REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #40

 

CALHOUN/GREENE/ JERSEY/MACOUPIN COUNTIES

 

FINANCIAL AUDIT

 

For the Year Ended:

June 30, 2008

 

Summary of Findings:

 

Total this audit                       1

Total last audit                       4

Repeated from last audit        1

 

Release Date:

August 27, 2009

 

 

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 #40 does not have sufficient internal controls over the financial reporting process. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

REGIONAL OFFICE OF EDUCATION #40

CALHOUN/GREENE/JERSEY/MACOUPIN COUNTIES

 

 

FINANCIAL AUDIT

For The Year Ended June 30, 2008

 

 

 

FY 2008

FY 2007

TOTAL REVENUES

$1,756,104

$1,749,823

Local Sources

$421,414

$427,782

% of Total Revenues

24.00%

24.45%

State Sources

$1,079,319

$980,534

% of Total Revenues

61.46%

56.04%

Federal Sources

$255,371

$341,507

% of Total Revenues

14.54%

19.52%

 

TOTAL EXPENDITURES

$1,795,472

$1,731,217

Salaries and Benefits

$1,182,306

$1,066,198

% of Total Expenditures

65.85%

61.59%

Purchased Services

$450,857

$471,131

% of Total Expenditures

25.11%

27.21%

All Other Expenditures

$162,309

$193,888

% of Total Expenditures

9.04%

11.20%

 

TOTAL NET ASSETS

$290,071

$329,439

 

INVESTMENT IN CAPITAL ASSETS

$87,209

$98,545

 

Percentages may not add due to rounding.

 

 

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Larry D. Pfeiffer

Currently:  Honorable Larry D. Pfeiffer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #40 does not have sufficient internal controls over the financial reporting process. 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

Controls Over Financial Statement Preparation

 

         The Regional Office of Education #40 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 #40 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.  For example, auditors, in their review of the Regional Office’s accounting records, noted the following:

 

  • Numerous adjustments were required to present financial statements in accordance with generally accepted accounting principles. 

  • The Regional Office did not have adequate controls over the maintenance of complete records of accounts receivable, accounts payable, or deferred revenues.  Detailed testing of accounts payable and accounts receivable noted 4 items totaling $13,233 had not been recorded to accounts payable and 7 items totaling $21,142 had not been recorded to accounts receivable. 

        

          According to Regional Office officials, they did not have adequate funding to hire and/or train their accounting personnel in order to comply with these requirements.  (Finding 08-01, pages 11-12)

 

         The auditors recommended that, as part of its internal control over the preparation of its financial statements, including disclosures, the Regional Office of Education #40 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.

 

         The Regional Office of Education #40 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 services for the schools in the Region.  The Regional Office noted that it is presently in the process of training its personnel to meet the SAS 112 guidelines.

 

AUDITORS’ OPINION

 

         Our auditors state the Regional Office of Education #40’s financial statements as of June 30, 2008 are fairly presented in all material respects. 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:JRB

 

SPECIAL ASSISTANT AUDITORS

 

         Our special assistant auditors were West & Company, LLC.