REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #16

 

DEKALB COUNTY

 

FINANCIAL AUDIT

 

For the Year Ended:

June 30, 2008

 

Summary of Findings:

 

Total this audit                       2

Total last audit                       1

Repeated from last audit        1

 

Release Date:

July 23, 2009

 

 

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

http://www.auditor.illinois.gov

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

·         The Regional Office of Education #16 did not have sufficient internal controls over the financial reporting process.

 

·         The Regional Office of Education #16 did not report expenditures properly for the Alternative Education Program. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

REGIONAL OFFICE OF EDUCATION #16

DEKALB COUNTY

 

 

FINANCIAL AUDIT

For The Year Ended June 30, 2008

 

 

 

FY 2008

FY 2007

TOTAL REVENUES

$945,770

$876,366

Local Sources

$146,796

$105,424

% of Total Revenues

15.52%

12.03%

State Sources

$782,974

$753,587

% of Total Revenues

82.79%

85.99%

Federal Sources

$16,000

$17,355

% of Total Revenues

1.69%

1.98%

 

TOTAL EXPENDITURES

$930,155

$878,638

Salaries and Benefits

$390,454

$231,804

% of Total Expenditures

41.98%

26.38%

Purchased Services

$365,556

$476,964

% of Total Expenditures

39.30%

54.28%

All Other Expenditures

$174,145

$169,870

% of Total Expenditures

18.72%

19.33%

 

TOTAL NET ASSETS

$103,524

$87,909

 

INVESTMENT IN CAPITAL ASSETS

$0 1

$0 1

 

1  Capital assets of the Regional Office were purchased using the governmental resources of the County.

   Percentages may not add due to rounding.

 

 

REGIONAL SUPERINTENDENT

During Audit Period:  Honorable Gilbert E. Morrison, Jr.

Currently:  Honorable Gilbert E. Morrison, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #16 did not have sufficient internal controls over the financial reporting process.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #16 did not report expenditures properly for the Alternative Education Program. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

Controls Over Financial Statement Preparation

 

         The Regional Office of Education #16 is required to maintain a system of controls over the preparation of financial statements in accordance with generally accepted accounting principles  (GAAP).  Regional Office internal controls over GAAP financial reporting should include adequately trained personnel with the knowledge and expertise to prepare and/or thoroughly review GAAP based financial statements to ensure that they are free of material misstatements and include all disclosures as required by the Governmental Accounting Standards Board (GASB).

 

         The Regional Office of Education #16 did not have sufficient internal controls over the financial reporting process.  The Regional Office maintains their accounting records on the cash basis of accounting.  While the Regional Office maintains controls over the processing of most accounting transactions, there are not sufficient controls over the preparation of the GAAP based financial statements for management or employees in the normal course of performing their assigned functions to prevent or detect financial statement misstatements and disclosure omissions in a timely manner.  For example, auditors, in their review of the Regional Office’s accounting records, noted the following:

 

  • The Regional Office did not maintain adequate internal controls over the processing of all financial transactions and numerous adjustments were required to present financial statements in accordance with generally accepted accounting principles.  Because of this condition, the Regional Office did not have the ability to prepare accrual-basis financial reports.

 

  • The Regional Office did not have adequate controls over the maintenance of complete records of accounts receivable and accounts payable.

 

 

         According to Regional Office officials, they did not have adequate funding to hire and/or train their accounting personnel in order to comply with these requirements.  (Finding 08-1, pages 9-10)

 

         The auditors recommended that, as part of its internal control over the preparation of its financial statements, including disclosures, the Regional Office of Education #16 should implement a comprehensive preparation and/or review procedure to ensure that the financial statements, including disclosures, are complete and accurate.  Such procedures should be performed by a properly trained individual(s) possessing a thorough understanding of applicable generally accepted accounting principles, GASB pronouncements, and knowledge of the Regional Office of Education’s activities and operations.

 

         The Regional Office of Education #16 responded that it has engaged an accounting firm to prepare a program that allows for internal preparation and review of financial statements.  These procedures must be performed internally because the added expense of hiring properly trained individuals is cost prohibitive for a small entity such as the ROE.  The Regional Office noted that funding for ROE services is extremely tight, and paying for a service such as noted would take away from the funds available to provide educational services for schools in the region.  The Regional Office noted that it will continue to do the best it can with limited resources available.

 

 

INACCURATE EXPENDITURE REPORT

 

         The Regional Office of Education #16 did not report expenditures properly for the Alternative Education Program.  Amounts submitted on grant expenditure reports to the Illinois State Board of Education should be in agreement with the general ledger.

 

         The amounts reported for salaries and benefits were understated on the expenditure report by $2,424.  The amount reported for supplies was understated by $16 while the purchased services were overstated by $2,440.  In total, the level of expenditures reported agreed to the general ledger.

         The expenditure report that was submitted did not accurately reflect the activity of the period.  This condition exists because the Regional Office of Education #16 had insufficient expenditure report review procedures established.  (Finding 08-2, page 11)

 

         The auditors recommended that the Regional Office of Education #16 management should review expenditure reports and their supporting documentation to ensure they are properly classified and reported. 

 

         The Regional Office of Education #16 responded that it will review expenditure reports and their supporting documents more closely to ensure that they are properly classified and reported.  The Regional Office reported that the budget for the program in question was amended and accepted by ISBE on May 30, 2008, and reflects the items in question.

 

 

AUDITORS’ OPINION

 

         Our auditors state the Regional Office of Education #16’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.