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, 2006

 

Summary of Findings:

 

Total this audit†††††††††††††             4

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

Repeated from last audit†††††††††† 3

 

Release Date:

July 31, 2007

 

 

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 #41 did not properly record the entries necessary to reflect payables and receivables for the current and prior year.

 

         The Regional Office of Education #41ís expenditure report for one grant did not agree with the actual amounts expended as shown on the general ledger, resulting in difference of $36,788.

 

        The Regional Office program bookkeepers are able to enter general journal entries allocating expenditures between various programs without proper review and approval.

 

  • The Regional Office of Education #41 did not comply with certain statutory administrative requirements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

††††††† {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, 2006

 

 

 

 

FY 2006

FY 2005

TOTAL REVENUES

$5,319,022

$6,644,314

Local Sources

$2,857,687

$2,709,464

% of Total Revenues

53.73%

40.78%

State Sources

$1,489,843

$1,562,629

% of Total Revenues

28.01%

23.52%

Federal Sources

$971,492

$2,372,221

% of Total Revenues

18.26%

35.70%

 

TOTAL EXPENDITURES

$5,464,074

$6,450,024

Salaries and Benefits

$4,060,052

$4,138,741

% of Total Expenditures

74.30%

64.17%

Purchased Services

$750,456

$1,048,947

% of Total Expenditures

13.73%

16.26%

All Other Expenditures

$653,566

$1,262,336

% of Total Expenditures

11.96%

19.57%

 

 

 

TOTAL NET ASSETS

$2,010,494

$2,155,546

 

 

 

INVESTMENT IN CAPITAL ASSETS

 

$250,462

 

$147,094

 

 

 

REGIONAL SUPERINTENDENT

During Audit Period:Honorable Harry Briggs

Currently:Honorable Robert Daiber


 

 

 

 

 

 

 

 

 


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 #41ís expenditure report for one grant did not agree with the actual amounts expended as shown on the general ledger, resulting in difference of $36,788.

 

 

 

 

 

 

 

 

 

 

 


The Regional Office program bookkeepers are able to enter general journal entries allocating expenditures between various programs without proper review and approval.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #41 did not comply with certain statutory administrative requirements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

UNRECORDED PAYABLES AND RECEIVABLES

 

The Regional Office of Education #41 did not properly record payables and receivables for the current and prior year.Accordingly, the Regional Office of Educationís general ledger did not agree to the audited financial statements.Adjusting entries were required as part of the 2006 year end audit to account for the receivables, payables, and deferred revenue at June 30, 2005 and 2006.

 

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 06-1, page 12)This finding was first reported in 2003.

 

The Regional Office of Education #41 agreed with the recommendation, noting it has hired an outside consultant to help train responsible personnel to properly maintain its general ledger on a modified accrual basis of accounting.(For previous Regional Office response, see Digest Footnote #1.)

 

 

INACCURATE EXPENDITURE REPORTS FILED

 

The Regional Office of Education #41ís expenditure report for one grant did not agree with the actual amounts expended as shown on the general ledger, resulting in difference of $36,788.Grant expenditure reports filed with the State should agree to general ledger totals.(Finding 06-2, page 13)This finding was first reported in 2003.

 

The Regional Office accepted the recommendation stating it will file a corrected expenditure report and return the unspent funds.They also stated that to prevent this from happening in the future, instruction will be given to all program directors that the expenditure reports filed with the granting agencies must be reconciled with the general ledger prior to the final report being submitted. (For previous Regional Office response, see Digest Footnote #2.)

 

 

INADEQUATE REVIEW OF JOURNAL ENTRIES

 

††††††††† The Regional Office program bookkeepers are able to enter general journal entries allocating expenditures between various programs without proper review and approval.Adequate controls over compliance with laws, regulations, contracts, and grant agreements require supervisory review of expenditures charged to grant programs.(Finding 06-3, page 14)

The Regional Office accepted the recommendation and will develop a process to request, approve, and enter general journal entries.In addition, the Regional Superintendent, Assistant Regional Superintendent, or the Program Director will review and approve all general journal entries with supporting information and documentation prior to posting to the accounting records.

 

 

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 his 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 of Education #41 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.

 

The Illinois School Code (105 ILCS 5/3-14.5) requires the Regional Superintendent to visit each public school in the county at least once a year, noting the methods of instruction, the branches taught, the textbooks used, and the discipline, government and general condition of the school.This mandate has existed in its current form since at least 1953.

 

The Regional Office of Education is visiting each public school at least once a year and the methods of instruction, the branches taught, the discipline, government, and general condition of the school are all noted.However, the textbooks used are not noted.Regional Office officials believe this mandate is outdated and stated that instruction is not driven by textbooks but by State Standards. The Regional Superintendent is active in seeing that teachers are familiar with new methods of instruction through workshops organized by the Regional Office of Education.† †(Finding 06-4, page 15-16)

††††††

The Regional Office responded that with regards to compliance with 105 ILCS 5/3-14.11 and 105 ILCS 5/3-14.5, the Regional Office of Education in conjunction with the Illinois Association of Regional Superintendents is in the process of seeking a legislative solution to this and other obsolete passages within the Illinois School Code.

 

 

AUDITORSí OPINION

 

Our auditors state the Regional Office of Education #41ís financial statements as of June 30, 2006 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 2005, the Regional Office of Education #41 agreed with the recommendation, noting it has a new accounting system that will allow it to properly maintain its general ledger on a modified accrual basis.In addition, training will be initiated for the personnel responsible for the general ledger.

 

 

#2: INACCURATE EXPENDITURE REPORTS FILED --†††††

Previous Regional Office Response

 

In its prior response in 2005, the Regional Office accepted the recommendation stating it will file a corrected expenditure report for the grant year ended June 30, 2005 and will instruct all program directors that the expenditure reports filed with the granting agencies must be reconciled with the general ledger prior to the final report being submitted.

 

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