                                    for      of
     C-15reports    examined    during audit.These
                                        our             amounts  should havebeen
                                                                        not           shown the"Net
                                                                                             in
     Transfers"  column thequarter
                           until            following quarter which
                                                     the        in                         as
                                                                        theywerereported transfers
     in fromCDB.
   . Thesecond     quarter  C-15showed      $547,961 transfers which
                                                     of         out                   the
                                                                          wasactually total    transfer
     outreported thefirst
                   on           quarter  C-15.Thecorrect forthesecond
                                                          total               quartershould havebeen
     $827,787.
   . Totalsshownin the "Amount           Reportable"  Column  were incorrect all four C-15 reports
                                                                               on
     examined.     The "NetTransfers"     column           the
                                                  included current    quarter  "Transfers fromCDB"
                                                                                         in
     column                The
             amounts. totals          reported the
                                              in    'Amount  perAgency  Records"  column, identical
                                                                                          was
     to the "Amount    Reportable"   column.

Noneof theseerrors                          financial
                 hadanyeffect the University's
                            on                      statements.

In addition, notedthat the University not file the RealProperty
           we                       did                                 Report a timely
                                                              Utilization    in
        The
manner. report submitted theDepartment Central
                was          to              of       Management  Services days
                                                                          19        the
                                                                                after
         due
extended dateof November    28,2004.

TheStatewide
           AccountingManagement System (SAMS)   procedure29.20.10provides
                                                                        guidance forthe
     preparation theAgency
proper        of          Report Fixed
                                of     Assets  (C-15's). addition, DepartmentCentral
                                                       In       the           of
ManagementServices Property
                          ControlRules(44 lll AdminCode5010.400)          all
                                                                  requires changes   in
        records be made
equipment      to             30
                        within days.

University
         officials
                 statedthatdueto the length timerequired receive process information
                                          of              to      and         all
necessary properly
         to          record            it             for University record additions
                           fixedassets, is not feasible           to       all         and
        within daysof theendof eachquarter. regards theRealProperty
deletions     30                             In        to                              the
                                                                                  report,
                                                                        Utilization
requirements expanded the Department Central
            were           by               of        Management Serviceswhichrequired the
University perform
        to         extensive gathering.
                             data

       to
Failure submit accurate
                      Agency Reports StateProperty theOffice theComptroller result
                                                                         may     in
                                    of           to         of
the Stateincluding
                 inaccurate         in              (Finding
                                              report.
                          information itsannual            CodeNo.05-3)
                                        STATE OF ILLINOIS
                                  ILLINOIS  STATE UNIVERSITY
                               FINDINGS   AND RECOM  MENDATIONS
                                 For the Year Ended June 30, 2005

                                                 .
                                  CURRENTFINDINGS STATE


05-3 Finding: Propertv Control Reports (continued)

Recommendation
                the
We recommend University                                         to    the
                           review procedures completing reports ensure accuracy
                                 its       for         C-15
of information                                                             the
              provided theOffice theComptroller. alsorecommend Universityfile Real
                     to         of            We             the
Property           Report a timely
         Utilization    in        manner.

Universitv Response
             agreeswiththe recommendation reviewits procedures completing C-15reports
The University                               to                for           the
and has modifiedits reportingprocedures includeadditions
                                         to             and deletions a more timelyfashion.
                                                                     in
             alsoagreeswiththe recommendation filethe RealProperty
The University                                    to                              in
                                                                             Report a timely
                                                                   Utilization
mannerand did file the 2005 reportby the requireddate.
                                        STATE OF ILLINOIS
                                  ILLINOISSTATE UNIVERSITY
                               FINDINGS   AND RECOMMENDATIONS
                                 For the Year Ended June 30, 2005

                                                  .
                                   CURRENTFINDINGS STATE


05-4 Finding: Time Sheets Not Maintainedin Gompliancewith the State Officials and EmploveesEthics
                As.t
lllinois             (University) not require
       StateUniversity          did                 time reporting all of its employees
                                             positive            for                  in
compliance the State
           with                and
                       Officials Employees  Ethics (Act).
                                                  Act

Ofthe3Temployees'timesheetsthatwereexamined,    10(allfacultyorsalarycivilserviceemployees)did
notsubmit           documenting timespent
           timesheets           the           eachdayon official              to
                                                                Statebusiness the nearest
quarterhour.We noted theUniversity's
                      that             procedures required
                                                  only        positive reporting hourly
                                                                     time        for
civilservice employees student
                      and        workers. Exempt  civilserviceand academic  employeeswere
required submit
        to       benefitusagecardsthatidentified
                                               leavetimeused(negative reporting).
                                                                       time

TheAct requires University
               the          (throughpoliciesadopted the lllinois
                                                   by          Board Higher
                                                                     of      Education)
                                                                                     to
adoptpersonnel policies                           (5 ILCS                 "the
                                                                    states, policies
                                                                                   shall
                               with
                       consistent theAct. TheAct         430/5-5(c))
require Stateemployees periodically
                       to          submit timesheets documenting timespenteachdayon
                                                                 the
official
       Statebusiness thenearest
                    to           quarter
                                       hour."

University       stated members thehighereducation
         officials     that          of                  community receivedmemo
                                                                 had      a      from the
ExecutiveInspector General             "it
                            that stated appears   thata system absence
                                                              of      reporting
                                                                              wouldbe an
appropriate
          method timekeeping
                   of                    the
                                   under Ethics   Act. Under system, employee
                                                            this     an         wouldonly
reporttimeduring theirnormal  workschedule was not spentat workand provide category
                                             that                           the        of
leavetaken thattimeaway."
          for

Bynotrequiringpositive reporting
                     time                                        is
                                    fromallitsemployees, University notin compliance
                               sheets                 the
withtheAct. (Finding
                   CodeNo.05-04)

Recommendation
We recommend that the Universityrequire all employees to maintain time sheets in compliancewith the
Act.

UniversitvResponse
The University  does not agreethat its systemof requiring
                                                        non-hourly           to
                                                                   employees reportabsencetime
duringtheirnormalwork              is
                         schedule not in compliance                       and Employees
                                                     withthe StateOfficials              EthicsAct
(Act). The lllinoisOfficeof Executive InspectorGeneral,                                the
                                                        who is chargedwith implementing Act has
indicated University's
         the              current absencemanagement    system complieswiththeAct. lmplementationof
a comprehensive    positivetime reporting systemwouldincursignificant         costwhileyielding
                                                                     additional                 no
real benefit. The currenttime reporting  systemutilized the University
                                                       by             does accomplish needfor
                                                                                      the
employees accountfor time spenton officialStatebusinessin a cost beneficial
           to                                                                   manner.

Auditors'Comment
                                                                         "publicinstitutions
The State Officialsand Employees EthicsAct defines"Stateagency"to include                  of
higherlearning. ." 5 ILCS430/1-5. lllinois
               .                                       is        as "public
                                         StateUniversity defined a         institution higher
                                                                                     of
learning"in Section2 of the HigherEducationCooperation Act. 110 ILCS 22012. Further,the State
        and Ethics defines"Stateemployee" be "anyemployee a Stateagency."5 ILCS43011-
Officials          Act                      to                of
5.
                                         STATEOF ILLINOIS
                                   ILLINOISSTATE UNIVERSITY
                                FINDINGS   AND RECOM  MENDATIONS
                                  For the Year Ended June 30, 2005

                                                   .
                                    CURRENTFINDINGS STATE


05-4 Finding: Time Sheets Not Maintainedin Compliancewith the State Officials and EmploveesEthics
                Act (continued)

Auditors' Gomment (continued)
As noted in the finding, the State Officials and Employees Ethics Act requires "State employees to
periodicallysubmit time sheets documenting the time spent each day on official State business to the
nearest quarter hour. . ." 5 ILCS 430/5-5 (c). This timekeeping requirement went into effect March 1,
2004.The negative timekeeping  system                 faculty salary service
                                      usedfor University     and       civil      employees
requiresthoseemployees report
                       to       onlytimeawav  fromState          not
                                                       business, thetimespent    eachdayon
Statebusiness. Further, is logical assume
                     it          to       that,byadopting language, legislature
                                                         this          the          meant to
effect change themethod
     a        in            usedbyState           to
                                        employees record  theirtime- thatis,to adopt positive
                                                                                   a
timekeepingsystem.

Finally, memorandum theOffice the Executive
       the            from      of            lnspector               the
                                                             uponwhich University
                                                       General
     in
relied maintaining customary
                 its       negative
                                  timekeeping
                                           system                            that
                                                                  clearlystates it
                                                  forfacultyemployees
"isnota legal
            opinion."

Theauditors  continue believe a positive
                    to      that          timekeepingsystem State
                                                           for    employees required the
                                                                            is      by
StateOfficials Employees
              and           EthicsAct. lf the University       with             we
                                                      disagrees thisconclusion, further
recommend it seeka formal,
            that             written
                                   opinion  fromtheAttorney
                                                          General's Office therequirements
                                                                         on
               provision.
of thisstatutory
                                         STATE OF ILLINOIS
                                   ILLINOIS  STATE UNIVERSITY
                                FINDINGS   AND RECOM  MENDATIONS
                                  For the Year Ended June 30, 2005

                             PRIORFINDINGS            -
                                          NOT REPEATED STATE


05-5 Finding: Noncompliancewith UniversitvFacultv Researchand Consultinq Act

During the prior period, the Universitydid not comply with the UniversityFacultyResearchand Consulting
                                                                  were not approvedpriorto the
Act. Ten of the 25 faculty requestsfor approvalof outsideemployment
startof employment.(Finding   Code Nos. 04-1,03-3)

Status: Not repeated.
Duringour audittesting, notedno instances
                       we                           of                  not
                                                            employmentwas approved
                                        whereapproval outside
priorto the startof employment.
                                 STATE OF ILLINOIS
                             ILLINOISSTATE UNIVERSITY

           SUPPLEMENTARY         FOR STATE COMPLIANCE
                       INFORMATION                   PURPOSES

                                     SUMMARY


Supplementary          for
             Information StateCompliance      presented this section the report
                                       Purposes       in            of
       the
includes following:

  Fiscal         and
       Schedules Analysis
              of           of
     Schedule Expenditures FederalAwards
          to
     Notes the Schedule Expenditures FederalAwards
                        of            of
     Schedule Appropriations,
              of                         and
                             Expenditures Lapsed   Balances
     Comparative Schedule NetAppropriations,
                        of                             and
                                            Expenditures
      Lapsed  Balances
     Comparative        of          and         -
                 Schedule Revenues Expenses University            Fund
                                                             Income
              of       in
     Schedule Changes StateProperty
     Comparative Schedule CashandCashEquivalents
                        of
     Comparative        of
                 Schedule Investments
     Analysis Significant
             of        Variations Certain
                                 in               and
                                          Revenue Expense      Accounts
     Analysis Significant
             of        Lapse  PeriodSpending
     Analysis Significant
             of        Variations Certain
                                 in                        Accounts
                                          Assetand Liability
     Comparative                                      of
                 Schedule Receivables AgedAnalysis Receivables
                        of           and

         of
  Analysis Operations
    Agency  Functions Planning
                     and          Program
    Employment           (Unaudited)
                Statistics
    Annual               (Unaudited)
            CostStatistics
    Emergency  Purchases
    Service Efforts Accomplishments
                  and                  (Unaudited)
                       and
    Schedule Federal Nonfederal
             of                       Expenditures
    Summary Agency
             of        Operations Function Program
                                   by       of              -
                                                     Activity
       StudentEnrollment          (Unaudited)
                         Statistics
    Tuition FeeWaivers
           and             (Unaudited)
    1Oth RoomUtilization
         Day                (Unaudited)
    DebtFinanced University
                  by           RelatedOrganization
    Acquisition RealEstate University Funded
               of           by          Not       by
       Separate        Appropriation
                Specific

  Special                 for    of
        DataRequirements Audits Universities
    Entity       Statements
          Financial
      Local Funds:
        Statement NetAssets
                 of
                 of
        Statement Revenues,   Expenses, Changes NetAssets
                                      and       in
      ServiceDepartments:
        Statement NetAssets
                 of
        Statement Revenues,
                 of                             in
                              Expenses, Changes NetAssets
                                      and
              Facilities:
      Auxiliary
                 of
        Statement NetAssets
        Statement Revenues,
                 of           Expenses, Changes NetAssets
                                      and       in
              Sheet Indirect
    Calculation     for       CostCarryfonrvard




                                        -20 -
                                      STATE OF ILLINOIS
                                  ILLINOISSTATE UNIVERSITY

                         INFORMATION
             SUPPLEMENTARY         FOR STATE COMPLIANCEPURPOSES

                                     SUMMARY(continued)

    Special Data Requirements for Audits of Universities(continued)
      Calculation        for
                   Sheet Current    Excess  Funds:
          Current Unrestricted LocalFunds:
           Continuing  Education Pubic
                                 and        Services
           Sales  andServices Education
                               of           Activities
           Student            and
                    Programs Services
           Field Tripsand Foreign  Study
          Service Departments
          Auxiliary         -
                   Facilities Revenue  Bonds:
           Student  Housing
           Student  Activities
           Parking  Services
      AuxiliaryFacilities,Activities, Accounting
                                   and             Entities
                 of
      Summary Foundation                 to
                                Payments the University
      Noninstructional  Facilities
                                 Reserve
      Disclosure Support
                  of         WhichAuxiliary          and        HaveReceived
                                            Facilities Activities
          During YearfromState
                the                 Appropriated Funds
      Illinoisnstitute Entrepreneu ip Education
             I        for            rsh             Financial
                                                            Information
      FY2005   Performance Budget Cumulative
                             Data        and                    Report
                                                        Quarterly     ChildAbuse
          Prevention Tax Checkoff
                     and              Grants, Contract No.0815799015(Unaudited)

Theauditors'  report covers Supplementary
                   that      the                         for
                                              Information State  CompliancePurposespresented
in theCompliance  ReportSection      that                     to
                               states it hasbeensubjected theauditing     procedures
                                                                                   appliedin
the auditof the basicfinancial
                             statements in the auditors'
                                       and,                        except the portion
                                                            opinion,     for          marked
"unaudited," whichtheyexpress
             on                            it
                                 no opinion, is fairly     in          respects relation the
                                                     stated all material      in       to
basic financialstatementstakenas a whole.
                                                       STATE OF ILLINOIS
                                                   ILLINOISSTATE UNIVERSTIY
                                          SCHEDULE EXPENDITURES FEDERALAWARDS
                                                  OF                 OF
                                                     Year Ended June 30, 2005

           Federal Grantor/                                                                                          Passed-
        Pass-Through Grantor/                                      CFDA         Pass-Through                        Throughto
        Proqram or Cluster Title                                  Number       Granto/s Number    Expenditures     Subrecipients

