REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #43

 

MARSHALL/PUTNAM/ WOODFORD COUNTIES

 

FINANCIAL AUDIT

For the Year Ended:

June 30, 2007

 

Summary of Findings:

 

Total this audit                  2

Total last audit                  1

Repeated from last audit   0

 

 

Release Date:

June 19, 2008

 

 

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 are also available on

the worldwide web at

http://www.auditor.illinois.gov

 

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

 

·        The Regional Office of Education #43 did not have sufficient internal controls over the financial reporting process.

 

·        The Regional Office of Education #43 did not have sufficient collateral for a bank account.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

 

 

 

 

 

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


                                                                                   

REGIONAL OFFICE OF EDUCATION #43

MARSHALL/PUTNAM/WOODFORD COUNTIES

 

FINANCIAL AUDIT

For The Year Ended June 30, 2007

 

 

 

FY 2007

FY 2006

TOTAL REVENUES

$708,777

$278,526

Local Sources

$114,261

$80,216

% of Total Revenues

16.12%

28.80%

State Sources

$590,578

$194,375

% of Total Revenues

83.32%

69.79%

Federal Sources

$3,938

$3,935

% of Total Revenues

.56%

1.41%

 

TOTAL EXPENDITURES

$556,605

$275,624

Salaries and Benefits

$417,611

$230,821

% of Total Expenditures

75.03%

83.74%

Purchased Services

$122,412

$41,108

% of Total Expenditures

21.99%

14.91%

All Other Expenditures

$16,582

$3,695

% of Total Expenditures

2.98%

1.34%

 

 

 

TOTAL NET ASSETS

$177,011

$24,839

 

 

 

INVESTMENT IN CAPITAL ASSETS

 

$0

 

$178

 

 

     Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT 

During Audit Period: Honorable Rolland D. Marshall

Currently:  Honorable Ronda Bangert

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #43 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #43 did not have sufficient collateral for a bank account.

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

Controls Over Financial Statement Preparation

 

         The Regional Office of Education #43 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 #43 did 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:

 

  • The Regional Office did not have adequate controls over the maintenance of complete records of accounts receivable and accounts payable.  For example, at June 30, 2007, accounts payable of $874 and accounts receivable of $9 were not reflected in the Regional Office’s accounting records.

  • The Regional Office’s financial information required adjusting entries to present financial statements in accordance with generally accepted accounting principles.  (Finding 07-1, page 13)

 

         The auditors recommended that, as part of its internal control over the preparation of its financial statements, including disclosures, the Regional Office of Education #43 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 #43 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 review financial statements would considerably diminish the limited available funds for educational services in the region.

 

 

COLLATERALIZATION OF BANK DEPOSITS

 

         The Regional Office of Education #43 did not have sufficient collateral for a bank account.  The Public Funds Deposit Act (30 ILCS 225/1) gives the authorization for deposits in excess of the federally insured limit to be covered by pledged collateral held by the financial institutions’ trust departments in the Regional Office of Education #43’s name.

 

         As of June 30, 2007, the ROE had one cash account with a balance totaling $101,893 at its financial institution.  The Federal Deposit Insurance Corporation (FDIC) covers up to a maximum of $100,000.  The ROE did not have depository insurance or collateral for $1,893.  According to ROE management, the unsecured amount was an oversight as the balance in this account went over the FDIC insured limit during the current year.  (Finding 07-2, page 14)

 

         Auditors recommended that Regional Office of Education #43 periodically monitor the amount of collateral held on deposits to ensure that an adequate amount is maintained.  The ROE should also establish controls for confirming amounts pledged by the financial institution and consider making a formal arrangement with the financial institution to automatically pledge securities for any deposit amount in excess of FDIC insurance amounts.

 

         The Regional Office of Education #43 responded that it will periodically monitor the amount of collateral held on deposits to ensure that an adequate amount is maintained in the financial institution.  The ROE reported that it has established a program with the financial institution that monitors and covers deposit amounts in excess of the FDIC insurance limit.

 

 

AUDITORS’ OPINION

 

         Our auditors state the Regional Office of Education #43’s financial statements as of June 30, 2007 are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:JRB

 

SPECIAL ASSISTANT AUDITORS

 

Our special assistant auditors were Ginoli & Company LTD.