REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #9

 

CHAMPAIGN AND FORD COUNTIES

 

FINANCIAL AUDIT

(In Accordance with the
Single Audit Act and OMB Circular A-133)

 

For the Year Ended:

June 30, 2004

 

Summary of Findings:

 

Total this audit†††††††††††††             2

Total last audit† †††††††††††             4

Repeated from last audit†††††††††† 1

 

Release Date:

March 16, 2005

 

 

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

 

 

SYNOPSIS

 

        The Regional Office of Education #9ís expenditure reports to the Illinois State Board of Education (ISBE) reported estimated expenditures as obligated funds even though the related services or goods had not been received, ordered, or otherwise obligated as defined in ISBEís State and Federal Grant Administration Policy and Fiscal Requirements and Procedures.

 

        The Regional Office of Education#9 had excessive working capital within its internal service fund at June 30, 2004.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

††††††† {Expenditures and Revenues are summarized on the reverse page.}

 


†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††

REGIONAL OFFICE OF EDUCATION #9

CHAMPAIGN AND FORD COUNTIES

 

 

FINANCIAL AUDIT

(In Accordance with the Single Audit Act and OMB Circular A-133
For The Year Ended June 30, 2004)

 

 

FY 2004

FY 2003

TOTAL REVENUES

$5,384,106

$6,144,250

Local Sources

$1,698,547

$1,596,717

% of Total Revenues

31.55%

25.99%

State Sources

$1,323,364

$3,001,112

% of Total Revenues

24.58%

48.84%

Federal Sources

$2,362,195

$1,546,421

% of Total Revenues

43.87%

25.17%

 

TOTAL EXPENDITURES

$5,408,758

$6,097,295

Salaries and Benefits

$3,338,601

$3,799,206

% of Total Expenditures

61.73%

62.31%

Purchased Services

$1,226,749

$1,534,137

% of Total Expenditures

22.68%

25.16%

All Other Expenditures

$843,408

$763,952

% of Total Expenditures

15.59%

12.53%

 

 

 

TOTAL NET ASSETS1

$875,684

$884,971

 

 

 

INVESTMENT IN CAPITAL ASSETS1

 

$181,882

 

$167,233

 

1         In fiscal year 2004, Regional Offices of Education implemented Government Accounting Standards Board (GASB) Statement No. 34 which established a new financial reporting model for state and local governments.Government-wide financial statements are prepared using full accrual accounting that reports Total Net Assets.††† The fiscal year 2003 ending general fixed assets have been restated to reflect the changes required as part of the implementation of GASB Statement No. 34.

††††††††††††† Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT

During Audit Period:Honorable Judith Pacey

Currently:Honorable Judith Pacey


 

 

 

 

 

 

 

 


The Regional Office of Education #9ís expenditure reports to the Illinois State Board of Education (ISBE) reported estimated expenditures as obligated funds even though the related services or goods had not been received, ordered, or otherwise obligated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education#9 had excessive working capital within its internal service fund at June 30, 2004.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

STATE EXPENDITURE REPORTS AND CASH MANAGEMENT

 

††††††† The Regional Office of Education #9ís expenditure reports to the Illinois State Board of Education (ISBE) reported estimated expenditures as obligated funds even though the related services or goods had not been received, ordered, or otherwise obligated as defined in ISBEís State and Federal Grant Administration Policy and Fiscal Requirements and Procedures.The Regional Office indicated this method of expenditure reporting prevented cash shortfalls due to slow reimbursements from the State.

 

††††††† Generally Accepted Accounting Principles require that expenditures be reported when either the funds have been obligated or the disbursement has been made.The Illinois State Board of Educationís State and Federal Grant Administration Policy and Fiscal Requirements and Procedures provides guidance on what constitutes a valid obligation. (Finding 04-1, page 12a)This finding was first reported in our Fiscal Year 2002 audit.

 

††††††† The Regional Office of Education #9 disagreed with the recommendation to report only liabilities actually incurred but not paid as obligated funds on Illinois State Board of Education expenditure reports.†† The Regional Office stated it will continue to use the estimated method until funding from the State is prompt for all programs.(For previous Regional Office response, see Digest Footnote #1.)††

 

 
WORKING CASH IN INTERNAL SERVICE FUND

††††††

††††††† Cash on hand in the administrative internal service fund at June 30, 2004, totaled $63,767 representing approximately 190 days of average expenses.In comparison, at June 30, 2003, the internal service fundís working cash totaled $13,670 representing 37 days of average expenses.

 

††††††† The Regional Office anticipated a substantial reduction in grant funding for the year.Consequently, the Regional Office reduced planned expenses from the internal service fund and increased the rate each program paid into the fund by one-half of one percent of revenues.When the shortfall in grant funding was not realized, a significant increase in working cash resulted.During the year-ended June 30, 2004, programs paid approximately $50,097 more than actual, allowable administrative expenses.Expenditure reports for two programs that will not continue in 2004-2005 were overstated by 30%.(Finding 04-2, page 12b)

 

††††††† The Regional Office of Education #9 accepted the recommendation to amend the expenditure reports for the two programs that paid expenses during 2003-2004 that will not continue in 2004-2005.Those programsí expenditure reports will be amended to reflect the approximately 30% reduction in administrative expenses and any excess paid to the administrative internal service fund will be refunded to ISBE.The administrative expenses charged to the other continuing programs for 2004-2005 will be reduced by the estimated overcharge for 2003-2004.

 

 

AUDITORSí OPINION

 

††††† Our auditors state the Regional Office of Education #9ís financial statements as of June 30, 2004 are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:KJM:ro

 

 

 

 

SPECIAL ASSISTANT AUDITORS

 

††††††† Our special assistant auditors were Kemper CPA Group, LLP.

 
 

 

 
DIGEST FOOTNOTES

 

#1: STATE EXPENDITURE REPORTS AND CASH MANAGEMENT Ė Previous Regional Office Response

 

In its prior response in 2003, the Regional Office disagreed with the finding.The Regional Office stated they completed expenditure reports using the stated formula at the suggestion of the Illinois State Board of Education and would continue to use the formula until funding from the State was prompt for all programs.

 

Complete Regional Office responses to prior findings are available upon request from the Auditor Generalís Office.