STUDENTFINANCIALAID CLUSTER
    U.S. Departmentof Education
*     FederalSupplementalEducationalOpportunity
                                              Grants              84.007                          $     535,608
*     FederalWork Study Program
*
                                                                  84.033                                839,362
      FederalPellGrantProgram                                     84.063                               9,000,950
"     FederalPerkinsLoanProgram                                   84.038                              10,485,686
*     FederalDirectStudentLoan Program                            84.268                              58,385,787
  U.S.Departmentof Healthand Human Services
*               for
    Scholarships HealthProfessions
                                 Studentsfrom
      Disadvantaged Backgrounds                                   93.925                                 20,352
'     NursingStudentLoans                                         93.364                                310,553
        TotalStudentFinancial
                            Aid                                                                       79,578,298
OTHERPROGRAMS
    U.S. Departmentof Agriculture
    ** Grantsfor AgriculturalResearch
                                     CompetitiveResearchGrants    10.206                                108,180
       NationalSchoolLunchProgram
         (Passed throughlllinoisStateBoardof Education)           10.555                                 18,965
       Childand AdultCare Food Program
         (Passed throughlllinoisStateBoardof Education)           10.558
           Total U.S. Departmentof Agriculture

    U.S, Departmentof Gommerce
    ** Economic   AdjustmentAssistance(Passed through
         lllinoisManufacturingExtensionCenter)                    11.307                                 10,967
    *" Manufacturing  ExtensionPartnership(Passedthrough
        lllinoisManufacturing ExtensionCenter)                    11.611
            TotalU.S.Department Commerce
                                of

    U.S. Department of Defense
    ** Military
              MedicalResearchand Development                      12.420                                354,900          86,413
    U.S. Departmentof Housing and Urban Development
      CollegeHousingDebtServiceGrantProgram                       14                                    160,640
                  of
    U.S.Department the Interior
    *" National         Geologic
              Cooperative       MappingProgram                    15.810                                 4,287
    U.S. Departmentof Justice
       Sex OffenderManagementDiscretionary     Grant
         (Passed throughOfficeof the lllinois
                                            Attorney General)     16.2032002-WP-BX-o001                  30,839
    ** NationalInstitute JusticeResearch,
                       of                   Evaluationand
         Development        Grants(Passed
                      Project                 throughCase
        Western ReserveUniversity)                                16.560USDOJ
                                                                            2003-RP-BX-1001
           Totalfor U.S.Department Justice
                                   of

  U.S. Department of Labor
    WIA CLUSTER
*   WA AdultProgram(Passed    throughlllinoisCommunity
      CollegeBaord)                                               17.258                                120,000         29,461
-   WIA Dislocated Workers (Passedthroughthe lllinois
      Departmentof Commerceand EconomicOpportunity)               17.260 02-11101                       37,848
-   WIA Dislocated Workers                                        17.260                              1,597,561       1,092,506
        Totalfor U.S. Department Labor
                                of                                                                    1,755,409       1,121,967

    NationalFoundation of the Arts and Humanities
     Promotionof the Humanities- Divisionof Preservation Access
                                                        &         45.149                                  3,500
                                -
     Promotion the Humanities Professional
               of                             Development         45.163                                117,681
     StateLibraryProgram  (Passed throughlllinoisStateLibrary)    45.310 05-0804-4007,0304-5194          12,956
                      Foundation the Arts and Humanities
          TotalNational           of                                                                    134,137

    NationalScience Foundation
    ** Mathematical Physical
                  and        Sciences                             47.049                                273,025
       Mathematical Physical
                  and        Sciences
        (PassedthroughAmerican Physical
                                      Society)                    47.049
                                                    STATEOF ILLINOIS
                                                ILLINOISSTATE UNIVERSTIY
                                       SCHEDULE EXPENDITURES FEDERALAWARDS
                                               OF                 OF
                                                  Year Ended June 30, 2005

        FederalGrantor/                                                                                                Passed-
     Pass-Through Grantor/                                          CFDA            Pass.Through                      Through to
     Proqramor Cluster Title                                       Number          Grantor'sNumber   Expenditures    SubreciPients

             (CONTTNUED)
oTHER PROGRAMS

 NationalScience Foundation(Continued)
            &
  Computer Information Science& Engineering                        47.070                                    110

 ** Biological
             Sciences                                              47.074                               1,207,534         163,396
 *. Biological      (Passed
             Sciences      throughlowa StateUniversity)            47.074 420-40-04                        51,641
                                                                                                        1,259,175         163,396

 ** Social,Behavioral, Economic
                    and       Sciences
                                     Education                     47.075                                   1,187

    Education
            and HumanResources                                     47.076                                951,545           65,537
 .. Education
            and HumanResources                                     47.076                                  3,208
 ** Education                (passed
            and HumanResources      through
     ChicagoState University)                                                            53175
                                                                   47.076 HRD-0000341,53228,              28,110
    Education                 (passed
             and HumanResources      through
      University Missouri)
               of                                                                       &
                                                                   47.076 Esr-9714999/rSU CG004954         46,713
 ** Education                 (passed
             and HumanResources      through
      Utah State University)                                       47.076 04144700'l                     104,998
                                                                                                        1,134,574          65,537

       Total NationalScienceFoundation                                                                  2,668,993         228,933

 U,S.Small BusinessAdministration
   SmallBusiness            Center(passed
                  Development            through
     lllinoisDepartment Commerce
                      of         and EconomicOpportunity)                        04-56106
                                                                   59.037 05-18106,                       24,489

 EnvironmentalProtectionAgency
    StateIndoorRadonGrants(Passed    throughlllinoisState
      Emergency   Management Agency)                               66.032 1289lSUMD\EMA-05-000106         34,502
 ** WaterQuality            Agreements
                  Cooperative           (Passed  throughlllinois
      Department PublicHealth)
                   of                                              66.463 45300567                       100,852           67,400
        Total for Environmental
                              ProtectionAgency                                                           135,354           67,400

 U.S. Departmentof Energy
 ** FossilEnergyResearchand Development
      (PassedthroughUniversity lllinois)
                             of                                                 46766
                                                                   81.089 04-271,                         12,718

 U.S, Departmentof Education
 *. Adult Education StateGrantProgram
                   -
      (Passed throughlllinoisCommunity
                                     CollegeBoard)                 84.002 AE104004                            86
                   -
    Adult Education StateGrantProgram
      (Passed throughlllinois        College
                             Community      Board)                 84.002 AEL5004                        313,940
                                                                                                         314,026

   TRIO-StudentSupport
                     Services                                      84.042                                234,712

    VocationalEducation- Basic Grantsto States
      (Passed throughlllinoisCommunity College Board)                                  &
                                                                   84.048 CTE104001,4002,5006            215,799
 ** VocationalEducation- Basic Grantsto States
      (Passed throughlllinoisStateBoardof Education)               84.048 4720                               524
    Vocational          -
              Education BasicGrantsto States
      (Passed throughlllinoisStateBoardof Education)               84.048 4720                           180,000
                                                                                                         396,323

   Fundfor lmprovement Postsecondary
                      of             Education                        1
                                                                   84.1 6                                 45'1,025         26,136
   Fundfor lmprovement Postsecondary
                      of             Education
     (Passed throughEmporiaStateUniversity)                        84.116 426-01                           5,879 _____-________=_
                                                                                                         456,904         26,136

    Safe and Drug-FreeSchoolsand Communities- State Grants
      Programs (Passed throughlllinoisStateBoardof Education)      84.186 4400                                33
 .. Safeand Drug-Free Schools                 -
                             and Communities StateGrants
      Programs (Passed throughlllinoisStateBoardof Education)      84.186 4400                             2,351
                                                                                                           2,384
                                                           STATE OF ILLINOIS
                                                       ILLINOISSTATE UNIVERSTIY
                                        SCHEDULE EXPENDITURES FEDERAL
                                               OF             OF        AWARDS
                                                 YearEndedJune 30, 2005
           Federal Grantor/                                                                                       Passed-
        Pass-Through Grantor/                                    CFDA           Pass-Through                     Through to
        Proqram or Cluster Title                                Number         Granto/s Number   Expenditures   Subrecipients

oTHER PROGRAMS(CONTTNUED)

    U.S. Departmentof Education (Continued)

     Teachersand PersonnelGrants                                84.195                               455,328
     Fund for the lmprovementof Education                       84.215                               176,285
  ** State Grantsfor InnovativePrograms
       (Passed   throughlllinoisStateBoardof Education)         84.298 4100                            3,363
     CivicEducation-Cooperative   EducationExchange Program
       (Passed   throughThe SageColleges)                       84.304 tSU                             4,036
     SpecialEducation-State   PersonnelDevelopment              84.323 rCODA                          30,430
     Researchin SpecialEducation                                84.324                               163,960          52,585
     TeacherQualityEnhancement      Grants                      84.336                              1,051
                                                                                                        ,223         801,734
*    Transition Teaching
                to                                              84.350                               328,078
*    lmprovingTeacherQualityState Grants (passedthrough                           0007,0017,
                                                                       04F983490004,
       lllinoisBoardof HigherEducation)                         84.367 & 05F983NC1804,011,015        354,896          38,919
*    lmproving  TeacherQualityStateGrants(passedthrough
       lllinoisStateBoardof Education)                          84.367 4932,4935-00,
                                                                                   4935-01           940,902
  *" lmproving  TeacherQualityStateGrants(passedthrough
       lllinoisStateBoardof Education)                          84.367 4932                           11,741
                                                                                                    1,307,539         38,919

      NationalWriting Project                                   84.928 92-t103                        34,400
      CivicEducation                                            84.929 R929A030001,Q929A030001       126,971
          TotalU.S. Department Education
                              of                                                                    5,085,962        919,374

    U.S, Departmentof Healthand Human Services
    ** AppliedToxicologicalResearch
                                    & Testing                   93.114                                41,340
    ** MentalHealth Research
                             Grants                             93.242                               192,142
    '* SubstanceAbuse and Mental
                                 HealthServices- Projectsfor
         Regionaland NationalSignificance(Passedthrough
         ChestnutHealthSystems)                                              1345,
                                                                93.24303GF0033          1346
                                                                                 03GF0032              2,056
    ** Drug Abuse ResearchPrograms
                                                                93.279                                60,684

              for                         -
       Centers DiseaseControl& Prevention Investigations&
        Technical Assistance                                    93.283                                87,510          53,251
    ** Centers DiseaseControl
              for                         -
                              & Prevention Investigations
                                                        &
        Technical          (Passed
                  Assistance      through lllinois
                                         the
        Department PublicHealth)
                   of                                           93.28343280029,57081010               39,9t 5
              for                         -
       Centers DiseaseControl& Prevention Investigations&
        Technical          (Passed
                  Assistance      throughthe lllinois
                   of
        Department PublicHealth)                                93.28353286007                        12,402
                                                                                                     139,827          53,251
       MinorityHealthand HealthDisparities    Research
         (Passed throughUniversity lllinois)
                                      of                        93.307 1P20MD00524-0'l                33,399
       AdvancedEducation   Nursing   Traineeships               93.358                                27,938
    ** NursingResearch(Passed
                                   through Universityof lowa)   93.36121503866                         2,500
    ** AcademicResearch
                           Enhancement     Award                93.390                               105,153
       State Court lmprovementProgram(Passedthrough
         AdministrativeOffice of the lllinoisCourts)            93.586 CIP-G-0204, 1
                                                                                021                    1,215
    ** Community-Based
                         Child Abuse PreventionGrants (passed
         throughlllinoisDepartment Childand FamilyServices)
                                     of                         93.5900815799024,0815799015          117,205

      ChildWelfare ServicesTrainingGrants                       93.648                               106,981
      Child Welfare ServicesTrainingGrants
       (Passed  throughUniversity lowa)
                                  of                            93.648 1 27515
                                                                             00                       14,859
                                                                                                     121,840
    ** Diabetes,
               Endocrinology Metabolism
                             and          Research              93.847                                35,689
    * KidneyDiseases,  Urologyand Hematology Research
         (Passed throughUniversity Missouri)
                                 of                             93.849 R01DK37512-17                  21,188
    ** ExtramuralResearch Programs the Neurosciences
                                    in
         and Neurological
                        Disorders                               93.853                                55,787


                                                                -24-
                                                     STATEOF ILLINOIS
                                                ILLINOISSTATE UNIVERSTIY
                                       SGHEDULEOF EXPENDITURES FEDERALAWARDS
                                                                  OF
                                                  Year Ended June 30, 2005

        Federal Grantor/                                                                                              passed-
     Pass-Through  Grantor/                                          CFDA         Pass-Through                       Through to
     Programor ClusterTitle                                         Number       Grantor'sNumber     Expenditures   Subrecipients

             (CONTTNUED)
oTHER PROGRAMS

 U.S.Departmentof Healthand Human Services(Gontinued)
 .* Microbiology Infectious
                and         Diseases Research                       93.856                               312,225          26,835
 .- Microbiology Infectious
                and         Diseases Research
     (Passed  throughUniversity Florida)
                              of                                    93.856 S99006,UF-IFAS-04022551        11,364
        Total93.856                                                                                      323,589          26,835

 ** Biomedical
             Research
                    and Research
                               Training                             93.859                                91,237
 ** Biomedical
             Research
                    and Research
                               Training                             93.859                                37,217
 .- Biomedical      and Research
             Research          Training
     (PassedthroughNew MexicoState University)                      93.859 R457962


 .. Nationallnstituteof Child Healthand Human Development
      ExtramuralResearch                                            93.865                                  (62e)
 ** AgingResearch                                                   93.866                                53,301
 ** MedicalLibraryAssistance(PassedthroughNationalLibrary
      of Medicine)                                                  93.879 1G13LM008353-01                65.287

    Grantsto Statesfor Operationof Officesof Rural Health
      (Passed throughlllinoisDepartment PublicHealth)
                                        of                          93.91 22580312,
                                                                        3         32580207,
                                                                                          39580206            10
 ** Grantsto Statesfor Operationof Officesof Rural Health
      (Passed throughlllinoisDepartment PublicHealth)
                                        of                          93.913 32580207
                                                                                                              46



    Cooperative             to
                Agreements Support     Comprehensive SchoolHealth
      Programsto Preventthe Spreadof HIV and Other lmportant
      HealthProblems  (Passed  throughlllinoisStateBoardof Ed)      93.938 MY04432                         44,873
 ** Agricultural
               Healthand SafetyPrograms
      (PassedthroughOhio State University)                          93.956 RF No 746096                   56,105
    ScienceEducationPartnership    Award
      (Passed throughVanderbilt   University)                       93.960 2 R25GM60190-02                 3,824
 ** Maternaland Child HealthServicesBlock Grant to the States
                                                                                                           q 7?n
      (Passed throughlllinoisDepartment HumanServices)
                                         of                         93.994 11G5571000
        TotalU.S. Department Healthand HumanServices
                               of                                                                       1,663,516         80,086

 TOTAL EXPENDITURES FEDERAL
                  OF       AWARDS                                                                               _$.___?f91JZ9_
                                                                                                     _$._!1!92119_
 ' - Major Program
  '* - Research
              and Development
                            Cluster
                                   STATE OF ILLINOIS
                              ILLINOISSTATE UNIVERSITY
                 NOTESTO SCHEDULEOF EXPENDITURES FEDERALAWARDS
                                                     OF
                            For the Year Ended June 30, 2005


NOTE 1 . BASISOF PRESENTATION

The accompanying schedule expenditures federalawardsincludes federalgrantactivity the
                          of              of                  the                     for
yearendedJune 30, 2005,and is presented the accrualbasisof accounting.
                                         on                                            in
                                                                       The information this
scheduleis presentedin accordance with the requirements OMB Circular
                                                      of            A-133, Auditsof Sfafes,
Local Governments,and Non-ProfitOrganizations.Some amountspresentedin this schedulemaydiffer
from amountspresented or used in the preparation the basicfinancial
                      in,                        of,              statements  due to specific
reporting           prescribed OMB Circular
         requirements          by              A-133.


