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, 2005

Summary of Findings:

Total this audit                          4

Total last audit                          2

Repeated from last audit           0

Release Date:

March 22, 2006 

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 complete audit report is also available on

the worldwide web at

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

SYNOPSIS

·        The Regional Office of Education #9’s bank reconciliations are not being reviewed. 

·        The Regional Office of Education #9 did not record certain capital asset acquisitions and disposals in the correct accounting period.

·        The Regional Office of Education #9 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region.

·        The Regional Office of Education #9 had accumulated interest on federal fund balances that should have been remitted back to the granting agency.

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

FY 2005

FY 2004

TOTAL REVENUES

$5,901,684

$5,384,106

Local Sources

$1,509,033

$1,698,547

% of Total Revenues

25.57%

31.55%

State Sources

$1,941,239

$1,323,364

% of Total Revenues

32.89%

24.58%

Federal Sources

$2,451,412

$2,362,195

% of Total Revenues

41.54%

43.87%

TOTAL EXPENDITURES

$5,707,962

$5,408,758

Salaries and Benefits

$3,035,970

$3,338,601

% of Total Expenditures

53.19%

61.73%

Purchased Services

$1,744,199

$1,226,749

% of Total Expenditures

30.56%

22.68%

All Other Expenditures

$927,793

$843,408

% of Total Expenditures

16.25%

15.59%

TOTAL NET ASSETS

$1,121,993

$874,734

INVESTMENT IN CAPITAL ASSETS

$235,172

$181,882

   Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Judith Pacey

Currently:  Honorable Judith Pacey

The Regional Office of Education #9’s bank reconciliations are not being reviewed. 

The Regional Office of Education #9 did not record certain capital asset acquisitions and disposals in the correct accounting period.

The Regional Office of Education #9 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region.

The Regional Office of Education #9 did not remit interest accumulated over time on federal fund balances back to the granting agency as required by the Cash Management Improvement Act of 1990.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

INADEQUATE REVIEW OF BANK ACCOUNTS

        The Regional Office of Education #9’s bank reconciliations are not being reviewed to ensure the reconciliation is taking place and that the reconciliation is complete.  Each month’s bank reconciliation should be reviewed by the appropriate level of management. (Finding 05-1, page 12a)

        The Regional Office of Education #9 accepted the recommendation to review bank reconciliations each month after the reconciliation has been completed.

CAPITALIZATION POLICY

        The Regional Office of Education #9 included $8,242 of capital asset purchases in their capital asset listing as of June 30, 2005 when the assets were received and installed in July and August 2005.  In addition, the Regional Office removed $8,973 of capital assets from their capital asset listing as of June 30, 2005 when the assets were not physically removed from the Regional Office’s custody until July 5, 2005, and the Regional Superintendent did not approve the Inventory Disposal Form until July 22, 2005.

        Capital asset acquisitions and disposals should be recorded in the correct accounting period.  (Finding 05-2, page 12b)

        The Regional Office of Education #9 accepted the recommendation to review the capital asset addition and disposal report with the original supporting documentation to ensure the Regional Office recorded capital asset acquisitions and disposals in the correct accounting period.

CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS

        The Illinois School Code (105 ILCS 5/3-14.11) requires the Regional Superintendent to examine at least once each year all books, accounts, and vouchers of every school treasurer in her educational service region, and if she finds any irregularities in them, to report them at once, as directed by the School Code.

        The Regional Office did not examine at least once each year all books, accounts, and vouchers of every school treasurer in the educational service region.  Regional Office officials noted they believe the mandate is outdated and that they are satisfying the intent of the statute by other reviews they undertake.  This mandate has existed in its current form since at least 1953. (Finding 05-3, page 12c)

         The Regional Office accepted the recommendation, noting  it will seek a legislative solution to this and other obsolete passages.  

UNEXPENDED INTEREST INCOME

         The Regional Office of Education #9 had $7,096 of accumulated interest income from federal funds at June 30, 2005 of which $3,238 was carried forward from fiscal year 2004 and $3,858 was earned in fiscal year 2005.

         The Cash Management Improvement Act of 1990 (31 CFR part 205) requires that interest earned on federal fund balances in excess of $100 be remitted back to the federal granting agency. (Finding 05-4, page 13)

         The Regional Office of Education #9 accepted the recommendation to expend up to $100 of the interest income earned from each federally funded program on administrative program expenditures incurred during each program year.  All interest earned on federally funded programs in excess of $100 should be promptly returned to the federal grantor agency.

AUDITORS’ OPINION

        Our auditors state the Regional Office of Education #9’s financial statements as of June 30, 2005 are fairly presented in all material respects.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

        Our special assistant auditors were Kemper CPA Group, LLP.