REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #21: FRANKLIN AND
WILLIAMSON COUNTIES

FINANCIAL AUDIT
For the Year Ended: June 30, 2012



Release Date:   April 4, 2013


Summary of Findings:
Total this audit: 1
Total last audit:  1
Repeated from last audit: 1

State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL

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SYNOPSIS

• The Regional Office of Education #21 did not have
sufficient internal controls over the financial
reporting process.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT PREPARATION

The Regional Office of Education #21 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 #21 did not have
sufficient internal controls over the financial
reporting process.  The Regional Office maintains their
accounting records on the cash basis of accounting
during the fiscal year and posts year end accrual
entries for audit purposes.  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 adjustments were required to
present financial statements in accordance with
generally accepted accounting principles.

According to ROE officials, with the wide range of
accounting issues the Office deals with, accounting
personnel had not obtained necessary training to become
proficient in the preparation and review of GAAP based
financial statements and to ensure inclusion of all
disclosures as required by the Governmental Accounting
Standards Board (GASB). (Finding 12-01 pages 10a-10b)
This finding was first reported in 2007.

The auditors recommended that, as part of its internal
control over the preparation of financial statements,
including disclosures, the Regional Office of Education
#21 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 an
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 #21 responded that in
its continuous effort to maintain controls over
financial statement preparation, the ROE will follow its
hiring of qualified personnel with the pursuit of
continued training opportunities to improve its skills
and efforts in meeting the requirements. (For previous
Regional Office response, see Digest Footnote #1.)

AUDITORS’ OPINION

Our auditors state the Regional Office of Education
#21’s financial statements as of June 30, 2012 are
fairly stated in all material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:KJM

AUDITORS ASSIGNED:  Kemper CPA Group LLP were our
special assistant auditors.

DIGEST FOOTNOTE

#1:  CONTROLS OVER FINANCIAL STATEMENT PREPARATION –
Previous Regional Office Response

In its prior response in 2011, the Regional Office of
Education #21 responded that in its continuous effort to
maintain controls over financial statement preparation,
the ROE will follow its hiring of qualified personnel
with the pursuit of continued training opportunities to
improve its skills and efforts in meeting the
requirements.