    2.
NOTE LOANSOUTSTANDING

             had the followingloan balancesoutstanding June 30, 2005. These loan balances
The University                                       at
outstanding also included the federalexpenditures
          are              in                     presented this schedule.
                                                           in

                                                                          Outstanding
                                                                          Balanceat
                                                                         June30.2005

      Student
Nursing     Loans                                                         $     310,553
      LoanProgram
Perkins                                                                       10.485.686

Total loans outstanding                                                  $r_0J96239
There                                        LoanProgram.
     wereno administrative charged the Perkins
                        costs    to


NOTE . GUARANTEED
   3           STUDENT   .                         AWARDS
                                 EXPENDITURESFEDERAL
                     LOANS NONCASH         OF

During auditperiod, University
      the         the                          amounts newloansunderthe Federal
                             processed following
                                     the             of
     Student
Direct     Loans Program:

     Student
Direct      LoansProgram                                                  $47,45 1,141
Direct    Loanfor Undergraduate
     Parent                  Students     (PLUS)
                                    Program                                10.934.646

Total                                                                     $58385J82
There were no administrativecosts charged to the loan program.




                                              -26 -
                                        STATEOF ILLINOIS
                                    ILLINOISSTATE UNIVERSITY
                  SCHEDULEOF OF APPROPRIATIONS,
                                              EXPENDITURES AND LAPSEDBALANCES
                                APPROPRIATIONSFOR FISCALYEAR 2OO5
                              FOURTEEN MONTHSENDEDAUGUST31,2OO5



                                                                             Lapse
                                         Appropriations Expenditures   Period
                                           (netafter      through    Expenditures           Total           Balances
                                          transfers) June30,2005 7t1 - 8t31t05           Expenditures       Lapsed

GeneralRevenue Fund-001(P.A. 93-0842)
  Personalservices                    $ 71,652,000 $          70,864,963 $    787,037    $ 71,652,000 $
  Groupinsurance                         3,078,300             3,078,300                    3,078,300
  Contractual
            services                     1,921,700             1,921,700                    1,921,700
  Commodities                             300,000               300,000                      300,000
  Equipment                              2,000,000             2,000,000                    2,000,000
  Teleepmmunicationsservices              500,000               500,000                      500,000
  Permanentimprovements                  1,000,000             1,000,000                    1,000,000

TOTALAPPROPRIATED
                FUNDS                    $ 80,452,000 $ 79,664,963 $          787,037 $ 80,452,000 $                 -




Note 1:   Data is taken from University
                                      recordsand has been reconciled the recordsof the State Comptroller.
                                                                   to




                                                      -27 -
                               STATEOF ILLINOIS
                         ILLINOIS  STATEUNIVERSITY
   COMPARATIVE       OF
             SCHEDULE NETAPPROPRIATIONS,                 AND LAPSEDBALANCES
                                              EXPENDITURES,
                        For the Year Ended June 30, 2005


                                                                       FiscalYear
                                                               2005             2004

      Revenue
General         Fund- 001:                                  P.A.93-0842   P.A.93-H83731
               (Net
  Appropriations aftertransfers)                               80,452,000 $  80,451,950
  Expenditures:
    Ordinary contingent
             and          expense                                                78,904,476
    Personal services                                          71,652,000
    Group  insurance                                            3,078,300                _
    Contractual services                                        1,921,700
    Commodities                                                  300,000
    Equipment                                                   2,000,000
    Telecommunications services                                  500,000
    Permanent  improvements                                     1,000,000
        TotalExpenditures                                      80.452.000        78.904,476
  Lapsed Balances                                                                 1,547,474

StateGollege
           and UniversityTrustFund- 417
               (Net
  Appropriations aftertransfers)                                                    30,000
   Expenditures:
     Studentfinancial
                    assistance
       TotalExpenditures
   LapsedBalances                                                                   30.000

GRAND TOTAL  ALL FUNDS
              (Net
  Appropriations aftertransfers)                               80,452,000        80,481,950
  Expenditures                                                 80,452,000        78,904,476
  LapsedBalances                                                                  1,577,474


Note: In FY04, University
               the        received lump-sum
                                 a         appropriation theGeneral
                                                       for               Fund
                                                                   Revenue   fromtheState
               to
     of lllinois be spent thediscretion theUniversity.
                        at            of            During     the
                                                           FY05, Statebegan           funds
                                                                           appropriating
                 line
      by specific item.

Note: DuringFY04, Staterescinded
                the                                                    in     balance.
                                                        whichis included tapsed
                               $1,547 of thisappropriation
                                    ,474




                                            28-
                                         STATE ILLINOIS
                                              OF
                                            STATE
                                     ILLINOIS     UNIVERSITY
                                     SCHEDULE REVENUES EXPENSES.
                            COMPARATIVE       OF          AND
                                               INCOME
                                      UNIVERSITY       FUND
                                  YearsEndedJune 30.2005AND2004



                                                                                 2005                    2004

REVENUES
    Registrationfees                                                        $ 68,700,894            $ 61,225,160
                -
    Registration extension                                                      316,262                 271,167
    Enrollmentdepositfee forfeitures                                              18,702                  16,081
    Tuitionand fees waived                                                     3,084,600               2,752,500
    Libraryfines                                                                  25,823                  29,861
    lnvestment income                                                           270,270                         9
                                                                                                         10 8 , 1 9
    Net increase(decrease)in fair marketvalue of investments                      30,728                 (22,064)
    Paymentson behalfof University                                               882,152                838,283
    Giftsand donations                                                         1,611,758                  32,252
    Other                                                                        150,417                  71,952

                                                                          _q_75,9%q99_              $ 65.323.391


EXPENSES
    Personalservices                                                        $ 36,665,388            $ 24,573,188
    Medicare                                                                   1,286,722               1,227,009
    Contractualservices                                                       14,869,037              20,184,797
    Travel                                                                       931,562                 941,954
    Commodities                                                                2,451,319               2,561,476
    Equipment library
              and       books                                                  4,390,274               6,686,635
             of
    Operation automotive equipment                                               324,990                 291,894
    Telecommunications services                                                  793,542               1,219,401
    Tuition feeswaived
           and                                                                 3,084,600               2,752,500
    Awards, grants, matching
                  and         funds                                            2,297,366               1,362,675
    Permanent improvements                                                       458,272               2,124,214

                   Subtotal                                                    67,553,072              63,925,743

      GASB#35adjustments:
         Depreciation                                                            8,481,683               7,354,906
         Equipmentadditions/disposals                                           (3,031,327)             (5,314,847)
               leaseinterest
         Capital                                                                    8,099                   11,710

                                                                            $ 73,011,527            $ 65,977,512


Note 1: Pursuantto PublicAct No. 90-10, responsibility   and controlof the lllinoisState UniversityIncomeFund was
        transferreddirectlyto the University. lt is now a non-appropriated,  localfund maintainedby the University.

Note 2: Certain2004 amountshave been reclassified conformwith the 2005 presentation.See Note 21 to the
                                                to
        FinancialStatements.




                                                           -29 -
                                     STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                         SCHEDULEOF CHANGESIN STATE PROPERTY
                              For the Year Ended June 30, 2005


Datafor thisscheduleincludes accounting
                           all          entities was obtained
                                               and             fromUniversityrecordswhich
have been reconciled the basicfinancial
                    to                statements and to the property               to
                                                                    recordssubmitted the
Officeof the Comptroller.


                                    Beginning                                    Ending
                                     Balance        Additions   Retirements      Balance

Land                               $ 13,667,937 $   564,748 $ 151,92_7$           14,080,758
Landimprovements                     16,374,953    359,517                        16,734,470
lnfrastructure                       12,682,559                                   12,682,559
Buildings                           297,309,004 39,376,989            647,335    336,038,658
Equipment                            52,621,493   7,979,538 1,333,023             59,268,008
Librarymaterials                     54,531,715 3,020,661                         57,552,376
Construction progress
            in                       29.054.155 1 8 . 1 3 6 . 0 3 6 36.498.939    10,691.252

         Subtotal                    476.241.816$_59t37J89      s38$3r21         507.048.081

Lessaccumulated             for:
                 depreciation
   Landimprovements                    6,481,555$   366,742 $            6,848,297
   lnfrastructure                      4,141,690    293,828              4,435,518
   Buildings                         146,063,357 6,7Q7,074     234,514 152 ,535,917
   Equipment                          41,321,692  4,287,560   1,225,533 44,383,719
   Librarymaterials                   41.876,834  1.897,918             43.774.752

         Totalaccumulated
            depreciation             239.885.128 $_13-553J22 $_1+€q042           251.978.203

      assets,net
Gapital                            $_236J56,688                               $_255*009*828




                                             -30-
                                  STATE OF ILLINOIS
                              ILLINOISSTATE UNIVERSITY
                          COMPARATIVE SCHEDULEOF CASH AND
                                  CASH EQUIVALENTS
                                June 30,2005AND 2004


Significantdetails cashand cashequivalents of June30, 2005and2004are presented
                  of                    as                                   belowfor
all fundsof the University:

                                                2005                          2004
                                   Ending           Interest        Ending        Interest
                                   Balance            Rate          Balance         Rate
CASHON HAND- VAULT
  ANDCHANGE  FUNDS             $     233.933          0%        $     198.383       0o/o



BANKMONEY     MARKET
  FUNDS
           City
  National Bank                     7,501,384        2.788%          2,959,435    0.7505o/o
  lllinois
         Funds U.S.Bank
                @                  24,860,226        2.882%         18,992,999     0.948%
  JP Morgan                         1.085.142        2.980o/o           34.870     1.400%

         Totalbankmoney
            marketfunds            33,446.752                       21,987.304


TOTALCASHAND CASH
  EQUIVALENTS                  ffia680s85                       $22.185.687


                                                 sheets June30, 2005and2004as
                    balances presented the balance
Cashand cashequivalent     are       in                at
follows:

Current                        $ 33,680,685                     $22,185,687
Noncurrent


TOTALCASHAND
  GASHEQUIVALENT
  BALANGES                     $33-680*685                      $22.185.687




                                          - 31 -
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                          COMPARATIVESCHEDULEOF INVESTMENTS
                                 June 30,2005AND 2004


                                           2005                           2004
                                 Ending                        Ending
                                 Balance       lnterestRate    Balance       lnterest Rate
U.S.Treasury agency
            and
   obligations:
  Agencynotes                   $44.884.365 1.423- 4.1030/o $55.145.7261.129- 2.800o/o


TOTALINVESTMENTS                $44*884305                    $55J45J26

                                sheets June30, 2005and 2004as follows:
Investments presented the balance
          are       in                at
Current                         $22,878,642                   $ 17,894,069
Noncurrent:
  lnvestments                    22,005,723_                   29,560,736
  Restrictedinvestments                                         7.690.921


TOTALINVESTMENTS                $rt4*884365                   $5'JrcJE




                                           32-
                                   STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                             VARIATIONS CERTAINREVENUE
        ANALYSISOF SIGNIFICANT          IN              AND EXPENSEACCOUNTS
                                 Year EndedJune 30.2005


Amounts shownbelow for general
                  are                purposes.
                             analytical               itemsimpacting University's
                                             Significant           the          financial
position operations alsodiscussed the Management
       and         are           in             Discussion Analysis
                                                          and       section thefinancial
                                                                          of
statements.
                                                   Fiscal Year               lncrease          o/o
                                                                                                 ot
                                               2005           2004          (Decrease)        Change          Notes

        revenues:
Operating
  Student tuition fees,net
                 and                         88,419,957$79,445,827 $            8,974,130       11.30o/o          1
  Federal grants andcontracts                20,797,007 1 8 , 8 5 1 1 9
                                                                 ,4             1,945,588       10.32o/o          2
  Stateand localgrants andcontracts           2,404,703 4,092,027              (1,687,324)     -41.23o/o          3
        expenses:
Operating
  Publicservice                              12,057,416 10,497,927              1,559,489       14.86%            4
  Operation maintenanceplant
            and            of                20,414,726 18,334,823              2,079,903       11.34%            5
  Payments behalf the University
            on       of                      42,893,414 102,777,101           (59,883,687)     -58.27%            o


Nonoperating      (expenses):
           revenues
  Payments behalf the University
           on      of                        42,893,414 102,777,101           (59,883,687) -58.27%                o
  InvestmentIncome                            1,932,457    556,012              1,376,445  247.560/o              7
        appropriations
  Capital                                    11,829,104 14,782,721             (2,953,617) -19.98%                8

Notes
                                                                                         tuitionincreasefor
 1 Studenttuiton and fees increasedby $8,974,130. This increasecan be attributedto a 160/o
   studentsenrolling FY05. Additionally,
                    in                   fees collected healthinsurance
                                                       for                           by
                                                                          increased $612,060.

 2 The Universityreceiveda $1,945,588increasein fundingin Federalgrants and contracts. The majorityof this
   funding increasecomes from a RetrainingAmerica'sWorkplaceGrant.

 3 State and local grants decreasedby $1 ,687,324. In FY04,grantswere receivedfor the Centerfor Adult Learning,
   the NBPTS Project,and the Centerfor AdoptionStudies. However,similarfundingwas not receivedin FY05.

 4 Publicserviceexpenses             by
                           increased $1,559,489.                                  totaling
                                                            was due to expenditures
                                                 The increase                             $1,538,471,
   relatingto the RetrainingAmerica'sWorkplaceGrant.

 5 Operationand maintenance plant expenditures
                           of                 increasedby $2,079,903. Costs associatedwith utilities
   increased $980,042;
            by         capitalproject        by
                                    expenses $573,737;   and equipment             by
                                                                       expenditures $413,174.

