|
REPORT DIGEST REGIONAL OFFICE OF EDUCATION #8 CARROLL, JO DAVIESS, AND FINANCIAL AUDIT (In Accordance with the Single Audit Act and
OMB Circular A-133) For the Year Ended: June 30, 2008 Summary of Findings: Total this audit 2 Total last audit 2 Repeated from last audit 0 Relea June 25, 200
State of
Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL To obtain a copy of the
Report contact: Office of the Auditor
General (217) 782-6046 or TTY (888)
261-2887 This Report Digest and
complete report is also available on the worldwide web at www.auditor.illinois.gov
|
|
SYNOPSIS
{Expenditures and Revenues are summarized on the reverse page.} |
REGIONAL OFFICE OF EDUCATION #8
FINANCIAL AUDIT
For The Year Ended June 30, 2008
|
|
FY 2008
|
FY 2007
|
TOTAL REVENUES |
$4,199,719 |
$3,863,126 |
|
Local Sources |
$786,905 |
$734,562 |
|
% of Total Revenues |
18.74% |
19.01% |
|
State Sources |
$2,841,422 |
$2,482,085 |
|
% of Total Revenues |
67.66% |
64.25% |
|
Federal Sources |
$571,392 |
$646,479 |
|
% of Total Revenues |
13.61% |
16.73% |
|
|
||
|
TOTAL EXPENDITURES |
$4,218,161 |
$3,898,924 |
|
Salaries and Benefits |
$1,800,215 |
$1,655,940 |
|
% of Total Expenditures |
42.68% |
42.47% |
|
Purchased Services |
$1,335,874 |
$1,300,772 |
|
% of Total Expenditures |
31.67% |
33.36% |
|
All Other Expenditures |
$1,082,072 |
$942,212 |
|
% of Total Expenditures |
25.65% |
24.17% |
|
|
||
|
TOTAL NET ASSETS |
$121,222 |
$139,664 |
|
|
||
|
INVESTMENT IN
CAPITAL ASSETS |
$8,354 |
$14,416 |
|
Percentages
may not add due to rounding. |
||
|
REGIONAL
SUPERINTENDENT |
|
During Audit Period: Honorable Marie Stiefel Currently: Honorable Marie Stiefel |
|
The Regional Office of Education #8 did not
follow applicable cash management compliance requirements for the Title II –
Teacher Quality grant and expended funds that were due back to the granting
agency.
The Regional Office of Education #8 did not allocate funding for private
school expenditures based on current student enrollment in accordance with
compliance requirements for the Title II – Teacher Quality grant program.
|
FINDINGS, CONCLUSIONS AND RECOMMENDATIONSINADEQUATE
CONTROLS OVER CASH MANAGEMENT
The Regional Office of Education #8
did not follow applicable cash management compliance requirements for the
Title II – Teacher Quality grant and expended funds that were due back to the
granting agency. The Regional Office of Education (ROE) Accounting Manual states that
if dollars from two or more sources of funds are combined in one bank account
and/or fund the ROE must allocate, on a reasonable basis, a portion of the
interest earned on that bank account or fund to each of those sources of
funds. The allocation should be done
no less than monthly when bank statements are received. Once the interest is allocated to the
appropriate source of funds, certain rules apply to the expenditure of that interest. The ROE
Accounting Manual states that the rules for allocating and expending
interest vary depending on the source of funds that generated the
interest. Unless the grant agreement specifically
addresses the interest issue and provides otherwise, the following rules
would apply:
·
The
Grant Funds Recovery Act (30 ILCS 705/1 et
seq.) states that the interest earned on grant funds becomes part of the
grant principal and is treated accordingly for all purposes unless the grant
agreement and/or the grant regulations provides otherwise. The Act further states that any grant funds
not expended (or legally obligated) by the end of the grant period must be
returned to the grantor. This applies
to State and federal grants.
·
Generally,
federal rules supersede those of the State (for federal grants only). If a federal rule allows different
treatment of interest, then the federal rule would be followed.
·
Federal
cash management requirements state that grantees and subgrantees shall
minimize the time elapsed between the receipt of funds and the expenditure of
those funds. The accumulation of
interest would indicate excess cash on hand.
·
U.S.
Department of Education regulations appear in 34 Code of Federal Regulations
(CFR). Part 80 of 34 CFR is titled: “Uniform Administrative Requirements for
Grants and Cooperative Agreements to State and Local Governments.” It is also known as the “Common Rule”
because most federal agencies have adopted it in their regulations. The “Common Rule” states that annual
interest earned in excess of $100 on advances of funds must be submitted
promptly to the granting agency. The
$100 may be spent on administrative costs.
Those administrative costs must be for that grant and within the grant
period. Some grants may be exempt from
the “Common Rule.” The Regional Office of Education
earned approximately $515 in interest on Title II – Teacher Quality
advancements and did not remit amounts in excess of $100 to the granting
agency on at least a quarterly basis.
This amount was calculated by using a method that calculated interest
earned on a monthly basis. (Finding
08-1, pages 13-14) The auditors recommended that the
Regional Office of Education #8 should monitor interest earned on federal
advances. Any interest amounts in
excess of $100 should be remitted on at least a quarterly basis to the
appropriate granting agency as required by rules, regulations, or statutes. The Regional Office of Education #8
responded that in the past, the Regional Office submitted a joint proposal on
behalf of eleven school districts for their Title II funds. In the interest of being good stewards of
tax dollars, the ROE required districts to submit invoices documenting their
expenditures prior to reimbursement.
Unfortunately, when the ROE did not receive documentation in a timely
manner, this resulted in holding the funds longer than anticipated resulting
in the excess accumulation of interest.
IMPROPER
ALLOCATION OF FUNDS TO PRIVATE SCHOOLS
The Regional Office of Education #8 did not allocate funding for private school expenditures based on current student enrollment in accordance with compliance requirements for the Title II – Teacher Quality grant program. The Regional Office allocated funding using rates that were developed in the past. As required by Section 299.7 of 34 CFR, the Regional Office of Education must ensure that private schools receive funding for expenditures on a current per-pupil basis, taking into consideration their numbers and needs. The private schools received inappropriate
allotments of federal funds for expenditures.
Two of the schools combined to receive $1,119 more than the proper
amount while one school received $1,119 less than the correct amount.
(Finding 08-2, pages 15-16) The
auditors recommended that the Regional Office of Education #8 should allocate
federal funds to private schools based on a current per-pupil basis, taking
into consideration their numbers and needs as required by Section 299.7 of 34
CFR. The Regional Office of Education #8 responded that it did attempt to properly allocate funding to the private schools. Unfortunately, the Regional Superintendent did not realize that the calculation was supposed to change each year. By the time the Title audit was completed, money had already been paid out, and it was too late to correct the error.
AUDITORS’ OPINION Our auditors state the Regional Office of Education #8’s financial statements as of June 30, 2008 are fairly presented in all material respects. ___________________________________ WILLIAM
G. HOLLAND, Auditor General WGH:KJM SPECIAL ASSISTANT AUDITORS Our special assistant
auditors were Clifton Gunderson, LLP. |
|
|
|