REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #35

 

LASALLE COUNTY

 

FINANCIAL AUDIT

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

 

For the Year Ended:

June 30, 2005

 

Summary of Findings:

 

Total this audit                          3

Total last audit                          1

Repeated from last audit           0

 

Release Date:

June 29, 2006

 

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.state.il.us/auditor

 

 

 

 

 

SYNOPSIS

 

 

·         The Regional Office of Education #35 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region.

 

·         The Regional Office of Education #35 utilized the same individual to prepare bank reconciliations and perform disbursement functions.

 

·         The Regional Office of Education #35 had inadequate controls over cash disbursements. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


 

 

                                                                                   

REGIONAL OFFICE OF EDUCATION #35

LASALLE COUNTY

 

FINANCIAL AUDIT

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

For The Year Ended June 30, 2005

 

 

 

 

FY 2005

FY 2004

TOTAL REVENUES

$2,080,169

$1,816,828

Local Sources

$626,612

$379,128

% of Total Revenues

30.12%

20.87%

State Sources

$1,080,117

$631,523

% of Total Revenues

51.92%

34.76%

Federal Sources

$373,440

$806,177

% of Total Revenues

17.95%

44.37%

 

TOTAL EXPENDITURES

$2,100,717

$1,865,255

Salaries and Benefits

$1,198,465

$1,180,967

% of Total Expenditures

57.05%

63.31%

Purchased Services

$620,953

$418,864

% of Total Expenditures

29.56%

22.46%

All Other Expenditures

$281,299

$265,424

% of Total Expenditures

13.39%

14.23%

 

 

 

TOTAL NET ASSETS

$1,521,951

$1,542,499

 

 

 

INVESTMENT IN CAPITAL ASSETS

 

$9,419

 

$12,132

 

              Percentages may not add due to rounding.

 

 

REGIONAL SUPERINTENDENT  

During Audit Period:  Honorable William Novotney

Currently:  Honorable William Novotney

 

 

 


 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #35 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #35 utilized the same individual to prepare bank reconciliations and perform disbursement functions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #35 had inadequate controls over cash disbursements. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS

 

       The Illinois School Code (105 ILCS 5/3-14.11) requires the Regional Superintendent to examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region, and if he finds any irregularities in them, to report them at once, as directed by the School Code.

 

      The Regional Office did not examine at least once each year all books, accounts, and vouchers of every school treasurer in the educational service region.  Regional Office officials noted they believe the mandate is outdated and that they are satisfying the intent of the statute by other reviews they undertake.  This mandate has existed in its current form since at least 1953. (Finding 05-1, pages 12-13)

 

The Regional Office accepted the recommendation, noting it will seek a legislative solution to this and other obsolete passages.   

 

 

BANK RECONCILIATIONS NOT COMPLETED PROPERLY

 

The Regional Office of Education #35 utilized the same individual to prepare bank reconciliations who also performed cash receipt and disbursement functions for the distributive and payroll bank accounts.  Bank reconciliations also did not indicate evidence of review and approval by a person independent of the preparer.   Total outstanding checks in the bank reconciliations for two bank accounts did not agree with the total of details of the outstanding checks and resulted in an unaccounted for difference of $597.  The Regional Office of Education #35 also did not record, as of June 30, 2005, interest income from two certificates of deposit, which totaled $413.  (Finding 05-2, pages 14-15)

 

Sound internal controls require bank reconciliations to be performed accurately and promptly.  Reconciling items should be investigated immediately and adjustments made to the general ledger.   Bank reconciliations should also be reviewed and approved by a person independent of the preparer.

 

The Regional Office of Education #35 agreed with the auditor’s recommendation noting that it will prepare its monthly bank reconciliations and dispose of reconciling items on a timely basis.  In addition, the bank reconciliations will be reviewed by another individual.

 

 

INADEQUATE CONTROLS OVER CASH DISBURSEMENTS

 

The Regional Office of Education #35 had inadequate controls over cash disbursements.  During testing of disbursements and expenditures, it was noted that consulting fees amounting to $1,488 were charged as travel expenses instead of professional services.  The Regional Office of Education #35 also had expense reimbursements totaling $5,405 that were submitted one to nine months from the dates incurred.  In addition, the reimbursements included sales taxes of $123.  (Finding 05-3, pages 16-17)

 

Sound internal control requires that reimbursements are timely, properly approved and properly recorded to the appropriate account.  Prudent business practice dictates that reimbursements should be reviewed by management in a timely manner to enhance the quality of the review.

 

The Regional Office of Education #35 agreed with the auditor’s recommendation noting that it will strengthen its controls over these procedures. The Regional Office has also initiated a policy that sales tax will not be reimbursed over one dollar.

 

 

 

 

AUDITORS’ OPINION

 

       Our auditors state the Regional Office of Education #35’s financial statements as of June 30, 2005 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.