 6 Paymentson behalfof the University    decreasedby $59,883,687.The decreasewas due to a decreasein funding
   by the State of lllinoisto State Universities        System.
                                               Retirement

 7 Investmentincome increasedby $1,376,445.The increasecan be attributedto two major contributing  factors.
                                                          52% duringthe year. Interestratesfor FY05 averaged2,Q2o/o
   First,there was an interestrate increaseof approximately
                                                                                                  of
   in comparisonto the averageof 1.33%for FY04. Secondly,there was a gain on FMV of investments $80,338,
   for FY05.where as FY04 statementsreflecteda loss of $434,062.

 I Capitalappropriationsdecreasedby $2,953,617. Paymentsfor the Collegeof BusinessBuildingconstruction
                                                      completedin FY04. Offsetting
   decreasedin FY05 since the buildingwas substantially                           this were increasesfor
   the rehabilitation Schroeder
                    of         Halland for mechanical improvements FelmleyHall.
                                                                   in




                                                       -33-
                            STATEOF ILLINOIS
                       ILLINOIS STATE UNIVERSITY
              ANALYSIS SIGNIFICANT
                      OF             LAPSEPERIODSPENDING
                         Year Ended June 30, 2005




            lapse
No significant        spending noted theyearended
                 period      was   for          June30,2005.




                                    -34-
                            STATE OF ILLINOIS
                         ILLINOISSTATEUNIVERSITY
     ANALYSIS SIGNIFICANT
             OF                    IN
                        VARIATIONS CERTAIN                    AGCOUNTS
                                             ASSETAND LIABILITY
                           YearEndedJune 30,2005

Amounts     below for general
        shown    are                purposes.
                            analytical               items
                                            Significant          the          financial
                                                         impacting University's
position operations alsodiscussed theManagement
       and        are          in              Discussion Analysis
                                                        and       section thefinancial
                                                                        of
statements.


                                             FiscalYear               lncrease        % of
                                          2005        2004           (Decrease)      Ghange      Notes

ASSETS
  Currentassets:
   Cashand cashequivalents             $ 33,680,685 $22,185,687 $ 11,494,998          51.81Yo          1
   Investments                           22,878,642 17,894,069     4,984,573          27.860/o         2
   Appropriationsreceivable
                          from State     12,063,362 4,306,104      7,757,258         180.15%           3
  Noncurrentassets:
   Investments                           22,005,723 29,560,736         (7,555,013) -25.560/o

LIABILITIES
   Currentliabilities:
    Assetsheldin custody others
                        for
     and deposits                         7,820,294    6,417,061        1,403,233     21.87o/o

Notes
 1 Cashand cashequivalents           by
                            increased $11,494,998.  Thisincrease due to a change the mixof investments
                                                                is              in
   and cashheldby the Universityduring                 therewereadditonal
                                      2005. Additionally,                cashbalances to the
                                                                                     due
             commitment set asidefundsfor the University's rangeplanto enhance
   University's          to                               long                    and remodel
   residencehallsand diningcenters.

 2 Short-terminvestments                                                                    and
                         increased $4,984,573.In addition the changein the mix of investments cash
                                 by                      to
   heldby the University,
                        morefundswere available investment a resultof the University's
                                              for           as                        longrangeplan.

 3 Appropriationsreceivable
                          fromthe Stateincreased $7,757,258.
                                               by                                 delaysof about
                                                                        experienced
                                                           The University
   30 daysin Statereimbursements payroll.
                                for

 4 Long-terminvestments                                               in           and
                                         Thisdecrease dueto the change the investment
                     decreased $7,555,013.
                             by                     is
   cashmix.

 5 Assetsheldin custody othersand deposits
                        for                increased $1,403,233.
                                                    by                                  to
                                                                  One factorcontributing the increase
   was an increase roomdeposits $803,140.
                  in              of                                                   in
                                                       therewas an increase $315,817 the fundsheld
                                            Additionally,                  of
   for employeesparticipating the 9112 plan. Lastly, University holding
                            in         pay         the         was        fundsfor the Schroeder
               project the amount $206,132.
   Rehabilitation     in            of        Therewereno coincidingfundsin FY04.




                                                -35-
                                  STATE OF ILLINOIS
                              ILLINOISSTATE UNIVERSITY
                       COMPARATIVESCHEDULEOF RECEIVABLESAND
                           AGED ANALYSIS OF RECEIVABLES
                                 June 30.2005and 2004

                                                                                 lncrease
                                                        2005         2004       (Decrease)
ACCOUNTS  RECEIVABLE
        funds:
  Current
    Local funds(lessallowance doubtful
                                for
                 of             and
       accounts $1,063,656 $1,002,547
       at June30, 2005 and2QQ4,     respectively)    $ 4,446,968 $ 2,742,469 $ 1,704,499
    Auxiliary         system(lessallowance
             facilities
       for doubtful accounts $742,600
                             of
                       at
       and$791,086 June30,2005and
       2004,respectively)                              1,787,787 1,707,835          79,952
    Restricted funds                                   1,789,856 2,508,661        (718,805)
            and
    Payroll clearing      accounts                       76.693     55.721          20.972

             Totalcurrent
                        funds                          8 , 1 0 1 , 3 0 4 7,014,686 1,086,618

   Agencyfunds                                          501,554     1,088,591     (587,037)
   Loanfunds                                             15.419        1,935        13,484


TOTALACCOUNTS
            RECEIVABLE                                                $_8J95A2 $-11-3.065
                                                     $isr!!!!!!!!!!!!!!!!zzz

NOTESRECEIVABLE
  Loanfunds:
    Student                (lessallowance
             loansreceivable            for
        doubtfulloansof $911,774and$900,784                                  'l_00*601-
        at June30, 2005 and2004,respectively)                  $_9.827-512$__
                                                     $1p28._L1_3

           OF      RECEIVABLE
AGEDANALYSIS ACCOUNT
                AGCOUNTS
  ANDUNCOLLECTIBLE

              did
The University not havean aged analysis accounts
                                         of                     however,
                                                      receivable;         accounts receivable
otherthan tuition,roomand board,and fees receivable generally
                                                     are          less than 180 days old and
          to              An         for
considered be collectible. allowance doubtful   accounts $884,693 $832,420 June30,
                                                          of         and          at
2005 and 2004,respectively, beenestablished
                           has                 for tuitionreceivabledeemeduncollectible.  An
allowance doubtful
         for          accounts $521
                             of    ,474 and $568,662  at June 30, 2005 and 2004,respectively,
hasbeenestablished roomand boardreceivable
                     for                      deemed                An
                                                       uncollectible. additionalallowance for
doubtful          of
        accounts $400,089                at
                             and $392,551 June 30,                                 has
                                                       2005 and 2004,respectively, been
          for
established fees receivabledeemed uncollectible.

                                    sheets June30,2005and2004as follows:
Notesreceivable presented the balance
              are       in               at
                                                                     2005          2004

Current                                                           $ 1,722,235 $ 1,848,475
Noncurrent                                                          8.205,878 7.979.037

                                                                  $_9*928J13 w,gn-il2


                                            -36-
THISPAGE           LEFT
        INTENTIONALLY BLANK
                                    STATE OF ILLINOIS
                               ILLINOISSTATE UNIVERSITY
                                ANALYSISOF OPERATIONS
                         AGENCYFUNCTIONS AND PLANNINGPROGRAM


lllinoisStateUniversity foundedin 1857as the first publicinstitution highereducation the
                       was                                           of                 in
State. The documents               lllinois
                        establishing       Stateas a teacher                   were draftedby
                                                                     institution
                                                             education
Abraham   Lincoln.lllinois
                         Stateis a multi-purposeinstitution degreeprograms the bachelor's,
                                                          with                at
master's, doctoral
          and         levels.

The basicpurpose   and function academic
                               of          programming lllinois
                                                       at      StateUniversity statedin the
                                                                               is
 MissionSfafemenfs portion the University's
                          of              Academic Plan,which updated submitted
                                                             is        and            annually
to the lllinoisBoard of Higher Education. The Mission Statemenfsinclude: (1) the lllinoisState
University Boardof TrusteesVisionStatement the Year2007,(2) UniversityMissionStatement,
                                           for                                            and
(3) CollegeMission Statements.

TheAcademic    Plansubmitted duringour auditperiodis for fiscalyears2005-2010 can be foundat
                                                                            and
                                     plan/academicplan200S
http:/iranrtrw.provost.ilstu.edu/academic                    201O.pdf. lt includes: (1) an
              of                    (2)
                          priorities; the University's
identification institutional                           strategicplan,Educating(llinois:An Action
Planfor Distinctiveness Excellence lllinois
                       and            at      StateUniversity  2003-2010; (3) specific
                                                                        and            curricular
          set                         for
initiatives forthby thoseresponsible academic    planning         the
                                                            within University.

The AcademicPlan also includes
                             academic               objectives fiscalyear 2005and program
                                       unit (college)        for
reviews the departments the University
      for                in            beingreviewed the mostrecentreviewcycle. Program
                                                      in
reviewscontainrecommendations enhancing programs
                               for           the          beingexamined well as plansfor
                                                                         as
         progress
monitoring       toward fulfillment theserecommendations.
                        the         of                        Duringfiscalyear2005,program
reviewswerecompleted the following
                     on              programs:  Agribusiness,          Family
                                                            Agriculture,      and Consumer
Sciences,IndustrialTechnology,  Technology,   TechnologyEducation,Philosophy,   Psychology,
Accountancy,BusinessAdministration,Finance, lnsurance,           Business,
                                                      International        Management,and
Marketing.

Compilation the University's
            of                AcademicPlan is coordinated   throughthe Office of the Associate
Provost, whose functionsalso ensure cohesionbetweenthe AcademicPlan and the University's
strategicplan: Educatinglllinois:An ActionPlan for Distinctiveness Excellence lllinoisState
                                                                 and            at
University2003-2010.
.   Educatinglllinoisis the University'smulti-yearstrategicplan. lt has articulated core values
                                                                                  five
    (individualized
                  attention,public
                                 opportunity, activepursuit learning scholarship,
                                                          of          and                    and
                                                                                     diversity,
    innovation)that support7   goals and 16 corresponding   action items addressed by the campus
    community.University    progress summafized the Institutional
                                     is             on                 ReportCard sectionof the
    Educating       Website,
             lllinois         www.illinoisstate.edu/educatinqillinois.

                         documents processes
                  planning
Otheruniversity-wide             and             the
                                           include following:
.   ResourceAllocation and ManagementProgram (RAMP) for Operationsand Grants Resource
    Requiremenfs a five-yearplan that includesa comparison the preceding
                 is                                       to             two fiscal years.
    Amongthe data included a summary operations
                           are            of         costsby functionand sourceof funds,
    summary staffrequirements earnings,
            of                 and                 enrollments, tuition
                                           projected          and      andfees. Detailed
              by
    information variousdepartments programs included.
                                  and          is




                                             -37 -
                                  STATE OF ILLINOIS
                              ILLINOISSTATE UNIVERSITY
                               ANALYSISOF OPERATIONS
                        AGENCYFUNCTIONS AND PLANNINGPROGRAM


o Resource                                                       Plan is also a five-
                                  Program(RAMP)CapitalRequirements
           Allocationand Management
  yearplanning program includes summary capital
                       that     a        of     requirements budget
                                                          by       category.  These
  requirements detailed to building components buildings wellas othercapital
              are        as        or        of        as                   projects
  planned the University.
         for
.   TheMasterPlan: AchievingDistincfiyeness Excellence Form,Functionand Designat lllinois
                                          and            in
    Sfafe University2000-2020defines the future physical developmentof facilities,grounds,
    technology, infrastructure.
                and                                                            in
                                This plan is the basisfor those recommendations Resource
    Allocationand ManagementProgram(RAMP)CapitalRequirements     Plan.
.   Additionally, Facilities
                the        Condition
                                   Assessment        quantitative
                                              provides                    on
                                                                information the condition
    of physical
              structures current
                       and       and projected         needs. Results
                                             maintenance              fromthisare usedto
          the
    inform Master   PlanandCapitalRAMP.
        Assessment Planninq
Auditor's       of        Proqram

The University'splanning
                       program      adequate boththe financial nonfinancial
                              appears      for               and               of
                                                                         aspects
its operations.



       of
Location Agency:Normal, lllinois
AgencyHead: Dr.C. AlvinBowman,   President




                                             -38-
THISPAGEINTENTIONALLY BLANK
                   LEFT
                                 STATE OF ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                    EMPLOYMENT  STATISTIGS (FULL-TIME  EQUIVALENT)
                          Years Ended June 30. 2005 and 2004

                                      (Unaudited)*


                                                   lnstructional   Organized   Public
                                                     Activities    Research    Service
YE A REN D E D N E3 0 ,2 OO5
              JU
   Appropriated funds:
      Facu       m
           lty/ad inistrative                        1,097.70        26.90      38.70
      Civilservice                                    206.00          3.30       8.30
      Student  employees                               85.00          1.30        .50
      Miscellaneous  contracts                         31.30         18.20        .50
                                                     1.420.00        49.70      48.00

   Nonappropriatedfunds:
     Faculty/adinistrative
               m                                        61.90       141.80      58.50
     Civilservice                                       20.30        33.20      14.50
     Student employees                                  21.00        20.60      10.50
                                                       103.20       195.60      83.50


TOTALALL FUNDS                                       1.523.20       24539      l3t50


YEARENDED   JUNE30,2OO4
  Appropriatedfunds:
    Facu lty/ad nistrative
               mi                                    1,077.60        31.10      43.20
    Civilservice                                      209.50          4.10       7.30
    Student  employees                                 85.00          1.90        .50
    Miscellaneous contracts                            30.40         17.80        .50
                                                     1.402.50        54.90      51.50

   Nonappropriatedfunds:
     Facu lty/ad nistrative
               mi                                       92.40              0
                                                                    15 3 . 1    57.50
     Civilservice                                       24.40        43.10      18.00
     Student  employees                                 20.00        17.70       9.90
                                                       136.80       213.90      85.40


TOTALALL FUNDS                                       l*539-30       208-80     l_30-90

* Provided the Office Budget Planning.
         by          of    and

Thisis theemploymentinformation                            Board Higher
                               reported the Stateof lllinois
                                      to                        of       Education.,Staff
yearsare compuied dividing employee's
                 by         an           number  of months employment
                                                             of          duri1g fiscal
                                                                               the
year by 12 and multiplying numberby a factorof one for full-time
                         th-at                                     and multiplying the
                                                                                 by
percentage appointment
           of          for                                            is
                           parttime.Oneexample staffyearcomputation as follows:
                                               of

   Onefull-time
              employee                       yearcounts onestaffyear.
                     employed months thefiscal
                            12     of                 as




