REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #16:
DEKALB COUNTY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  April 19, 2023

FINDINGS THIS AUDIT: 2

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  1 -- 0 -- 1
Category 2:  1 -- 0 -- 1
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 0 -- 2

FINDINGS LAST AUDIT: 0

Category 1: Findings that are material
weaknesses in internal control and/or
a qualification on compliance with
State laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, 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

• (22-1) The Regional Office of
Education #16 did not have sufficient
internal controls over the financial
reporting process.

• (22-2) The Regional Office of
Education #16 did not have adequate
internal control over receipts.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #16
(ROE) did not have sufficient internal
controls over the financial reporting
process. The financial statements
required material audit adjustments in
order to ensure the balances were
accurate for the basis of accounting
selected for financial statement
presentation.

The School Code (105 ILCS 5/2-3.17a)
allows a Regional Office of Education
or Educational Service Center to
utilize a cash basis, modified cash
basis, or generally accepted
accounting principles (GAAP) basis of
accounting to prepare financial
statements for audit. The ROE has
chosen to utilize the cash basis of
accounting for financial statement
reporting. The ROE is required to
maintain a system of controls over the
preparation of financial statements in
accordance with its selected basis of
accounting. The ROE’s internal
controls over financial reporting
should include adequately trained
personnel with the knowledge, skills,
and experience to prepare financial
statements and include all related
disclosures as required by the
Governmental Accounting Standards
Board (GASB).

The financial statements submitted for
audit reported receipts and
disbursements totaling $36,181 of a
separate legal entity in its Education
Fund when they should have been
reported in the Fiduciary Fund
financial statements. Accordingly, the
program receipts and disbursements
reported in the Statement of
Activities were overstated by $36,181.

The ROE subsequently revised its
financial statements to adjust for the
misstatements.

Regional Office officials indicated
this was an oversight. (Finding
22-001, pages 11 – 12)

The auditors recommended that as part
of internal control over the
preparation of financial statements,
the ROE should implement comprehensive
preparation procedures to ensure the
financial statements and disclosures
are complete and accurate. These
procedures should be performed by a
properly trained individual(s)
possessing a thorough understanding of
the basis of accounting selected for
financial statements, GASB
pronouncements, and knowledge of the
ROE’s activities and operations.

ROE Response: The ROE will review
financial statements to ensure
balances are accurate for the basis of
accounting selected for financial
statement presentation.

INADEQUATE INTERNAL CONTROL OVER
RECEIPTS

The Regional Office of Education #16
(ROE) did not have adequate internal
control over receipts. Auditors noted
11 of 40 receipts tested (28%),
totaling $111,713, had no
documentation of when checks were
received. As a result, auditors were
unable to determine if cash was
deposited in a timely manner.

Sound internal controls require a
policy on timeliness of deposits,
either based on a dollar threshold or
defined timeframe, from the date of
receipt.

Regional Office officials indicated
deposits were delayed due to competing
priorities. (Finding 22-002, page 13)

The auditors recommended the ROE
should implement controls and maintain
adequate supporting documentation to
ensure cash receipts are deposited in
a timely manner.

ROE Response: The ROE will ensure
deposits are done timely, at least
once a week, per policy.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #16’s financial
statements as of June 30, 2022 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of Adelfia LLC.

JOE BUTCHER
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:BAO