REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #41

 

MADISON COUNTY

 

FINANCIAL AUDIT

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

 

For the Year Ended:

June 30, 2004

 

Summary of Findings:

 

Total this audit†††††††††††††             5

Total last audit†††††††††††††             6

Repeated from last audit†††††††††† 3

 

Release Date:

July 13, 2005

 

 

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 is also available on

the worldwide web at

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

 

 

 

 

 

 

 

SYNOPSIS

 

 

         The Regional Office of Education #41 did not allocate payroll based on time spent working on each grant.

 

         The Regional Office of Education #41 did not properly record the entries necessary to reflect payables and receivables for the current and prior year.

 

         The Regional Office of Education #41 did not reconcile the bank statements to the general ledger until the end of the year.

  • The Regional Office of Education #41ís expenditure report for various grants did not agree with the actual amounts expended as shown on the general ledger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


 

 

REGIONAL OFFICE OF EDUCATION #41

MADISON COUNTY

 

FINANCIAL AUDIT

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

For the Year Ended June 30, 2004

 

 

 

 

FY 2004

FY 2003

TOTAL REVENUES

$6,933,161

$5,694,296

Local Sources

$2,274,881

$1,553,876

% of Total Revenues

32.81%

27.29%

State Sources

$1,104,365

$2,119,840

% of Total Revenues

15.93%

37.23%

Federal Sources

$3,553,915

$2,020,580

% of Total Revenues

51.26%

35.48%

 

TOTAL EXPENDITURES

$6,803,861

$5,767,973

Salaries and Benefits

$3,511,066

$2,899,172

% of Total Expenditures

51.60%

50.26%

Purchased Services

$1,292,414

$1,879,255

% of Total Expenditures

19.00%

32.58%

All Other Expenditures

$2,000,381

$989,546

% of Total Expenditures

29.40%

17.16%

 

 

 

TOTAL NET ASSETS1

$1,961,256

$1,831,956

 

 

 

INVESTMENT IN CAPITAL ASSETS1

 

$121,175

 

$154,352

 

1         In fiscal year 2004, Regional Offices of Education implemented Government Accounting Standards Board (GASB) Statement No. 34 which established a new financial reporting model for state and local governments.Government-wide financial statements are prepared using full accrual accounting that reports Total Net Assets.The fiscal year 2003 ending general fixed assets have been restated to reflect the changes required as part of the implementation of GASB Statement No. 34.

††††††††††††† Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT

During Audit Period:Honorable Harry Briggs

Currently:Honorable Harry Briggs


 

 

 

 

 

 


The Regional Office of Education #41 did not allocate payroll based on time spent working on each grant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #41 did not properly record the entries necessary to reflect payables and receivables for the current and prior year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #41 did not reconcile the bank statements to the general ledger until the end of the year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #41ís expenditure report for various grants did not agree with the actual amounts expended as shown on the general ledger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

PAYROLL COSTS NOT PROPERLY ALLOCATED

 

†††††† The Regional Office of Education #41 did not allocate payroll based on time spent working on each grant.Rather, payroll was allocated based on the grant budget and work completed.

 

†††††† Based on allowable cost principles, payroll costs of each employee who works for more than one grant must be allocated to each individual grant based on the amount of time spent on each grant. (Finding 04-1, page 12)

 

†††††† The Regional Office of Education #41 agreed with the recommendation to allocate payroll costs based on time spent on each grant.

 

 

UNRECORDED PAYABLES AND RECEIVABLES

 

†††††† The Regional Office of Education #41 did not properly record the entries necessary to reflect payables and receivables for the current and prior year.The Regional Office did not maintain subsidiary records of accounts receivable, accounts payable, and deferred revenue.Accordingly, the Regional Office of Educationís general ledger did not agree to the audited financial statements.Adjusting entries were required as part of the 2004 year end audit to account for the receivables and payables at June 30, 2003 and 2004.

 

†††††† Accounting principles generally accepted in the United States of America require government-wide financial statements to be prepared on the accrual basis of accounting and the fund financial statements to be prepared on the modified accrual basis of accounting.(Finding 04-2, page 13)This finding is repeated from our 2003 audit.

 

†††††† The Regional Office of Education #41 agreed with therecommendation, stating that accurate records will be maintained that reflect receivables and payables at the end of each year. (For previous Regional Office response, see Digest Footnote #1.)

 

 

BANK RECONCILIATIONS

 

†††††† Although the Regional Office of Education #41 reviewed bank statements monthly for outstanding items, they were not reconciled to the general ledger until the end of the year.Numerous adjusting entries were required at the end of the year to balance the bank reconciliation with the general ledger.

 

†††††† Bank reconciliations should be completed on a monthly basis and reconciled to the general ledger.(Finding 04-3, page 14)This finding is repeated from our 2003 audit.

 

†††††† The Regional Office of Education #41 accepted the recommendation to have an individual, other than the person preparing the bank reconciliations, verify that the bank reconciliations have been properly prepared, and formally approve them.(For previous Regional Office response, see Digest Footnote #2.)

 

 

INACCURATE EXPENDITURE REPORTS FILED

 

†††††† The expenditure report for various grants for the grant period ending June 30, 2004 did not agree with the actual amounts expended as shown on the general ledger.The net difference for 4 programs amounted to $41,161 more expenditures on the general ledger than on the grant expenditure reports.

 

†††††† Grant expenditure reports filed with the State should agree to general ledger totals.(Finding 04-4, page 15)This finding is repeated from our 2003 audit.

 

†††††† The Regional Office accepted the recommendation stating it will correct the expenditure reports and reconcile the program administrative records to the general ledger. (For previous Regional Office response, see Digest Footnote #3.)

 

 

OTHER FINDING

 

††††† The remaining finding is reportedly being given attention by Regional Office of Education #41.We will review progress toward the implementation of our recommendations during the next audit.

 

 

AUDITORSí OPINION

 

††††† Our auditors state the Regional Office of Education #41ís financial statements as of June 30, 2004 are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:JRB

 

 

 

SPECIAL ASSISTANT AUDITORS

 

††††††† Our special assistant auditors were J.W. Boyle & Co., Ltd.

 

 
DIGEST FOOTNOTES

 

#1: UNRECORDED PAYABLES AND RECEIVABLES MATERIAL TO FINANCIAL STATEMENTS -- Previous Regional Office Response

 

In its prior response in 2003, the Regional Office accepted the finding and stated it will maintain accurate records that will enable it to post necessary entries to reflect the receivables and payables at year-end.

 

 

#2: BANK RECONCILIATIONS WERE NOT RECONCILED TO THE GENERAL LEDGER TIMELY --†††††

Previous Regional Office Response

 

In its prior response in 2003, the Regional Office accepted the finding stating the Accounting Assistant would be doing the bank reconciliations and the Head Accountant would verify that all reconciliations are balanced and accurately reflected on the general ledger.The Assistant Regional Superintendent would ensure all reconciliations are correctly performed and balanced.

 

#3: INACCURATE GENERAL LEDGER --Previous Regional Office Response

 

In its prior response in 2003, the Regional Office accepted the finding stating the Regional Office would provide leadership to assure that the revenues and expenditures per the general ledger agreed with the granting agency.

 

Complete Regional Office responses to prior findings are available upon request from the Auditor Generalís Office.