                                          - 3 9-
                                          Operationand
Academic    Student       Institutional   Maintenance     Independent TotalAll
 Support    Services        Support       PhvsicalPlant    Operations Functions


  35.90       47.30          66.80             5.00                    1,318.30
  85.20       28.90         118.90           159.50                     610.10
  15.10        7.40          20.10             6.70                          0
                                                                         136.1
   2.90        4 .7 0        12.90            70.70                      141.20
 139.10       88.30         218.70           241.90                    2.205.70


   1.10      107.70            5 .4 0          1.40          34.90      412.70
              67.60           29.40          174.20         176.40      515.60
   5.90       53.80            1.90           19.70         242.90      376.30
   7^00      229.10           36.70          195.30         454.20     1.304.6 0


 146.10     31t-49           255.40          437.20         454,20     3*5lO=30




  37.50       48.40           58.30            5.20                    1,301.30
  92.40       29.40          1 1 7 .5 0      165.20                      625.40
  18.40        8.40           18.80            7.60                      140.60
   2.80        4 .6 0         1 2 .5 0        68.70                      137.30
 1 5 11 0
     .        90.80          207.10          246.70                    2.204.60


    .20      1 0 2 .6 0        5.20            1.40          37.60      450.00
              70.50           27.70          173.20         190.70      547.60
   7.20       48.80            3.10           18.00         249.90      374.60
   7.40      2 2 1 .9 0       36.00          192.60         478.20     1.372.2 4


 158-50      312J0           243,19          439-30         478.20     3.576.80
                                   STATE OF ILLINOIS
                              ILLINOISSTATE UNIVERSITY
                               ANNUAL COST STATISTICS
                                 June 30, 2005 and 2004

                                     (Unaudited)


Following a computation costperfull-time
        is            of               equivalent
                                               student:
                                                            2005           2004
Totaleducation general
             and                         from
                       expenses/expenditures
   current
         appropriated
                    funds                               $ 80,694,214" $ 79,207,515*
Expenses/expenditures locally
                   from     heldUniversity
   lncomeFund                                             67,553.072    63.925.743
                                                "        148,247,286    143,133,258

Fulltimeequivalent
                students                            +        18,465 +       18.570


COSTPERFULL.TIME
               EQUIVALENT
  STUDENT                                               $______8J29 $______1J08

*   Amountrepresents
                   totalGeneral          lessthe amount payments behalf the
                              Fundexpenses            for     on      of
    University.
Note - the 2004 IncomeFund expenditures  have been reclassified conform
                                                              to       with the 2005
presentation. Note21 to thefinancial
            See                    statements.




                                        -41
                                     STATE OF ILLINOIS
                                 ILLINOISSTATE UNIVERSITY
                                  EMERGENCY   PURCHASES
                         For the Years Ended June 30, 2005 and 2004


In FiscalYear2005,the University an emergency
                               had             purchase cattle research the University
                                                        of       for       at
farm in the amountof $61,425. In FiscalYear 2004,the University  had an $53,290emergency
purchase the temporary
         for                 of            for                                       of
                                                                systems the newCollege
                        rental waterchillers the air conditioning      of
Business Building other
                and             buildings.
                         existing




                                            A1
                                      STATE OF ILLINOIS
                                ILLINOISSTATE UNIVERSITY
                          SERVICEEFFORTS    AND ACCOMPLISHMENTS
                               For the Year Ended June 30, 2005

                                          (Unaudited)


Agency: lllinois            (636)
               StateUniversity                 MajorFunction:     HigherEducation
Fund(s): General Revenue(001)

    Indicators:
Input

TotalAppropriation Income
                and     FundBudget
   as Approved IBHE
             by                                                           $147.037.000
      FTE- Fall2004
Faculty                                                                          925.2
        FTE- Fall2004
LabSchool                                                                        105.8
Admin/Professional - Fall20Q4
               FTE                                                               592.1
           FTE- Fall2004
CivilService                                                                   1.350. 5
Fall2004Enrollment                                                              20,419
Undergraduate
           Direct
                Instruction
                          Costs                                          $ 32.548.258-
       Direct
Graduate    lnstruction
                      Costs                                              $ 5.152,300.
                                                                           *FY05Data

OutputIndicators:
     goalsandobjectives)
(Major

1. Higher  education helplllinois
                      will                    and
                                     business industry     sustain
                                                                 strong economic growth.
2. Higher  education  willjoinelementary secondary
                                          and            education improve
                                                                  to                and
                                                                           teaching learning   at
   all levels.
3. No lllinois        will
              citizen be denied opportunity a college
                                    an           for          education        of
                                                                       because financial need.
4. lllinoiswill increasethe numberand diversity citizenscompleting
                                                      of                    trainingand education
   programs.
5. lllinoiscolleges and universities be accountable providing
                                     will                for         highqualityacademic programs
   and systematic    assessment student
                                 of         learning outcomes  whileholding         to
                                                                           students even higher
   expectations learning growth.
                 for         and
6. lllinoiscollegesand universities continually
                                       will            improveproductivity,                  and
                                                                            cost-effectiveness,
   accountability.
7. Degrees  awarded                                                                  5,054
8. Undergraduate hours
                   credit                                                          499,088
9. Graduate  credit hours                                                           41.892




                                             -43-
                                       STATE OF ILLINOIS
                                 ILLINOISSTATE UNIVERSITY
                           SERVICEEFFORTS    AND ACCOMPLISHMENTS
                                For the Year Ended June 30, 2005

                                            (Unaudited)

Outcome Indicators:

lllinois                FiscalYear 2005Performance
        StateUniversity's                            Report FiscalYear2005Educating
                                                             and                          lllinois
SfafusReport   summarize              contributions the six
                          institutional           to         policypriorities      in The lllinois
                                                                            outlined
Commitmenf,   whichwas endorsed the lllinois
                                   by          Boardof Higher   Education 2004.All lllinois
                                                                          in               State
University actions are derivedfrom the lllinois State lJniversityMissionStatemenfand priorities
identified the University's
          in                 strategicplan,Educatinglllinois: ActionPlan for Distinctiveness
                                                            An                                and
Excellence   2003-2010.The followingactionsare among lllinoisState University's   contributionsto
successful                of
           implementation lllinois Commitmenf  policypriorities
                                                              duringFiscal Year2005.

PolicyArea1: Higher          will
                  education helplllinois      strongeconomic
                                        sustain            growththrough teaching,
                                                                        its
       and
seryice, researchactivities.

Ninety-three percent undergraduate
                     of                              recipients eitheremployed enrolled
                                     degree/certificate       are                or         in
furthereducation withinoneyearof graduation; Statistical
                                            the          ConsultingCenter opened in fall2004to
support  interdisciplinary          amongUniversity
                        collaboration               researcheffortsand to provide mechanism
                                                                                a
                             expertise,
for facultyto sharestatistical        software,and reference         and the value of external
                                                            materials;
awards  increased.

Policy Area 2: Higher education willjoin elementaryand secondary education to improve teaching and
learning at all levels.

The University amongthe top producers teachers the nation; $903,000
                is                           of          in             a           NationalScience
Foundation  grantto enhance   technology engineering
                                         and             education universities elementary
                                                                   in            and            and
secondary  schools;  one of five national centersestablished the National
                                                              by              Boardfor Professional
Teaching  Standards            -
                     (NBPTS) 412lllinois    teachersassisted          the
                                                              through Center;     $1.7millionfederal
grantto deliver alternative
                an            routefor elementary certification bilingual
                                                             of                           partnered
                                                                          paraprofessionals;
with StateFarm,Chicago    Public Schools, the LocalInitiative
                                           and                    Support             to
                                                                           Corporation establish  in
the LittleVillage areaof Chicago new national
                                  a              modelfor university-school-community  partnerships;
and a Kellogg  Foundation grantto workwiththe Wheeling     community increase capacity the
                                                                       to         the         of
           to
community constructively    address educational issues developing
                                                       by            networks diverse
                                                                              of        leadersfrom
educational            and
            institutions the localcommunity.

Policy Area 3: No lllinois resident will be denied an opportunity for a college education because of
financialneed.

Adopted   policies guidepricesetting,
                  to                    revenue  generation,affordability, use of fundsdecision-
                                                                         and
making,  including that directs University devote portion newtuition
                   one            the           to       a        of           and fee revenue  to
assistuniversity students who are eligible maximum
                                          for           MonetaryAwardProgram    (MAP)grants  from
the lllinoisStudent AssistanceCommission, whosegrantsfall shortof the University's
                                            but                                        tuitionand
fee charges; allocated           - up from$250,000 Fiscal
                       $1.0million                   in                -
                                                              Year2004 to supplement grants
                                                                                      MAP
              needystudents; the University
for financially               and                 remained U.S.Newsand WorldRepoft's 15
                                                           in                              top
percent colleges universities
         of          and                                 to
                                    nationally regards undergraduate
                                              with                                graduating
                                                                           students           with
the leastamount debt.
                 of




                                                -44-
                                         STATE OF ILLINOIS
                                   ILLINOISSTATE UNIVERSITY
                             SERVICEEFFORTS    AND ACCOMPLISHMENTS
                                  For the Year Ended June 30. 2005

                                               (Unaudited)

Policy Area 4: lllinois will increase the number and diversity of residents completing training and
education programs.

The total numberof minoritystudents increased                                            -
                                             from 2,085in fall 2002to 2,209in fall 20Q4 an
increase 5.9 percent;
         of           minoritystudentscomprised  11.1percent totalundergraduate
                                                           of                    enrollment in
fall2004(upfrom10.1percent fall 2002)
                            in         and8.9 percent graduate
                                                      of         enrollment fall2004(upfrom
                                                                          in
                                         -
8.7 percentin fall 2002);a new program the Minority   Academic   ScholarAchievement   Initiative
(MASAI)  - of peermentoring first-year
                          for                piloted; percent first-time
                                      students       59        of                  in
                                                                         freshmen fall 1997
completed undergraduate
           an              degreein six yearsor less,compared 56 percent thosewho were
                                                              to           of
first-time
         freshmen fall 1995;and the overall
                  in                       retention increased
                                                    rate                 for
                                                                  annually the fall 2001,fall
2002,andfall 2003cohorts.
Policy Area 5: lllinois colleges and universities will be accountable for providing high quality academic
programs and systematic assessment of student learning outcomes while holding students to even
higher expectationsfor learning and growth.

Student performanceexceeded        pass-rates licensure
                            national         on                       in     g
                                                          examinations nursin in 2002,2003,
and 2004; studentsexceeded met nationalbenchmarks severalother fields of study with
                             or                           in
professional/occupational
                       licensure examinations (e.9., Therapeutic Recreation,AthleticTraining,
ClinicalLaboratory
                 Sciences,          child development,
                           Dietetics,                   speechpathology  and audiology);the
meanACT score(23.9)in fall 2004 exceeded   stateof lllinois           core curriculum
                                                           and national              (college
bound)students 1.5pointsand2.0 points,
              by                       respectively.
Policy Area 6: lllinois colleges and universities will continually improve productivity, cost-effectiveness,
and accountability.

The proportion first-time,
               of         fulltime degree-seeking  freshmen who complete  theirdegreewithin150
percent catalog
        of        time exceeded average lllinois
                                  the          of      publicuniversities the 1996cohort;
                                                                        for                cost
savingsand internalreallocations                                                        to
                                    totaled$12.8 million;over $12 millionwere allocated the
University'smaintenance  prioritiesidentifiedin The Master Plan, Energy Management   and UtilW
lnfrastructurelmprovementPlan, FacilitiesConditionAssessment,and the Long Range Plan for
Campus   Housing and Diningexceeding   amounts  expendedduringthe previous years;and the ratio
                                                                          two
of undergraduate credithoursper staffyearincreased annuallybetween Fiscal           and
                                                                         Years20Q2 2004.
                                          STATE OF ILLINOIS
                                    ILLINOISSTATE UNIVERSITY
                              SERVICEEFFORTS    AND ACCOMPLISHMENTS
                                   For the Year Ended June 30, 2005

                                           (Unaudited)

Efficiency Cost Effective Indicators:

           Direct
Undergraduate    Instruction       Hour
                           CosUCredit                                        $65.22
       Direct
Graduate    Instruction        Hour
                      CosUCredit                                            $122 .99
                                                                               FY05Data

.             percentof the new freshmenreturnto lllinoisState University a secondyear of
    Eighty-five                                                         for
    enrollment.

o   Sixtythreepercentof the new freshmengraduate                  withinsix years. Of these
                                                from the University
    graduates percent
              54         graduate four years,38 percent
                                  in                    graduate five yearsand 8 percent
                                                                in
    graduate sixyears.
            in

         lnformation
Explanatory       :

In Fall 20Q4, University
              the        enrolledstudentsfrom 48 statesand 79 countries. Fifty-twopercentof
University students fromthe Chicago
                  are                area and23 percent fromcentral
                                                       are                    The
                                                                      lllinois. enrollment
         a
includes significantnumber minority
                          of                students disabilities, adultlearners.
                                    students,       with         and                Among
the entering students, meanACTscorewas23.9with81 percent the top halfof theirhighschool
                     the                                    in
graduating class.




                                              -46-
                                 STATE OF ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                SCHEDULEOF FEDERALAND NONFEDERAL         EXPENDITURES
                        For the Two Years Ended June 30, 2005


                                    FiscalYear2005            Fiscaf Year 2004
                                   Amount    Percent        Amount      Percent

      expenditures
Federal                          $ 22,685,689     7.2o/o $ 22,262,074       6.10/o
Nonfederal
        expenditures              293.574.188    92.8     343.535.524      93.9


TOTAL                            $31€259*8ZZ _100-0% $365-292598 _1000%

Sources:                   of                        of        Expenses,
                                   Awardsand Statement Revenues,
       Schedule Expenditures Federal
               of                                                      and
              in
       Changes NetAssets.

