REPORT DIGEST

ILLINOIS STATE BOARD OF EDUCATION

FINANCIAL AUDIT
For the Year Ended: June 30, 2012


Release Date:   February 21, 2013

Summary of Findings:
Total this audit: 1
Total last audit:  1
Repeated from last audit: 1

State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, Iles Park Plaza, 740 E.
Ash Street, Springfield, IL 62703
(217) 	782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also available on
the worldwide web at www.auditor.illinois.gov

INTRODUCTION

This report contains only findings pertaining to the
Financial Statement Audit of the Illinois State Board of
Education (Board) for the year ended June 30, 2012.

The State Compliance Examination for the two years ended
June 30, 2012 will be issued at a later date.

SYNOPSIS

• The Board did not identify or prevent misstatements in
financial reporting.

FINDING, CONCLUSION, AND RECOMMENDATION

NEED TO IMPROVE FINANCIAL REPORTING

The Illinois State Board of Education (Board) did not
identify or prevent misstatements in the accounting
information reported to the Office of the State
Comptroller and in the Board’s draft financial
statements.

• The Board overstated fiscal year 2012 expenditures and
liabilities an estimated $4,706,739 due to fiscal year
2013 expenditures charged to fiscal year 2012 in error.

• A reorganization incentive liability totaling
$7,560,607 was not properly reported in the Board’s
financial statements. (Finding 1, Pages 39-41)

We recommended the Board review its current process for
preparation and review of the annual financial
statements to ensure that financial information is
complete and accurate. We also recommended the Board
establish procedures to determine the proper reporting
period for subrecipient expenditures.

Board management agreed with the finding.  Management
stated they will modify the expenditure reporting system
and ensure proper reporting of the reorganization
incentive liability in the future.

AUDITOR’S OPINION

Our special assistant auditors stated that the Board’s
financial statements of the governmental activities, the
major fund, and the aggregate remaining fund
information, as of and for the year ended June 30, 2012,
are fairly stated in all material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:LKW:rt

AUDITORS ASSIGNED

Our special assistant auditor for this engagement was
E.C. Ortiz & Co., LLP.