REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION # 34

 

LAKE COUNTY

 

FINANCIAL AND COMPLIANCE AUDIT

(In Accordance with the Single Audit Act and OMB Circular A-133)

For the Year Ended:

June 30, 2003

 

Summary of Findings:

 

Total this audit                         3

Total last audit                         1

Repeated from last audit          0

 

Release Date:

March 18, 2004

 

 

 

 

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 TDD (217) 524-4646

 

This Report Digest is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

SYNOPSIS

  • Review of bank reconciliation statements identified outstanding checks totaling $9,990.79 that date back from 3/28/96 through 11/11/02.
  • The Lake County Regional Office of Education #34 did not have adequate controls over fixed assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

               REGIONAL OFFICE OF EDUCATION # 34

                                       LAKE COUNTY

 

                 FINANCIAL AND COMPLIANCE AUDIT

(In Accordance with the Single Audit Act and OMB Circular A-133)

                      For The Year Ended June 30, 2003

 

FY 2003

FY 2002

TOTAL REVENUES

$5,480,785

1$5,409,476

Local Sources

$1,194,289

$1,394,043

% of Total Revenues

21.79%

25.77%

State Sources

$3,310,234

1$4,007,567

% of Total Revenues

60.40%

74.08%

Federal Sources

$976,262

$7,866

% of Total Revenues

17.81%

.15%

 

TOTAL EXPENDITURES

$5,253,542

1$5,338,937

Salaries and Benefits

$2,423,451

1$3,017,031

% of Total Expenditures

46.13%

56.51%

Purchased Services

$967,674

$811,849

% of Total Expenditures

18.42%

15.21%

All Other Expenditures

$1,862,417

$1,510,057

% of Total Expenditures

35.45%

28.28%

 

 

 

COST OF PROPERTY AND EQUIPMENT

$609,726

$798,715

 

* Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT

During Audit Period: Honorable Edward Gonwa

Currently: Honorable Roycealee Wood

 

 

 

 

 

 

Review of bank reconciliation statements identified outstanding checks totaling $9,990.79 that date back from 3/28/96 through 11/11/02.

 

 

 

 

 

 

 

 

 

 

The Lake County Regional Office of Education #34 did not have adequate controls over fixed assets.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

INADEQUATE REVIEW OF LONG OUTSTANDING CHECKS

Review of bank reconciliation statements identified outstanding checks totaling $9,990.79 that date back from 3/28/96 through 11/11/02. Two checks totaling $6,243.59 had actually been reissued and should have been voided. The other outstanding checks were determined to be not yet cashed by the payee.

Sound internal controls on cash require checks outstanding for a considerable amount of time to be periodically investigated. If necessary, payment should be stopped and an entry should be made to restore such items to cash. (Finding 03-1, page 12)

The Regional Office of Education #34 accepted the auditorís recommendation and will conduct a monthly review of long outstanding checks and determine the disposition thereof. The Regional Office stated the payee will be notified that if the check is not cashed immediately, it will be canceled and a new request will have to be submitted in order to have the check reissued at a later date.

 

INADEQUATE CONTROLS OVER PROPERTY AND EQUIPMENT

The Lake County Regional Office of Education #34 did not have adequate controls over fixed assets. For example, there were no formal policies or procedures to monitor and control equipment and other fixed assets. The inventory list did not have complete information as to acquisition date, acquisition source document (check number), and purchase cost for some items. Transfers of equipment from one location to another were not formally documented. The balances in the General Fixed Asset Account Group were not recorded in the general ledger. Finally, the detailed fixed asset listings were not reconciled with the balances reported in the General Fixed Asset Account Group.

The ROE Accounting Manual requires each ROE to maintain detailed fixed asset records for both accounting purposes as well as insurance purposes, for fixed assets costing $500 or more. In addition, sound internal controls require that policies and procedures on fixed assets cover the acquisition and tagging, recording and reporting, depreciation (if applicable), transfers and dispositions, and physical inventory, and that they be formally documented and consistently applied. (Finding 03-2, pages 13-15)

The Regional Office of Education #34 accepted the auditorís recommendation and will develop fixed asset policies and procedures to be added to the existing internal control policy manual.

 

OTHER FINDING

The remaining finding is less significant. We will review progress toward the implementation of our recommendations during the next audit.

 

AUDITORSí OPINION

Our auditors state the Regional Office of Education #34ís financial statements as of June 30, 2003 are fairly presented in all material respects.

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JRB

 

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were E.C. Ortiz & Co., LLP.