Note:   Federal
              expenditures shown
                        are                                expenditures:
                                                     noncash
                                herenetof thefollowing
                                                           2005         2004

NursingStudent
             Loans                                    $     310,553 $ 301,230
PerkinsLoanProgram                                        10,485,686 10,377,935
DirectLoanProgram                                         58,385,787 55.686.070

                                                      $69J-82*020 $_00J05235

Note- 2004 amounts                to
                  havebeenadjusted conformwith the 2005 presentation. Note21 to the
                                                                   See
       Statements.
Financial




                                       - 4 7-
                                 STATE OF ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                                                   BY
                     SUMMARYOF AGENCYOPERATIONS FUNCTION
                               OF PROGRAMACTIVITY
                          STUDENTENROLLMENT    STATISTICS
                         YEARSENDEDJUNE 30,2OO5   AND 2OO4

                                     (Unaudited)


        statistics the pasttwoacademic
Enrollment       for                 yearsareas follows:

                                                   Numberof EnrolledStudents
                                                   at Beginninq SchoolYear
                                                               of
                                                      20q4-2005 2003-2004
            including
All students,       extension                              20J57   20*800

                                                   Full-timeStudentsEquivalent
                                                      2004-2005 2003-2004
            including
All students,       extension                          l€*465      13-570
                                       OF
                                 STATE ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                        UNDERGRADUATE TUITION ANDFEEWAIVERS
                                  Fiscal Year2005

                                        (Unaudited)


                                                                              Fees Waived
                                    Total
                                  Numberof Numberof Value                     Valueof
                                  Recipients* ReciPients* Waivers Recipients* Waivers
MandatoryWaivers

TeacherSpecial  Education            281             281    $ 1, 1 6 0 . 0   ,u_,    $ 392.0
GeneralAssembly                      161             161        678.5
ReserveOfficer's TrainingCorps        56              56        188.3
               Department
Wardsof lllinois          of
  Children Family
            and        Services       13              13          23.8        13
       of
Children Employees                   306             306         545.1                    _4.3

    (subtotal)                        817            817       2.595.7       294         396.3

            Waivers
Discretionary

Facu      mi         (Non-Civi
     lty/Ad nistrators      I
   Service)                             7              7          5.5          6          1.6
CivilService                           67             67         66.7         61         20.2
Children Deceased
         of          Employees          6              6         13.7          6          3.6
Athletic                              289            289       1,011.5
Academic/Other Talent                 433            433       1,021.9        22            1.9
Foreign  Exchange Students             34             34         86.3
Outof-state Students                   10             10         33.9          7            6.3
Research  Assistance                    2              2          1.7
Retired University
                 Employees              3              3          3.7          3            1.0

    (subtotal)                       851             851       2.244.9       105     ;

Total                               1 .668          1.668   $_4*8.10-6       _3e9    $ 430.9

"   Unduplicated.
               Totalsmaybe lessthanthe sumof the detail.




                                             -49-
                                  STATE OF ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                          GRADUATETUITIONAND FEE WAIVERS
                                   Fiscal Year 2005

                                      (Unaudited)


                                               TuitionWaived
                                  Total
                                Number  of Number                                 of
                                                                             Number    Value
                                Recipients* Recipients* Waivers          Recipients* Waivers
MandatoryWaivers

      Special
Teacher     Education                16             16    $      48.3           16     $ 17.1
GeneralAssembly                       3              3

    (subtotal)                       19             19           52.7           16       17.1

            Waivers
Discretionary
                    (Non-Civi
Faculty/Administrators     I
   Service)                        133            133           127.3          116       38.0
CivilService                        52             52             51.1                   14.4
Cooperating Professionals          493            493           362.9
Athletic                             I              I             16.7
AcademiciOther Talent              625            625           469.6          109       13.4
Foreign Exchange Students           33             33           100.6
Graduate          -
         Assistants Research       223            223           548.5
Graduate          -
         AssistantsTeaching        490            490         1, 3 1 8 . 9      -
Graduate          -
         AssistantsOther           308            308           854.3
RetiredUniversity
                Employees            1              1              0.4

    (subtotal)                    2.366          2.366        3.850.3          272       65.8

Total                            2*3E5       2385         $ 3.903.0           _nE      $ 82.9


.   Unduplicated.
               Totalsmaybe lessthanthe sumof thedetail.




                                          -50-
                               STATE OF ILLINOIS
                           ILLINOISSTATE UNIVERSITY
                          lOTH DAY ROOM UTILIZATION
                             Year Ended June 30, 2005

                                  (Unaudited)


                                  FALL 2OO4

                                   DAYTIME
                                                            Stations     Rooms

110Space(classroom)                                            593%      77.0o/o
210Space(lab)                                                  29.1o/o   38.3%

                                  EVENINGS

                                                            Stations     Rooms

110Space(classroom)                                            19/%      40.0o/o
210Space(lab)                                                  16,2%     27.7o/o


                                       2OO5
                                  SPRING

                                   DAYTIME
                                                            Stations     Rooms

110Space(classroom)                                            48.60/o   62.9o/o
210Space(lab)                                                  27.1o/o   36.8%

                                  EVENINGS
                                                            Stations     Rooms

110Space(classroom)                                            16.0o/o   33.1%
210Space(lab)                                                  14.1o/o   26.8o/o


Source:Office Facilities
             of        Planning
                                                                      semesters.
                presented as of the 10tnday of classesof the respective
Space utilization          is
          is computedby dividingthe workspace
Utilization                                  (desk, lab space) hours used by the
workspace hours available.




                                     -51-
                                STATE OF ILLINOIS
                           ILLINOISSTATE UNIVERSITY
               DEBT FINANCEDBY UNIVERSITY    RELATEDORGANIZATION
                         For the Year Ended June 30, 2005


Long-term at the lllinois
        debt                                                  of
                                     Foundation June30 consists thefollowing:
                        StateUniversity       at

Notepayable Chase,
            to        requiring     interest
                              monthly
payments 1.25percent
         of             underChaseprime,withthe
principal in fullin April2007.
       due                                                         $   300,000

          installments
Lesscurrent

Long-termdebt,less currentinstallments                             $ 300.000

     maturities longterm
Future        of        debtareas follows:
2007                                                               $__100*000




                                         52-
                               STATE OF ILLINOIS
                          ILLINOISSTATE UNIVERSITY
                 ACQUISITION REAL ESTATEBY UNIVERSITY
                            OF                            NOT
                  FUNDEDBY SEPARATESPEGIFIC      APPROPRIATION
                        Year Ended June 30. 2005 and 2004


ln FiscalYears2005 and 2004,the University not acquire
                                           did        real estatewhichwas funded
outside a separate
       of                 appropriation. Fiscal
                   specific             In     Year2005,the University exchange
                                                                     did
realestatewiththetownof Normal,
                              lllinois.
THISPAGEINTENTIONALLY BLANK
                   LEFT
STATEOF ILLINOIS
ILLINOISSTATEUNIVERSITY
STATEMENT NETASSETS. LOCAL FUNDS
             OF
As of June 30, 2005




                                                                                                                Student
                                                 Indirect             Gontinuing          Sales& Service       Programs
                                                  Cost               Education &          Of Educational      & Services -
                                                 Support             PublicService           Activities        University
ASSETS
CurrentAssets:
  Cashand cashequivalents                         1, 3 1 3 , 6 3 6       2,343,880              1,050,341 $       3,748,3_77
  Accruedinterestreceivable
  Accounts receivable.
                     net                                                   77,471                  9,538           957,083
               receivable
  Appropriations         from State
  lnventories                                                               oo,iuu                ,r,iru           110,952
  Prepaidexpenses  and deposits                           328              91,020                  5,200            19,759
  Defenedchargesand obligations

   Total cunent assets                            1, 3 1 3 , 9 6 4       2,556,859              1,088,304        4,836,171


NoncurrentAssets:
  lnvestments
        assets,net
  Capital

   Totalnoncurrent
                 assets

       Totalassets                                1, 3 1 3 , 9 6 4       2,556,859              1,088,304         4,836,17' 1


LIABILITIES
CunentLiabilities:
   Accounts payableand accruedliabilities           'uo't_t'               250,4_65              134,9i24          284,3_84
             payable
   Obligations
             undercapitalleases
   Obligations
   Assetsheldin custody othersand deposits
                       for                                                  3,250                                   74,503
   Deferredrevenue                                                         500,636                  380            275,676
   Accruedcompensated  absences                        6.467                17,062                 1,634           107,775

    Totalcunentliabilities                          237,004                771,413               136,938           742,338

NoncurrentLiabilities:
  Accruedcompensated   absences                       51,684               136,371                13,058           861,406
                          leases
  Obligationsunder capitial

    Totalnoncurrent
                  liabilities                         51,684               136,371                13,058           861,406

     Totalliabilities                               288,688                907,784
                                                                                                 '149,996         1,603,744

NETASSETS
        in
Invested capitalassets,net of relateddebt
Unrestricted                                      't,025,276             1,649,075               938,308          3,232,427

     Total net assets                        $    1,02s,276t----t**t-                 $          938,308 $        3,232,427




                                                              -54-
      Student
     Programs    FieldTrip &                                                Local
    & Services- ForeignStudy           Income                Payroll        Funds
    HighSchool    Activities            Fund                  Fund          Total

       "o':uu $          8
                     588,11      $       488,265               95,736 $       9,743,102
                                           17,500                                17,500
                      20,291            3,412,585              76,693         4,553,661
                                       11,379,608                            11,379,608
                          :                                                     178,665
        10,000                             123,O47                             250,138
                                            73,649                               73,649

       124,686       609,256           15,494,654             172,429       26,196,323



                                        2,975,640                             2,975,640
                                      165,382,608                           165,382,608

                                      168,358,248                           168,358,248

       124,686       609,256          183,852,902             172,429       194,554,57' 1




        14,3_26                          1,589,593            172,4_29       2,698,153
                                           73,649                               73,649
                                          225,403                              225,403
                                                                                77,753
          :          526,480             't,368,237                          2,671,409
          160             61             1,423,097                           1,556,256

                                         4,679,979            172,429        7,302,623


         1,276                         12,672,528                            13,736,813
                         1no             549,904                               549,904
         't,276                        13,222,432                            't4,286,717

        15,762       548,526           17,902,411             172,429       21,589,340


                                      164,607,301                           164,607,301
       ,ou,iro        uo,i.o            1,343,190                             8,357,930

$      108,924$       6 0 , 7 3 0 $ 1 6 5 , 9 5 0 , 4 9 1$              $   172,565,231
STATEOF ILLINOIS
ILLINOISSTATEUNIVERSITY
STATEMENT REVENUES,
           OF                   AND CHANGESIN NETASSETS. LOCAL FUNDS
                        EXPENSES,
Year EndedJune 30, 2005




                                                                                                  Student
                                                 lndirect       Gontinuing Sales& Service        Programs
                                                   Gost        Education &   Of Educational     & Services-
                                                 Support       PublicService   Activities        University
 OPERATING    REVENUES
  Studenttuitionand fees.net                                          13,163 $         -    $      15,377,649
  Salesand services educational
                    of        activities                               8,212      1,964,705
  Otheroperating revenues                         ',,rru,ion       7,398,978                        7 ,651,412

     Totaloperating
                  revenues                        1,736,509        7,420,353      1,964,705        23r--
 OPERATING      EXPENSES
             and
 Educational General
  Instruction                                                        513,697      1,234,787          347,936
  Research                                         409,668            52,977        170,464
  Publicservice                                                    4,003,897       301,075                 174
  Academicsupport                                   ur,uro            46,715       206,945
  Student  services                                                  223,920         25,272        ,r,o,riou
  Institutionalsupport                              153,147          281,457
  Operation  and maintenance plant
                            of                    1,074,977          144,961        23,834           250,416
  Deoreciation
  Staff benefits                                    58,716           83,303         ',o,iu,          ,,uu,u45
  Student  aid                                       4 4q,n           9,433          3,025          1,892,598
 Otheroperating  expenditures                                      1,710,552         2,968

    Totaloperating
                 expenses                         1,787,352        7,070,912      1,979,109        24,061,975

             income(loss)
     Operating                                     (50,843)         349,441         (14,4041       (1,032,9141

NONOPERATING    REVENUES     (EXPENSES)
                                  -
 Payments behalfof the University Foundation
           on
 LaboratorySchools
 Giftsand donations                                                   t,lu,                            u,unu
 Investment income,net of investmentexpenses        or,i-on          4a laa          ,,ioo           104,222
 Interest
        expense
 Othernonoperating revenues                                          uu,rn,          5,539           414.236

                 revenues
  Net nonoperating                                  43,449           86,715          7,983           525,356

      Income(Loss)beforecapitalitems                (7,394)         436,156         (6,421)          (507,558)

 Capitalappropriations
 Capitalgrants and gifts

  Totalcaoitalitems

           (decrease) net assets
    Increase        in                              (7,3e4)         436,156         (6,421)          (507,558)

NET ASSETS
Net assets - beginning of year                    1,032,670        1.212,919       944,729          3,739,985

Net assets - end of year                       $____Lq?9?29_
                                                         $         1,649,075 $     938,308 $        3,232,427




                                                            -56-
      Student
     Programs         FieldTrip &                       Local
    & Services -     ForeignStudy     lncome            Funds
    HighSchool         Activities      Fund             Total

                          908,656 $    72,' t20,489 $    88,419,957
                                                          1,972,917
        159,314           352,931         93.127         17,392,271

        159,314          1,261,587    72,213,616        ' t07,785,145




                                       41,997,423       45,336,055
        uru,iu,                           387,970        1,647,466
                                          187,017        4,492,163
                                         (673,990)        (330,636)
                                          333,716       21,995,'t14
                                        7,784,026        8,218,630
                              :         8,180,212        9,674,400
                                        8,481,683        8,481,683
          ,,otu            (12,355)       111,462          413,588
            105              6,125      5,363,909        7,276,345
                                                         1,713,520

        629,570          1,235,982    72,153,428        108.918.328

        (47O,256')         25,60s         60,188         ( 1, 13 3 , 1 3 )
                                                                     8


                                         882,152            882,152
        461,890                                             461,890
                                         761,758            771,843
          ,,i_,,u                        300,996            470,865
                                           (8,0ee)             (8,0ee)
                                          83,084            569,251

        464,508                        2,019,891          3.147.902

          (5,748)          25,605      2,080,079          2,014,7' tg

                                       11,829,104        11,829,104
                                        6,171,149         6,171,149

                                      18,000,253         18,000,253

          (5,748)          25,605     20,080,332        20,014,972


        114,672            35,125     145,870,159       152,950,259

$       108,924 $          60.730 $   165,950,491 $     172,965,231
STATE ILLINOIS
       OF
ILLINOIS STATE  UNIVERSITY
                         .
STATEMENT NETASSETS SERVICE
            OF             DEPARTMENTS
As of June 30,2005


                                                        Service
                                                      Departments
  ASSETS
        Assets:
  Current
    Cashandcashequivalents                        $      3,879,545
    Accounts         net
            receivable.                                    265,265
    lnventories                                          1,686,550
          expenses deposits
    Prepaid        and                                     164,828

                assets
     Totalcurrent                                        5,996,188


           Assets:
  Noncurrent
    Capital     net
          assets,                                        3.704,461

                  assets
     Totalnoncurrent                                     3.704,461

         Totalassets                                     9,700,649


  LIABILITIES
  CurrentLiabilities:
    Accountspayableand accruedliabilities                 764,880
    Obligations undercapitalleases                          2,202
     Deferredrevenue                                      176,986
    Accruedcompensatedabsences                            111,634

