Eastern Washington University Exit Conference January 25, 2012

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1 Eastern Washington University Exit Conference January 25, 2012 Washington State Auditor Brian Sonntag Director of State and Local Audit Chuck Pfeil (360) Chuck.Pfeil Deputy Director Kelly Collins (360) Kelly.Collins Local Contact Audit Manager Debbie Pennick, CPA (509) Ext. 108 Deborah.Pennick Local Contact Audit Lead Alexandra Rosebrook, CPA (509) Ext. 106 Meeting Agenda The purpose of our exit conference is to share the results of our independent audit and to provide a forum for open discussion. We are pleased to discuss the results of our audit and other topics as listed below with you. Financial statement audit report and other required communications Tuition waiver audit report Federal grant compliance audit report Recommendations not included in our audit reports Status of prior audit results Report publication Preliminary audit results and recommendations were shared in detail with University management and personnel as they were developed during the audit. We would like to thank staff for their cooperation and timely response to our requests during the audit. We take seriously our responsibility of serving citizens by promoting accountability, fiscal integrity and openness in state and local government. We believe it is critical to citizens and the mission of the University that we work together as partners in accountability to prevent problems and constructively resolve issues. As such, we encourage your comments and questions. Alexandra.Rosebrook

2 Financial Statement Audit University Audit Report We performed an audit of the basic financial statements prepared by Eastern Washington University in accordance with Governmental Auditing Standards. These statements are included in the University s Comprehensive Annual Financial Report (CAFR). This report includes our unqualified opinion dated January 18, 2012, which means that we believe the financial statements are presented fairly, in all material respects. As part of our audit, we obtained an understanding of the internal controls over financial reports. We did not identify deficiencies in internal control over financial reporting that are required to be included in our report. Statewide Audit Report We also perform an audit of the statewide basic financial statements in accordance with Government Auditing Standards. These financial statements are included in the CAFR prepared by the Office of Financial Management. The CAFR reflects the financial activities of all funds, organizations, institutions, agencies, departments and offices that are part of the state's financial operations, including Eastern Washington University. The Statewide CAFR Report was issued November 22, Other Required Communications Professional auditing standards require us to communicate the following information to University management and the Board of Trustees: There were no significant difficulties encountered or disagreements with entity management during the audit. There were no material misstatements in the financial statements corrected by management during the audit. There were no uncorrected misstatements in the audited financial statements. Tuition Waiver Audit Testing On-site testing of tuition waivers is complete. We did not find any instances where an ineligible student received a tuition waiver. Two students selected for testing received graduate service appointment waivers. University policy requires students receiving this type of waiver to work 20 hours per week. University personnel were unable to provide documentation to support that the student met the work requirement for the waiver. Page 2

3 Report Results of our statewide tuition waiver work will be included in this report. The report will also identify best practices identified as a result of the audit. A draft of the audit report will be provided for University review and response. Expected issue date of the Statewide Accountability Report is March Federal Grant Compliance Audit Report Results of our statewide audit of internal controls over federal programs and compliance with federal laws and regulations are included in this report. The Office of Financial Management submits the audit reports on the financial statements and federal single audit to the OMB clearinghouse within the earlier of 30 days after receipt of the report or nine months after the end of the audit period. Expected issue date of the Statewide Federal Single Audit report is March During our audit of the University s Federal Student Aid programs, we reviewed internal controls and compliance in 14 areas. We found no internal control weaknesses or instances of noncompliance that are required to be reported under OMB Circular A-133. Status of Prior Audit Recommendations There were no findings or management letter items in the prior audit. Concluding Comments Report Publication Audit reports are published on our website at and distributed to entities via e- mail in an electronic.pdf file. Please don t hesitate to contact our Office throughout the year when you have questions. Our website also offers many resources, including a client HelpDesk for your auditing and accounting questions. Page 3

4 State Auditor s Office Contacts (University CAFR) Debbie Pennick, CPA Program Manager Alexandra Rosebrook, CPA Auditor in Charge (509) Ext. 108 Deborah.Pennick (509) Ext. 106 Alexandra.Rosebrooka State Auditor s Office Contacts (Statewide Single Audit) Steve Wendling, CPA Audit Manager Loni Dean Assistant Audit Manager (360) Steve.Wendling (360) Loni.Dean State Auditor s Office Contacts (Accountability Audit) Steve Wendling, CPA Audit Manager Jennifer Myers Assistant Audit Manager (360) Steve.Wendling (360) Jennifer.Myers Page 4

5 Washington State Auditor Brian Sonntag INDEPENDENT AUDITOR S REPORT January 18, 2012 Board of Trustees Eastern Washington University Cheney, Washington We have audited the accompanying financial statements of the business-type activities and the discretely presented component unit of Eastern Washington University as of and for the years ended June 30, 2011 and 2010, which collectively comprise the University s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the University s management. Our responsibility is to express opinions on these financial statements based on our audits. We did not audit the financial statements of the Eastern Washington University Foundation. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Eastern Washington University Foundation, is based on the reports of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinions. As discussed in Note 1, the financial statements of Eastern Washington University are intended to present the financial position, the changes in financial position, and, where applicable, cash flows of only that portion of the business-type activities of the state of Washington that is attributable to the transactions of the University. They do not purport to, and do not, present fairly the financial position of the state of Washington as of June 30, 2011 and 2010, the changes in its financial position, or, where applicable, its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, based on our audits and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the discretely presented component unit of Eastern Insurance Building, P.O. Box Olympia, Washington (360) (866) TDD Relay (800) FAX (360)

6 Washington University, as of June 30, 2011 and 2010, and the respective changes in financial position and, where applicable, cash flows thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America. The management s discussion and analysis on pages 4 through 9 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR

7 Washington State Auditor Brian Sonntag Letter of Audit Coverage Eastern Washington University July 1, 2010 through June 30, 2011 Board of Trustees Eastern Washington University Cheney, Washington This letter is to inform Eastern Washington University of the audit work performed by the Washington State Auditor s Office. Eastern Washington University was scheduled for on-site federal audit work during the period of July 1, 2010 through June 30, 2011 related to federal student financial aid. As an agency within the State of Washington, all requirements of the Single Audit Act Amendments of 1996 have been met by the statewide single audit report referenced below. The financial activities of the University are audited in conjunction with the Comprehensive Annual Financial Report for the State of Washington as a whole. We performed the statewide single audit of the State of Washington as of and for the year ended June 30, In accordance with the U.S. Office of Management and Budget (OMB) Circular A-133, we audited the State as one entity, rather than each agency separately. The results of this audit are published in a statewide single audit report, which is available at That report includes the following: An opinion on the Comprehensive Annual Financial Report for the State of Washington. A report on our consideration of the State s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. A report on compliance with requirements applicable to each major program and on internal control over compliance. An opinion on the Schedule of Expenditures of Federal Awards. A schedule of findings and questioned costs. A summary schedule of prior federal audit findings. January 25, 2012 Deborah Pennick, CPA Team Inland Northwest Audit Manger Insurance Building, P.O. Box Olympia, Washington (360) (866) TDD Relay (800) FAX (360)