↓ Download PDF ← Back to Library
Antioch University
Results
October 17,2002
Audit Committee
Antioch University
Dear Members of the Audit Committee:
We are pleased to present the results of our audit of the financial statements of Antioch
University for the year ended June 30, 2002. Our opinion states that the financial statements,
which are the responsibility of the University’s management, are fairly presented in accordance
with accounting principles generally accepted in the United States. Our approach for the
University was designed to combine a historical perspective with a focus on the University’s
current and emerging business issues.
This Report to the Audit Committee summarizes our audit process, the scope of our engagement,
the reports issued and various analyses and observations related to the University’s financial
position and results of operations. The document also reviews the Audit Committee
communications required by our professional standards, as well as current accounting issues that
will affect the University.
The completion of this year’s audit was accomplished through the effective support and the
assistance of the University’s finance and administrative personnel. As always, we strive to
continually improve the quality of our audit services. This meeting is a forum for you to provide
feedback on ways we can continue to meet and exceed your expectations.
We appreciate this opportunity to meet with you. If you have any questions or comments please
call Ron
Kaufinan
at 219-425-4839 or Mark Scheiwer at 937-226-5559.
Very truly yours
…………………………………………………………………………….. Summary of What We Agreed to Do 1
Team to Serve the University ……………………………………………………………………………………….. 2
. . …………………………………………………………………………………………… Required Communications 3
Significant Accounting and Audit Matters …………………………………………………………………….. 8
Other Services Provided and Looking Ahead …………………………………………………………………. 9
Our Approach
As discussed with management during the planning process, our audit plan represented an
approach responsive to the assessment of risk for the University. Specifically, we designed our
audit to:
>Â Issue an opinion on the financial statements of the University.
Issue reports in accordance with OMB Circular A-133 Single Audit for the University’s
Student Financial Aid Programs and other Federal Awards.
>Â Issue an opinion on the financial statements of WYSO-FM and certification of the Annual
Financial Report to the Corporation for Public Broadcasting.
>Â Issue an opinion on the financial statements of Glen Helen Ecology Institute.
Issue our required audit communications to the Audit Committee.
Areas of Audit Emphasis
The principal areas of audit emphasis were as follows:
w Contributions receivable.
Reserves on receivables.
Cash and investments and investment income.
Debt and debt covenants.
Property and equipment.
Student Financial Aid-OMB A- 1 3 3.
There were no changes to our planned approach or audit areas of emphasis.
Team to Serve the University
Ron Kaufman ………………………………………………………………………………………. Audit Partner
……………………………………………………………………. Tom O’Neil Independent Review Partner
Mark Scheiwer …………………………………………………………………………………… Audit Manager
Johanna Matheny …………………………………………………………………………………. Tax Manager
Required Communications
Statement of Auditing Standards Nos. 61, 89, and 90 require the auditor to ensure that the Audit
Committee receives additional information regarding the scope and results of the audit that may
assist the Committee in overseeing management’s financial reporting and disclosure process.
Below we summarize these required communications.
Area Comments
Auditors’ Responsibilities under
Generally Accepted Auditing
Standards (GAAS)
The financial statements are the responsibility We have conducted our audit in accordance with
of management. Our audit was designed in auditing standards generally accepted in the
accordance with GAAS, which provides for United States and believe that our audit provides a
reasonable, rather than absolute, assurance reasonable basis for our opinion.
whether the financial statements are free of
material misstatement. We have a
responsibility to opine on whether the
financial statements are fairly stated in
accordance with Accounting Principles
Generally Accepted in the
united
states. …………………………… ” …….. “- ……………. ” ……. ” ………. “.” ………….. ” ……………… ” …………………………………… “…– ” – …………………….. ” -.– ………….. ” ….-…- “” ………………. ” …..
Significant Accounting Policies
Initial selection of and changes in significant No changes were noted.
accounting policies or their application and
new accounting and reporting standards
during the year must be
reported. ……………….. ” ….. – “” …………….. …………………………………………. ” ….. ” ………………………………………………………………………………….. ” – …………………………….. ” ………………………………..
Management Judgments and
Accounting Estimates
The preparation of financial statements We have audited the significant accounting
requires the use of accounting estimates. estimates computed by management and have
Certain estimates are particularly sensitive due determined that the methods are reasonable and
to their significance to the financial statementsconsistent with those used in the prior years.
and the possibility that future events may
differ significantly from management’s
expectations. …….. “” …………………………………………………………………………………….. ” ………………….. ” ………………. “…” …………. “.” ….. – ……………………………….. ” ……..-…..
……. ” “” ” ” ..-……..-…-…-..- ” -..-.. “” ” ” —” ” ………..
Required Communications u (continued) — –… – -……..