      Totalcurrentliabilities                            1,055,702

  Noncurrent         :
           Liabilities
    Accruedcompensatedabsences                           1,286,836

                    liabilities
      Totalnoncurrent                                    1,286,836

       Totalliabilities                                  2,342,538

  NET ASSETS
  Investedin capitalassets,net of relateddebt            3,702,259
  Unrestricted                                           3,655,852

       Total net assets                           $      7,358,111




                                                58-
      OF
STATE ILLINOIS
ILLINOIS
       STATE UNIVERSITY
STATEMENT REVENUES,
          OF                         IN        .
                     EXPENSES, CHANGES NETASSETS
                            AND
 SERVICEDEPARTMENTS
YearEndedJune30,2005

                                                        Service
                                                      Departments
   OPERATING   REVENUES
    Other operatingrevenues                       $     16,954,241

       Total operatingrevenues                          16,954,241

   OPERATING     EXPENSES
               and
   Educational General
    Instruction                                           403,955
    Institutional
                support                                 10,100,355
    Operation and maintenance plant
                            of                           5,765,419
    Depreciation                                         1,474,851
    Staff benefits                                           (684)

      Total operatingexpenses                           17,743,896

               (loss)
       Operating                                          (789,655)

  NONOPERATTNG    REVENUES     (EXPENSES)
   Investment income,net of investment
                                     expenses             331,062
   Interestexpense                                          (636)
   Othernonoperatingrevenues                               2,629

    Net nonoperating
                   revenues                               333,055

      Decreasein net assets                               (456,600)

  NET ASSETS
  Net assets - beginning of year                         7,814,711

  Net assets - end of year                               7,358,111




                                           -59-
STATEOF ILLINOIS
ILLINOISSTATEUNIVERSITY
STATEMENT NETASSETS. AUXILIARYFACILITIES
             OF
As of June 30, 2005



                                                                                                    Auxiliary
                                                                       Student                      Facilities
                                                  Housing              Activities      Parking       Total
  ASSETS
        Assets:
  Current
    Cashand cashequivalents                         1, 9 9 9 , 4 1 5     7,469,203 $    2,278,608    11,747
                                                                                                          ,226
    Investments                                    20,231,030            1,972,175        675,437    22,878,642
    Accruedinterestreceivable                         181,272               49,640          6,266      237,178
    Accounts           net
             receivable.                            1,020,888             616,486         120,413     1,757
                                                                                                          ,787
    lnventories                                       404,458               80,429                     484,887
    Prepaidexpenses  and deposits                       29,157               1,050       523,635       553,842
    Deferredcharges and obligations                     34,693              49,031        17,441        101,165

     Total currentassets                           23,900,913           10,238,014      3,621,800    37,760,727


  NoncurrentAssets:
    Investments                                    19,030,083                                -       19,030,083
    Bondissuance costs                               163,289              283,727         124,212       571,228
    Capital
          assets,net                               23,219,265           44,915,712     16,843,241    84,978,218

     Totalnoncunent
                  assets                           42,412,637           45,199,439     16,967,453   104,579,529

         Total assets                              66,313,550           55,437,453     20,589,253   142,340,256


  LIABILITIES
  CurrentLiabilities:
    Accounts  payable and accruedliabilities        3,050,459            1,' t86,275      143,895     4,380,629
     Obligationsundercapitalleases
    Assetsheldin custody othersand deposits
                          for                       1,892,003                2,080                    1,894,083
     Deferredrevenue                                  196,209             256,640          35,915       488,764
     Revenue bondspayable                           2,734,813            2,1't9,511       164,897     5,019,221
    Accruedcompensated    absences                    122,164              23,675          10,732       156,571

     Totalcurrent
                liabilities                         7,995,648            3,588,181       355,439     11,939,268

           Liabilities:
  Noncurrent
    Assetsheld in custody othersand deposits
                        for                            149,996                                         149,996
    Revenue  bondspayable                          1't,791,834          24,281,606     11,887,271   47,960,711
    Accruedcomoensated   absences                   1.280.874             248,232        112,527     1,641,633

     Totalnoncurrent
                   liabilities                     13.222.704           24.529.838     11,999,798    49,752,340

       Totalliabilities                            21,218,352           28,118,019     12,355,237    61,691,608

  NETASSETS
  Invested capitalassets,net of related
           in                          debt         8,692,618           18,514,595      6,967,942    34,175,155
  Restricted for:
   Expendable
       CapitalProjects                              2,176,869                                         2,176,869
       Debt service                                  675,438                                           675,438
  Unrestricted                                     33,550,273            8,804,839      1,266,074    43,621,186

       Totalnet assets                         $____45,099J_gg_ n_p]4_,n!_$___9191p11 $
                                                            $___                                     80,648,648




                                                       -60-
STATE OF ILLINOIS
ILLINOISSTATE UNIVERSITY
STATEMENT REVENUES,
             OF                      AND CHANGESIN NET ASSETS. AUXILIARYFACILITIES
                             EXPENSES,
For the Year ended June 30, 2005




                                                                                                              Auxiliary
                                                                           Student                            Facilities
                                                    Housing                Activities        Parking           Total
 OPERATING    REVENUES
  Auxiliary
          enterprises:
            facilities
    Auxiliary                                   $   4 3 , 4 3 1 , 0 1 8$    10,586,058 $      3,735,558 $      57,752,634

                  revenues
     Totaloperating                                 43,431,018              10,586,058        3,735,558        57,752,634

 OPERATING    EXPENSES
 Educational General
            and
  Depreciation                                       1,252,641               1,721,803         372,600          3,347,044
         facilities:
 Auxiliary
  Student housing,        facilities, parking
                   activity         and             32,475,691               7,882,723        2,382,411        42,740,825

    Totaloperating
                 expenses                           33,728,332               9,604,526        2,7s5,011        46,087,869

             income
     Operating                                       9,702,686                981,532          980,547         11,664,765

NONOPERATTNG    REVENUES     (EXPENSES)
 Giftsand donations
 Investment income,net of investment
                                   expenses             661,834               389,071            59,684         1, 11 0 , 5 8 9
 InterestexDense                                       (633,439)            (1,601,458)        (607,719)       (2,842,616)
 Othernonoperatingrevenues                              190,247                 9,236             3,818           203,301

   Net nonoperating      (expenses)
                  revenues                              218,642             (1,203,1 )
                                                                                   51          (544,2171       (1,528,7261

      Income(loss)beforecapitalitems                 9,921,328                (221,619)        436,330         10,136,039

       grantsand gifts
 Capital                                                                      410,640                             410,640

  Totalcapitalitems                                                           410,640                             410,640

           (decrease) net assets
    Increase        in                               9,92't,328                189,021         436,330         10,s46,679

NETASSETS
Net assets - beginning of year                         73,870
                                                    35,1                    27,130,413        7,797
                                                                                                  ,686            01
                                                                                                               70,1 ,969

Net assets - end of year                        $___-1!,09L1_99_ 27,319,434
                                                             $                           $    8,234,016 $ -    80,648048




                                                              - 6 1-
                                  STATE OF ILLINOIS
                             ILLINOIS STATE UNIVERSITY
                 CALCULATION SHEET FOR INDIRECT COST CARRYFORWARI)
                                     June30,2005


l.   Cashand EquivalentsBalance

     Add:

          Cash                                               r313,636

          CashEquivalents .

                                 ......
                      BankDeposits

                      MarketableSecurities

                      Certificates Deposit
                                 of

                               Agreements
                      Repurchase

                      Other
                          cash        items ........
                              equivalent

     Interfund receivables                                                     1,313,636

)    AllocatedReimbursements

     Enterthe total indirectcostreimbursements
                                             allocatedfor
     expenditure the fiscal yearcompleted:
                 for
     $4.753.957; enter      of
                       30Yo this amount                      r.426.187

3.   UnallocatedReimbursements

     Enterthe lesser                      indirectcost
                    ofthe actualunallocated
     reimbursements the yearcompleted 10%of
                     for                 OR
     totalindirectcostallocations theyearcompleted
                                for                  .....    r73,643

     Encumbrances   and Current Liabilities
     Paid in the LapsePeriod

     Enter the amountof:

          CurrentLiabilities                                  237,004

                    .........
          Encumbrances

     Total                                                    237,004

5.   Indirect Cost Carry-forward

     a.   Enterthe total of items2- 3 and4                                     1,8360834

     b. Subtract
               from item I                                                     (523,198)

          If a positivenumberresults,enterhereandremit
          for depositin the IncomeFund.
                                                                         t-t
                                                                         t-I



                                                 -62-
                                   STATE OF ILLINOIS
                              ILLINOIS STATE UNIVERSITY
                         CURRENT TINRESTRICTED LOCAL FUNDS
                      CONTINUING EDUCATION AND PUBLIC SERVICES
                     CALCULATION SHEET FORCURRENT EXCESSFUNDS
                                      June30.2005

l.   Current AvailableFunds

     Add:

         Cash...

         CashEquivalents .

                                 ......
                      BankDeposits

                      MarketableSecurities

                      Certificates Deposit
                                 of

                               Agreements
                      Repurchase

                                        items ...
                      Othercashequivalent

     Interfundreceivables

             Total CurrentAvailableFunds .

2.   Working CapitatAllowance

     Add:

     Highestmonth'sexpenditures

     Encumbrances currentliabilitiespaid in lapseperiod
                and

     Deferredincome

              deposits
     Refundable

     Allowancefor RestoringInventoryto Normal Level ....

     Allowancefor Sick LeaveNacationPavouts

             Working CapitalAllowance

3.   Current Excess
                  Funds

     DeductB from A and enterhere                                           ".1 ,r*;l
4.   Calculation of Income Fund Remittance

     An entity may offset excess capital or current funds
     within the entity. Enter the amount to be offset, if any here              (86,522)

     Enter the algebraic sum of C and D and remit the amount due, if any,
     for deposit in the Income Fund.




                                                     -63
                                   STATE OF ILLINOIS
                              ILLINOIS STATE UNIVERSITY
                        CURRXNT UNRESTRICTED LOCAL FUNDS
                    SALES AND SERVICES OF EDUCATIONAL ACTIVITIES
                    CALCULATION SHEET FOR CURRENT EXCESSFUNDS
                                      June30,2005
1.   Current Available Funds
     Add:

         Cash ,

         CashEquivalents
                       ......

                     BankDeposits
                                ......

                     MarketableSecurities

                     Certificates Deposit
                                of

                              Agreements
                     Repurchase

                     Other
                         cash        items ......
                             equivalent

     Interfundreceivables

             Total CurrentAvailableFunds ...
,    Working Capital Allowance
     Add:

     Highestmonth'sexpenditures

     Encumbrances currentliabilities paid in lapseperiod
                and

     Deferredincome

     Refundable
              deposits

     Allowancefor RestoringInventoryto Normal Level ...

     Allowancefor Sick LeaveNacationPayouts

             Working CapitalAllowance

3.   Current ExcessFunds

     DeductB tiom A andenterhere ..                                     590.298

4.   Calculationof IncomeFund Remittance
     An entity may offsetexcess  capitalor currentfunds
     within the entity. Enterthe amountto be offset,if any here         (6s7
     Enterthe algebraic  sum of C andD andremit the amountdue,if any,
     for depositin the IncomeFund.




                                                    -64-
                                   STATE OF ILLINOIS
                              ILLINOIS STATE UNIVERSITY
                         CURRENT LINRESTRICTED LOCAL FI.]NDS
                           STT]DENTPROGRAMS AND SERVICES
                     CALCULATION SHEET FORCURRBNT EXCESSFI.]NDS
                                      June30,2005

1.   Current AvailableFunds

     Add:

         Cash...                                                            3,863,063

         CashEquivalents..

                      BankDeposits
                                 ......

                      MarketableSecurities

                                 of
                      Certificates Deposit

                      Repurchase
                               Agreements

                                        items .
                      Othercashequivalent

     Interfundreceivables

             Total CurrentAvailableFunds ...                           A.   3,863,063
)    Working Capital Allowance

     Add:

     Highestmonth'sexpenditures

     Encumbrances currentliabilitiespaid in lapseperiod
                and                                                          298,711

     Defenedincome

     Refundable
              deposits

     Allowancefor RestoringInventoryto Normal Level .

     Allowancefor Sick LeaveNacationPayouts

             Working CapitalAllowance

3.   Current Excess
                  Funds

     DeductB from A andenterhere ..                                    ".f ostt/rol
4.   Calculationof IncomeFund Remittance

     An entity may offsetexcess  capitalor currentfunds
     within the entity. Enterthe amountto be offset,if any here        'l   o*tl
     Enterthe algebraic  sumof C andD andremit the amountdue,if any,
     for depositin the IncomeFund.



                                                  -65-
                                             STATE OF ILLINOIS
                                        ILLINOIS STATE UNIVERSITY
                                  CURRENT UNRESTRICTED LOCAL FUNDS
                                     FIELD TRIPS AND FOREIGN STUDY
                              CALCULATION SHEET FORCURRENT EXCESSFT]NDS
                                                June30.2005

1.   Current AvailableFunds

     Add:

         C a s h. . . . . .

         CashEquivalents...

                                         .....
                              BankDeposits

                              MarketableSecurities

                                         of
                              Certificates Deposit

                                       Agreements
                              Repurchase

                                  cash
                              Other           items ........
                                      equivalent

     Interfundreceivables

              Total CurrentAvailableFunds .

2.   Working Capital Allowance

     Add:

     Highestmonth'sexpenditures

     Encumbrances currentliabilities paid in lapseperiod
                and

     Defened income

     Refundable
              deposits

     Allowancefor RestoringInventoryto Normal Level ...

     Allowance for Sick LeaveNacation Payouts

               Working Capital Allowance

3.   Current Excess Funds

     DeductB from A and enterhere ........                                  C   (1

4,   Calculation of Income Fund Remittance

     An entity may offset excesscapital or current funds
     within the entity. Enter the amount to be offset, if any here

     Enter the algebraic sum of C and D and remit the amount due, if any,
     for deposit in the Income Fund.




                                                      -66-
                                  STATE OF ILLINOIS
                             ILLINOIS STATE TJNIVERSITY
                                SERVICE DEPARTMENTS
                    CALCULATION SHEET FORCURRENT EXCBSSFUNDS
                                     June30.2005

l.   Current A vailabieFunds

     Add:

         Cash

         CashEquivalents

                      BankDeposits
                                 ......

                      MarketableSecurities

                      Certificates Deposit
                                 of

                      Repurchase
                               Agreements

                      Othercashequivalent
                                        items ...

