REPORT DIGEST REGIONAL OFFICE OF EDUCATION #20 EDWARDS, GALLATIN, HAMILTON, HARDIN, POPE, SALINE, WABASH, WAYNE AND WHITE COUNTIES FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2019 Release Date: May 27, 2020 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 0 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 FINDINGS LAST AUDIT: 2 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 SYNOPSIS • (19-1) The Regional Office of Education #20 did not have sufficient internal controls over the collateral of deposits. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INSUFFICENT COLLATERAL ON DEPOSITS The Regional Office of Education #20 (ROE) did not have sufficient internal controls over the collateral of deposits. As of June 30, 2019, cash balances held with various banks exceeded Federal Deposit Insurance Corporation (FDIC) coverage and pledged collateral by $21,272. The Public Funds Deposit Act (30 ILCS 225/1) gives the authorization for deposits in excess of the federally insured limit to be covered by pledged collateral held by the financial institutions’ trust departments in the ROE’s name. In addition, prudent business practice requires that all cash and investments held by financial institutions for the ROE be adequately covered by depository insurance or collateral. Regional Office management indicated they did not consistently monitor the level of collateral to determine it was at a sufficient amount. (Finding 19-001, page 10a) The auditors recommended the ROE should periodically monitor cash balances, FDIC coverage, and pledged collateral to determine all cash balances are secured, especially around times when large deposits are being received. Additionally, the ROE should work with its financial institutions to provide sufficient collateral or enter into agreements with its financial institutions to have the cash balances monitored for adequate collateral periodically and adjusted as necessary. ROE Response: The ROE agrees with the recommendation. AUDITORS’ OPINION Our auditors state the Regional Office of Education #20’s financial statements as of June 30, 2019 are fairly presented in all material respects. This financial audit was conducted by the firm of Doehring, Winders & Co. LLP. 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:JRB