Area Comments
Significant Audit Adjustments Proposed adjustment is immaterial in relation to
unrestricted net assets. Current year proposed
adjustment relates to the under-accrual of legal
reserve of $130,000.
” ” ………………………………………….. ” …………………….. —-. ….. ….. .— – ..-… -.-
Other Information in Documents Not applicable.
Containing Audited Financial
Statements ” ………………………………………………… ” .–..—-..—–…–.-. “..” ….,…-……–.-..— “–“..” .–
Disagreements With Management on There were no disagreements with management on
Financial Accounting and Reportingfinancial accounting and reporting matters.
Matters u .- “,.”..” “..-” .- “”” “” ” …-” …………………. “-” .—.-.—…- – “.”.”…”–” ……..
Major Issues Discussed With There were no major issues discussed with
Management ………………. – Prior u ……… to – ………….. Retention – management prior – to — retention. …………………………… — ……………………………………..
Consultation With Other Accountants We are not aware of any consultation with other
accountants. – …………………. ” …. ” ………………—. “”.”” – ” .-.. “..” ………………………………………. ” ” .-…….. “….” -.- ” .-.—-…- ……………………………… ”
Serious Difficulties Encountered in There were no difficulties encountered in
Performing the Audit erforming the audit. ………………….. ” ” .. ……………………….. P ……………………………………… “.”.” .- “..” ” – ………………….
Material Errors, Irregularities, and There were no material errors, irregularities or
Illegal Acts illegal acts identified as a result of the audit. ……………….. ” ” “.” “” …….. …………………………………….
Significant Disclosures Not Made All significant disclosures required have been made –
in the audited financial statements. ….. ……………… ,,,.,” ………………………………………………. “-“.” ” ” ” – ” – …………. – …………. “.”
………. “-…-” ………………. …….. -..—-” ……. – …. ……. …………………………
Required Communications (continued) ……………………………………………………………………………………. ” …………………………………………….. ” …… ” …………. –…- ………………….. ……. “……………… …. -.-.- ……. ” ……………………………… – ……….
You engaged us to conduct an audit of Antioch University’s financial statements and federal
programs for the year ended June 30, 2002 in accordance with generally accepted auditing
standards, the standards for financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States, and Office of Management and Budget
(OMB)
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Our
responsibilities for testing and reporting on internal control and on compliance with applicable
laws and regulations under those standards are described in the table below. In addition, the table
contrasts our responsibilities in this engagement with other procedures that we could perform in
other financial-related audits.
Financial
statement
audit-
GAAS
Our Responsibility Regarding
Internal Control
Financial
statement
audit-
Government
Auditing
Standards
0-ur Responsibility
Regarding
Compliance with
Laws and
Regulations
We consider internal control to plan the We design our audit to provide
nature, timing and extent of audit reasonable assurance of detecting
procedures for the purpose of expressing fraud that is material to the
our opinion on the financial statements. financial statements and illegal acts
We report, orally or in writing, any that have a direct and material
reportable conditions, including material effect on the financial statement
weaknesses that we identify as a result of amounts.
our audit procedures. Our report does not
provide assurance on internal control over
financial reporting.
In addition to the GAAS responsibilities, In addition to the GAAS
we are required to issue a written report on responsibilities, we design our
our consideration of internal control and audit to provide reasonable
identify reportable conditions, including assurance of detecting material
material weaknesses, if any. Our reports do misstatements resulting from
not provide assurance on internal control noncompliance with provisions of
over financial reporting. contracts or grant agreements that
have a direct and material effect on
the financial statements. We issue a
written report on the results of
these procedures; however, our
report does not express an opinion
on compliance.
” ….. ” ” “.”—.”.” -“” …-..-…—- –..-…- ” ………. – –“” …………………………………
Reauired Communications (continued)
OMB
Circular
A-133
Our Responsibility Regarding
Internal Control
Examination-
level
attestation
Our Responsibility
Regarding
Compliance with
Laws and
Regulations
We consider internal control over federal
award program compliance. Our tests of
controls include the controls over all major
federal programs (aggregate expenditures
of all major programs are to encompass at –
least 25% of total federal program
expenditures). We report on such
consideration and testing, and disclose
reportable conditions including material
weaknesses we identify. Our report does
not provide assurance on the internal
control over compliance.
We could be engaged to examine and
report on management’s written assertion
as to the design and operating effectiveness
of internal control. The engagement would
be conducted in accordance with AICPA
standards for attestation engagements, and
would include an evaluation of the design
of the entity’s internal control, and
performing tests of relevant internal
control policies and procedures to evaluate
their operating effectiveness.
We perform procedures for the
purpose of expressing an opinion
whether major federal programs
(aggregate expenditures of all
major programs are to encompass
at least 25% of total federal
program expenditures) have been
administered in compliance with
applicable laws and regulations.