     Interfundreceivables

             Total CurrentAvailableFunds

7    Working Capital Allowance

     Add:

     Highestmonth'sexpenditures

     Encumbrances currentliabilitiespaid in lapseperiod
                and

     Defened income

     Refundable
              deposits

     Allowancefor RestoringInventoryto Normal Level

     Allowance for Sick LeaveNacation Payouts

             Working CapitalAllowance

3.   CurrentExcessFunds

     DeductB from A and enterhere                                         640,917

4.   Calculationof IncomeFund Remittance

     An entity may offsetexcess  capitalor currentfunds
     within the entity. Enterthe amountto be offset,if any here        ".wr*rl
     Enterthe algebraic  sumof C andD andremit the amountdue,if any,
     for depositin the IncomeFund.




                                                  -67-
                                       STATE OF ILLINOIS
                                  ILLINOIS STATE LTNIVERSITY
                            AUXILIARY FACILITIES - REVENUE BONDS
                                       STUDENT HOUSING
                        CALCULATION SHEET FORCURRENT EXCESSFT]NDS
                                          June30.2005

1.   Current AvailableFunds

     Add:

         C a s h. . . . . .

         CashEquivalents...

                                         ......
                              BankDeposits

                              MarketableSecurities

                              Certificates Deposit
                                         of

                                       Agreements
                              Repurchase

                                                items ...
                              Othercashequivalent

     Interfundreceivables

               Total Current
                           AvailableFunds ......

)    Working CapitatAllowance

     Add:

     Highestmonth'sexpenditures

     Encumbrances currentliabilities paid in lapseperiod
                and

     Defenedincome

              deposits
     Refundable

     Allowancefor RestoringInventoryto Normal Level ..

     Allowancefor Sick LeaveNacationPayouts

               Working CapitalAllowance

3.                Funds
     Current Excess

     DeductB from A and enterhere ...                                    478,172

4.   Calculationof IncomeFund Remittance

     An entity may offset excess capitalor currentfunds
     within the entity. Enterthe amountto be offset,if any here        10.820.1

     Enterthe algebraic  sumof C andD andremit the amountdue,if any,
     for depositin the IncomeFund.



                                                      -68-
                                   STATE OF ILLINOIS
                              ILLINOIS STATE UNIVERSITY
                        AUXILIARY FACILITIES . REVENUE BONDS
                                  STUDENT ACTIVITIES
                    CALCULATION SHEET FORCURRENT EXCESSFTINDS
                                      June30,2005

1.   Current AvailableFunds

     Add:

         Cash .

         CashEquivalents
                       ......

                      BankDeposits
                                 ......

                      MarketableSecurities

                                 of
                      Certificates Deposit

                               Agreements
                      Repurchase

                      Other
                          cash        items ........
                              equivalent

     lnterfundreceivables

             Total CurrentAvailableFunds .

)    Working Capital Allowance

     Add:

     Highestmonth'sexpenditures                                             t.017.761

     Encumbrances current liabilities paid in lapseperiod
                and

     Defenedincome

              deposits
     Refundable

     Allowancefor RestoringInventoryto Normal Level .

     Allowancefor Sick LeaveNacationPayouts

             Working CapitalAllowance

3.   Current ExcessFunds

     DeductB from A andenter
                           here ...                                         1,751,941

4.   Calculationof IncomeFund Remittance

     An entity may offsetexcess  capitalor currentfunds
     within the entity. Enterthe amountto be offset,if anyhere              (3,183,067)

     Enter the algebraic sum of C and D and remit the amount due, if any,
     for deposit in the Income Fund.




                                                  -69-
                                     STATE OF ILLINOIS
                                ILLINOIS STATE T]NIVERSITY
                          AUXILIARY FACILITIES - REVENUE BONDS
                                     PARIilNG SERVICES
                      CALCULATION SHEET FOR CURRENT EXCESSFUNDS
                                        June30,2005

l.   Current AvailableFunds

     Add:

         Cash .

         Cash          ......
             Equivalents

                       BankDeposits
                                  ......

                       MarketableSecurities

                       Certificates Deposit
                                  of

                               Agreements
                      Repurchase

                                         items .
                       Othercashequivalent

     Interfund receivables

             Total CurrentAvailableFunds ...

)    Working Capital Allowance

     Add:

     Higfrestmonth'sexpenditures

                and
     Encumbrances currentliabilities paid in lapseperiod

     Deferredincome

     Refundable
              deposits

     Allowancefor RestoringInventoryto Normal Level .

                                    Pavouts
     Allowancefor Sick LeavelYacation

             Working CapitalAllowance

3.                Funds
     Current Excess

     DeductB from A and enterhere                                           C          I

4.   Calculation of Income Fund Remittance

     An entity may offset excesscapital or current funds
     within the entity. Enter the amount to be offset, if any here              1,31

     Enter the algebraic sum of C and D and remit the amount due, if any,
     for deposit in the Income Fund.




                                                    -70-
                               STATE OF ILLINOIS
                           ILLINOISSTATE UNIVERSITY
             AUXILIARYFACILITIES,
                                ACTIVITIES, AND ACCOUNTINGENTITIES
                             Year Ended June 30, 2005


A listing the University's
        of              Auxiliary                                     theirpurpose,
                                                              Entities,
                                         Activities, Accounting
                                Facilities,       and
andtheirsources revenue theyearended
               of         for             June30,2005is provided
                                                               below.

IndirectGostSupport

Theseaccounts supported indirect
               are         by                                       that
                                     costreimbursementsaccounts receive
                                                        or                    funding
as a by-product federal,state,and privategrants. The funds pay for administrative
               of                                                               costs,
physical                 utilities, grantproposals.
        plantcostincluding       and

                  Local Funds
CurrentUnrestricted
            Education Public
   Continuinq       and    Services

   Theseactivities established
                  are            primarily provide
                                         to                         to
                                                            services individuals
                                                    noncredit                     and
   groups external the institution.
                 to                                   community
                                                include
                                  Theseactivities                       programs
                                                                 services         and
   cooperative extension services. Included this categoryare conferences,
                                            in                              institutes,
   generaladvisoryservices,reference   bureaus,radio and television,          alumni
                                                                    consulting,
   activities, similar
            and                      services particular
                      noninstructional       to         sectors the community.
                                                              of

   SalesandServices EducationalActivities
                  of

   Sales and servicesof educational                            and help demonstrate
                                              supportinstruction
                                     activities
   classroom or relatededucational                               is
                                  techniques students. Revenue from services
                                             to                                 and
           furnished
   materials          which are incidental the department.Receipts from testing,
                                         to                          are
   cartographicservices,                                 materials,
                        book sales, sales of instructional         and publicopinion
   services.

         Proqrams Services
   Student      and

   Theseprograms supported studentactivity
                 are         by                              from athletic
                                           fees, gate receipts            events,
   and income           and
             fromconcerts   performances       by
                                       sponsored  the students.

   In addition the intercollegiate
              to                                                         of
                                        programs, fundssponsor variety student
                                athletics         the              a
   functions        speakers,
            including                  of           legal
                             acquisition art objects,    assistance, grants-in-aid.
                                                                   and

   FieldTripsand Foreiqn
                       Studv

   Theseactivities supporting
                 are           program                  creditcourses an off-campus
                                       costsfor primarily            at
   site or at a foreign educationalinstitution. The supporting costs include housing,
                printing,
   transportation,                admissions, otherrelated
                        advertising,          and             programcosts.




                                        -71-
                             STATE ILLINOIS
                                   OF
                         ILLINOISSTATEUNIVERSITY
             AUXILIARY
                     FAGILITIES,       AND        ENTITIES
                              ACTIVITIES, ACCOUNTING
                           YearEndedJune30,2005

ServiceDepartments
              provide
Thesedepartments     services various
                            to       University           on           basis.
                                               departments a charge-back
Rates established reviewed
     are         and        periodically operate
                                      to                  department a break-
                                                eachservice       on
evenbasis.

AuxiliaryFacilities

         Housinq
   Student

            for
   Accounts the University's student         hallsanddining
                                     residence             facilities
                                                                    whoseconstruction
   was financed through issuance revenue
                       the          of       bonds. The primary        of
                                                               sources revenue  are
   roomand boardincome,   interest,
                                 foodstores'sales,bakerysales,            and
                                                              and laundry vending
   machine commissions.
         Activities
   Student

   Accountsfor the University's                                golf course,center for
                               studentunion, athleticfacilities,
   performingarts, and relatedfacilities,
                                        whose construction  was financedthroughthe
   issuanceof revenuebonds. The primarysourcesof revenueare studentfees and
   merchandise service
              and        sales.
   Parkinq
         Services
   Thisaccount
             supports development maintenance campus
                     the          and            of       parking anddecks.
                                                                lots
   Thesource fundsis fromparking
            of                 permits,          and rental.
                                            fines,
                                      meters,




                                        -72 -
                               STATE OF ILLINOIS
                           ILLINOISSTATE UNIVERSITY
                  SUMMARYOF FOUNDATION   PAYMENTS    TO UNIVERSITY
                        Years Ended June 30, 2005 and 2004


                                                          as
The Universityrecognizeslllinois State UniversityFoundation a University-Related
          as       in
Organization defined the University         1982as Amended
                                   Guidelines                 .
                                                           1997

Duringfiscalyears2005 and 2004,lllinoisStateUniversity     engaged the Foundation, under
contract, provide
        to        fund raising services.As provided the contract
                                                   in                       the
                                                                 agreement, University
advanced  fundsto the Foundation $260,000 fiscalyears2005and 2004. As required
                                  of         in                                       by
         the
contract, Foundation    fully repaidthe University,usingfunds considered  unrestrictedfor
                             per
purposes the computations University
         of                                Guidelines 1982as Amended    1997. ln addition,
the Foundation gave the University   nonqualifyingrestrictedfunds. Presented  below is a
summary all fundsthat the Foundation
         of                              gaveto the Universityduringfiscalyears2005and
2004.Therewas no cumulative    unreimbursed        for
                                            subsidy fiscal  years2005and 2004.

                                                                    2005          2004

      unrestricted
Totally         funds                                         $     58.651 $      109.81

Funds         only
     restricted as to campus,         or
                               college,
  department, generally
              and                 for
                          available ongoing
  Universityoperations:
  Given a particular
        to           college                                       424,396   224,682
  Given a particular
        to           department                                   1,721,684 1,516,754
Fundsrestricted:
  Given scholarships
       for                                                        1,147,662 1 , 0 0 6 , 9 1 1
       for
  Given certain   programs                                        8,676,059 5,079,321
  Otherrestrictedfunds                                              49.853      35.526

             Totalfundsconsidered
                                restricted                     12,019.654 7.863.194

Totalfunds providedto the University
   by the Foundation                                          $12*028J05 $lpz3*005




                                          - 7 3-
                                   STATE OF ILLINOIS
                              ILLINOISSTATE UNIVERSITY
                      NONINSTRUCTIONAL     FACILITIES RESERVE
                      For the Years Ended June 30, 2005 and 2004


Non-instructional
               Facilities      Account (Development
                         Reserve                  Reserve)
The Boardof Regents, behalfof lllinois
                      on               StateUniversity,            a
                                                        established Non-instructional
       Reserve January 1987by transferring
Facility       on        22,                   $1,250,000 available
                                                         of          revenue fromthe
19858BondSeriesto be heldfor use to acquire           student
                                             additional                  space. The
                                                              recreational
Boardalsoapproved useof interest
                  the             derivedfromthe investment the reserve the lease
                                                            of           for
of additional                   space until such time as the purchaseof additional
             student recreational
          spaceis approved the Board.
recreational               by




                                        - 7 4-
                               STATE OF ILLINOIS
                           ILLINOISSTATE UNIVERSITY
               DISCLOSURE SUPPORTWHICHAUXILIARYFACILITIES
                          OF
                 AND ACTIVITIESHAVE RECEIVED   DURINGTHE YEAR
                       FROMSTATE APPROPRIATED     FUNDS
                                 June 30, 2005


Certain
      student employees paidfromfundsof the Federal
                        are                                 Work-Study
                                                      College         Program.In
accordance with long standingpublicpolicyin lllinois,          $3,001,399 group
                                                    approximately        of
insuranceexpense  and $1,087,577 retirement contributions also paidfrom State
                                of          plan           were
appropriatedfundsduringthe year endedJune 30, 2005. Theseamounts shownin the
                                                                  are
          financial
University's       statements "Payments behalf the University."
                            as          on        of




                                      - 1 5-
                                  STATE OF ILLINOIS
                             ILLINOISSTATE UNIVERSITY
                ILLINOISINSTITUTE FOR ENTREPRENEURSHIP      EDUCATION
                               FINANCIALINFORMATION
                           For the Year Ended June 30, 2005

REVENUES EXPENDITURES
       AND

REVENUES
          portion lllinois
  Allocated     of                     lumpsum
                         StateUniversity
     appropriations theStateof lllinois tuition fees
                 from                 and      and                        $ 188.724

EXPENDITURES
  Personal
         services benefits
                and                                                           131039
                                                                                 ,
  Contractual
           services                                                            46,952
  Travel                                                                        1,079
  Commodities                                                                   1,652
  Equipment                                                                     4,996
  Telecommunications                                                            3.006

             Totalexpenditures                                                188.724

     OF
EXCESS REVENUES
              OVEREXPENDITURES                                            $      -

The lllinois
           Institute Entrepreneurship
                   for                        (llEE)was created an act of the lllinois
                                      Education                by
General  Assembly 1988. The purpose the llEE is to fostergrowthand development
                  in                    of                                         of
entrepreneurship educating
                 by                citizens the viability entrepreneurship a career
                            lllinois       to           of               as
optionand to the role and contributions entrepreneurs economic
                                       of            in         development job
                                                                            and
creation.The llEE is mandated reachall areasof the State, ages,all ethnic
                             to                          all             groups, and
income  levels.

The llEE'sgoalsare to help remedythe deficiencies the preparation entrepreneurship
                                                in              of
education teachers,increase quality
                          the      and quantity entrepreneurship
                                              of               educationprograms,
improve             materials, prepare
        instructional       and        personnel serveas leaders
                                                to                             in
                                                                 and consultants
thefieldof entrepreneurship
                         education economic
                                 and         development.
                                                                 and, by working
The llEE was createdunder the oversightof lllinoisState University
           with
cooperatively the University, llEE offers lllinoisteachers
                            the                                        accredited
                                                          two university
graduate      in
       courses entrepreneurship.

The llEE has a fifteen-member               representing
                           board of directors                          and
                                                                commerce
                                                       education,
       government, labor.
industry,           and
To moreeffectively
                 reachits markets, lnstitute
                                 the                                 operational
                                                         threedistinct
                                           has established
divisions:CommunityEconomic Development,YouthEnterpriseDevelopment, Teacher
                                                                    and
Education Training.
         and
The currentDirector the llEE is lda Manning,
                  of                                             Suite420,Chicago,
                                                 at222 W. Ontario,
                                           located
lflinois
       60610,
            telephone(312)587-9296.




                                        -16-
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