REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #30

 

JACKSON AND PERRY COUNTIES

 

FINANCIAL AUDIT

 

 

For the Year Ended:

June 30, 2007

 

Summary of Findings:

 

Total this audit                    2

Total last audit                    2

Repeated from last audit     1

 

Release Date:

April 3, 2008

 

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 is also available on

the worldwide web at

http://www.auditor.illinois.gov

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

·        The Regional Office of Education #30 had deficiencies in internal controls over disbursements.

 

·        The Regional Office of Education #3 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

                                                                                   

REGIONAL OFFICE OF EDUCATION #30

JACKSON AND PERRY COUNTIES
 

FINANCIAL AUDIT

For The Year Ended June 30, 2007

 

 

FY 2007

FY 2006

TOTAL REVENUES

$1,240,974

$1,261,348

Local Sources

$277,330

$230,862

% of Total Revenues

22.35%

18.30%

State Sources

$797,833

$767,924

% of Total Revenues

64.29%

60.88%

Federal Sources

$165,811

$262,562

% of Total Revenues

13.36%

20.82%

 

TOTAL EXPENDITURES

$1,195,247

$1,272,198

Salaries and Benefits

$808,529

$806,799

% of Total Expenditures

67.65%

63.42%

Purchased Services

$216,132

$298,866

% of Total Expenditures

18.08%

23.49%

All Other Expenditures

$170,586

$166,533

% of Total Expenditures

14.27%

13.09%

 

 

 

TOTAL NET ASSETS

$557,638

$511,911

 

 

 

INVESTMENT IN CAPITAL ASSETS

 

$95,746

 

$96,152

 

 

              Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Robert Koehn

Currently:  Honorable Robert Koehn
 

 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #30 had deficiencies in internal controls over disbursements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #30 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

INTERNAL CONTROLS OVER DISBURSEMENT PROCESS

 

         The Regional Superintendent of Schools is responsible for establishing and maintaining an internal control system over disbursements and purchases.  In our testing, we noted the following: 

 

·        Six instances where the Regional Office paid sales taxes totaling $89; 

·        One instance where the Regional Office misclassified a travel expense as unemployment insurance; and 

·        Two instances where credit card disbursements did not have all of the related supporting receipts attached and reconciled to the statement.

 

         The auditors recommended that Regional Office of Education #30 implement procedures to ensure that their established internal control procedures are being followed for each disbursement. (Finding 07-1, page 10a)

 

         The Regional Superintendent concurred with this finding.  The Regional Office of Education noted that it has implemented procedures to ensure that staff and vendors are aware of the importance of the tax-exempt status of ROE purchases.  Disbursement and purchasing procedures as relevant to additional components of this finding will be established to address internal control issues.

 

 

Controls Over Financial Statement Preparation

 

         The Regional Office of Education #30 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 #30 does 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.

 

         In their review of the Regional Office’s accounting records, auditors noted that the Regional Office did not have adequate controls over the maintenance of complete records of accounts receivable, accounts payable, or deferred revenues.  While the Regional Office did maintain records to indicate the balances of accounts payable, accounts receivable, and deferred revenues, there were no entries made by the ROE to reconcile their grant activity, such as posting grant receivables and deferred revenues.  The Regional Office’s financial information required numerous adjusting entries to present the financial statements in accordance with generally accepted accounting principles.

 

         The auditors recommended that, as part of its internal control over the preparation of its financial statements, including disclosures, the Regional Office of Education #30 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. (Finding 07-2, pages 10b-10c)

 

         The Regional Office of Education #30 responded that it understands the nature of this finding and realizes that this circumstance is not unusual in an organization of this size.  The Regional Office accepts the degree of risk associated with this condition because the added expense of seeking additional accounting expertise to prepare and/or review financial statements would take away from the funds available to provide educational services for the schools in the region.

 

 

AUDITORS’ OPINION

 

        Our auditors state the Regional Office of Education #30’s financial statements as of June 30, 2007 are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:KJM

 

 

SPECIAL ASSISTANT AUDITORS

 

        Our special assistant auditors were Kemper CPA Group, LLP.