ILLINOIS STATE BOARD OF EDUCATION
For The Year Ended: June 30, 2010
For the Two Years Ended: June 30, 2010
Summary of Findings:
Total this audit: 6
Total last audit: 3
Repeated from last audit: 2
Release Date: April 14, 2011
State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL
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• The Agency did not have a system in place to identify and monitor all statutory mandates that are applicable to the Agency.
• The Agency did not take any actions on the schools identified to have been on academic watch status after three years following placement in such status.
• The Agency did not audit all major systems of internal accounting and administrative control as required by the Fiscal Control and Internal Auditing Act.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
NEED TO IMPROVE CONTROLS OVER STATUTORY REQUIREMENTS
The Agency did not have a system in place to identify and monitor all statutory mandates that are applicable to the Agency.
Management identified laws enacted during fiscal years 2009 and 2010, but was unable to provide a complete list of all applicable laws. (Finding 1, page 12)
We recommended the Agency establish procedures to identify, monitor, and ensure compliance with applicable laws, including designation of responsible parties.
Agency management agreed with the recommendation and stated procedures will be established to identify, monitor, and ensure compliance with applicable laws.
SCHOOLS ON ACADEMIC WATCH LIST
The Agency did not take any actions on the schools identified to have been on academic watch status after three years following placement in such status.
We noted 411 schools in FY09 and 471 schools and 42 school districts in FY10 had been on academic watch status for over three years by the end of the school year. The Agency had taken some remedial steps during the first three years on academic watch status, but had not taken the action required by statute after three years. Agency personnel stated required actions were not taken due to a lack of resources. (Finding 4, page 16)
We recommended the Agency identify, seek, or reallocate resources to ensure compliance with State law.
Agency management agreed with the finding and stated the mandate is being evaluated with a possibility of seeking a legislative amendment.
INTERNAL AUDITS NOT COMPLETED
The Agency did not audit all major systems of internal accounting and administrative control as required by the Fiscal Control and Internal Auditing Act.
The Agency completed 2 of 11 and 0 of 16 planned audits during fiscal years 2009 and 2010. Agency personnel stated the audits were not completed due to lack of sufficient staffing and significant time required addressing the American Recovery and Reinvestment Act of 2009. (Finding 6, page 18) This finding was first reported in 2006.
We recommended the Agency allocate adequate resources to the Internal Audit Division to ensure audits of major systems are performed biennially as required.
Agency management agreed with the recommendation and stated the agency was in the process of allocating adequate resources to ensure compliance. (For the previous Agency response, see Digest footnote #1.)
The remaining findings are reportedly being given attention by the Agency. We will review the Agency’s progress towards the implementation of our recommendations in our next engagement.
The auditors stated the financial statements of the Illinois State Board of Education were fairly stated in all material respects as of and for the year ended June 30, 2010.
WILLIAM G. HOLLAND
SPECIAL ASSISTANT AUDITORS
Washington, Pittman & McKeever, LLC were our special assistant auditors on this engagement.
#1 INTERNAL AUDITS NOT COMPLETED – Previous Agency Response
During fiscal year 2008, Internal Audit staffing consisted of the Chief Internal Auditor, one Principal Auditor, and one support staff. In accordance with the Fiscal Control and Internal Auditing Act (30 ILCS 10/2003), Internal Audit submitted a two-year plan, identifying audits scheduled for the pending fiscal year  that would allow for audits of major systems of internal accounting and administrative control conducted on a periodic basis so that all major systems are reviewed at least once every 2 years. The 2008 audit plan acknowledges that available staff time was not adequate to perform all audits in the plan.
In addition to Internal Audits, a considerable portion of staff time is spent in the role of audit liaison to the Financial and Compliance auditors, the A-133 auditors, U.S. Department of Education Office of Inspector General auditors, and U.S. Department of Education program offices performing follow-up on Agency findings.
An additional Principal Auditor began working for Internal Audit in October 2008. The addition of this staff member will assist the Agency in meeting the requirements of the Fiscal Control and Internal Auditing Act.