HB4905 96TH GENERAL ASSEMBLY

LRB096 04526 NHT 14642 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB4905

Introduced 1/15/2010, by Rep. Richard P. Myers

SYNOPSIS AS INTRODUCED:

110 ILCS 205/9.33 new

Amends the Board of Higher Education Act. Requires the Board to establish an audit committee to examine any plan by a public university to increase tuition from the previous academic year by more than 10%. Provides that the committee shall consist of no less than 3 members, designated by the Chairperson of the Board, to assist in the oversight of the financial reporting and audit processes of those universities whose rate of tuition is being increased from the previous academic year by more than 10%. Provides that the committee shall assist the Board in retaining an auditor through the Office of the Auditor General to conduct audits. Sets forth additional duties of the committee. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Board of Higher Education Act is amended by adding Section 9.33 as follows:

(110 ILCS 205/9.33 new)

Sec. 9.33. Audit committee on tuition increases.

(a) In this Section:

"Committee" means the audit committee established under this Section.

"University" means a public university in this State.

(b) The Board shall establish an audit committee to examine any plan by a university to increase tuition from the previous academic year by more than 10%.

(c) The Committee shall consist of no less than 3 members, designated by the Chairperson of the Board, to assist in the oversight of the financial reporting and audit processes of those universities whose rate of tuition is being increased from the previous academic year by more than 10%. At least 2 of the members must be members of the Board. At least one member must have accounting or related financial expertise. In the event that the Board does not have sufficient members qualified or available to serve on the Committee or wishes to broaden the expertise of the Committee, the Board may request that the State Treasurer recommend one or more qualified individuals to sit on the Committee.

(d) The Committee shall assist the Board in retaining an auditor through the Office of the Auditor General to conduct audits under this Section. The auditor selected by the Board shall report directly to the Committee or the Board. At least twice each year and after final budget submissions by the universities, the Committee shall hold a private meeting with the auditor. One of these meetings shall be held prior to commencement of the audit and the other upon issuance of the final audit report. Additional meetings shall be held upon the request of a Committee member, a Board member, or the auditor and may include such staff members as the Committee or Board determines necessary.

(e) In carrying out its duties, the Committee shall proactively assist the Board in overseeing (i) the integrity and quality of the financial documents of the universities, (ii) the auditor's performance and ability to perform, and (iii) the performance of each university's own internal audit and internal control functions. In addition, the Committee shall do all of the following:

(1) Review and evaluate audit fees.

(2) If the Committee believes that the auditor's performance is not adequate in quality, recommend such steps as may be necessary to elicit appropriate performance, including replacement of the auditor.

(3) Regularly review with the auditor any audit problems, any risks of material statements due to fraud, any difficulties with a university's response (including restrictions or attempts to restrict the auditor's activities, restrictions on access to information, and significant disagreements with a university's personnel) and the responsibilities, budget, and staffing of each university's internal audit and control functions.

(4) Review the audited financial statements and interim statements and discuss them with the universities and internal auditors. These discussions shall include a review of particularly sensitive accounting estimates, reserves, and accruals, judgmental areas, audit adjustments (recorded or not) and other such matters as the Committee or auditor deems appropriate.

Section 99. Effective date. This Act takes effect upon becoming law.