We could be engaged to examine
and report on management’s
written assertion regarding
compliance. The engagement could
be conducted at the financial
statement level, or could result in a
determination as to whether all
federal programs have been
administered in accordance with
applicable laws and regulations.
The engagement would be
conducted in accordance with
AICPA standards for attestation
engagements, and would include
obtaining an understanding of the
specific compliance requirements,
obtaining an understanding of the
design of the entity’s internal
control over compliance, and
testing compliance with specified
requirements.
………………………….. ” -…- ” “…”–“.- ………………………….. ” ” …. “…– ” “”” – ……………………… “.
Required Communications (continued) ………………. …….-……. ” ” “.- ….. ” …. -.- …- – -..-.” .–….–. – ………………………
Our Responsibility Regarding
Internal Control
Our Responsibility
Regarding
Compliance with
Laws and
Regulations
Agreed-upon We could be engaged to perform agreed- We could be engaged to perform
procedures upon procedures related to management’s agreed-upon procedures related to
level written assertions as to the design and management’s written assertions
attestation operating effectiveness of internal control. regarding compliance. The
The objective of the agreed-upon objective of the agreed-upon
procedures is to present specific findings procedures is to present specific
to assist users in evaluating management’s findings to assist users in
assertions. Our procedures generally may evaluating management’s
be as limited or extensive as the users assertions. Our procedures
desire as long as the users (a) participate in generally may be as limited or
establishing the procedures to be extensive as the users desire as
performed and (b) take responsibility for long as the users (a) participate in
the sufficiency of such procedures for their establishing the procedures to be
purposes. performed and (b) take
responsibility for the sufficiency of
such procedures for their purposes.
Sianificant Accountina and Audit Matters
Contributions receivable and allowance
.- …………………………… ” ……–. ” – ….. ” – …-.-…. – -“-“-..”-.” …. – ………. -….,….. …………………. “..-“.” ……………….. – ….. – – …….. “”—“”-.-“..–.”.” ….. ” ….-.- – …….. ” …..
> Student receivables
Allowance for uncollectible Perkins loans.
* Allowance for doubtful accounts on outstanding student accounts.
> Investments
Investments in private companies.
0 Endowment investments increased significantly with the addition of $10 million gift from
Leo Drey.
Subsequent significant decline in investments after year-end.
………. ………………………………………………………………… ” …………………….. ” ……… ” -” ………… –“- …–….. +.” — —..– ………… ” ………….. ” …..- “..”…”-..- ………..
Accrued liabilities
e Accrual of tenure relinquishment contracts.
.- …………………………………………………………………………………… ” ” ………………… …………………. ” ……………………………. ” -..” ………………………………….. “…”
Debt covenant compliance.
Obtained waiver letters for the New Hampshire and Seattle Bond issues.
Ohio Education bonds in compliance as of year-end.
Campus Visits
Tested control environment at Santa Barbara, Los Angeles, and College at Yellow Springs
Other Services Provided and Looking Ahead
…… ” ……………….- ” …………. ” …………… ” ” ” ..-…-…..-.—. “” .-..–.– ………..-. ” ……….-…” -…–.-,– “” ” ” …..–..-…… “…” — ” …………………….. ………… ……….
Status of Other Audits
Glen Helen Ecology Institute
0 WYSO-FM
Student financial aid and other federal awards-OMB A-133
5 Ernst &Young LLP
Fifth Third Center
Suite 1800
110 North Main Street
Dayton, OH 45402
m Phone: (937) 223-2000
www.ey.com
October 17. 2002
The Audit Committee
Antioch University
INDEPENDENCE COMMUNICATIONS
Consistent with the report and recommendations of the Blue Ribbon Committee on Improving
the Effectiveness of Corporate Audit Committees and as required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees (ISB No. l), we
communicateat least annually with you regarding all relationships between
Ernst & Young and
its related entities and the University and its related entities that, in our professional judgment,
may reasonably be thought to bear on our independence. We are not aware of any relationships
between
Ernst & Young and the University that, in our professional judgment, may reasonably
be thought to bear on our independence.
Accordingly, relating to our audit of the financial statements of Antioch University as of June 30,
2002 and for the year then ended, we are independent certified public accountants with respect to
the University within the meaning of the applicable published rules and regulations of the
Securities and Exchange Commission, the pronouncements of the Independence Standards
Board, and Rule 101 of the American Institute of Certified Public Accountants’ Code of
Professional Conduct, its interpretations and rulings. Our policies relating to financial interests
are stricter than the requirements imposed by these regulatory and professional bodies.
We look forward to discussing these issues with you at our upcoming meeting on October 17,
2002.
This report is intended solely for the information and use of the Audit Committee of the
University, management, and others within the University and should not be used for any other
purposes.
Very
truly
yours
Ernst & Young LLP is a member of Ernst &Young International, Ltd
