REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #48

 

PEORIA COUNTY

 

FINANCIAL AND COMPLIANCE AUDIT

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

For the Year Ended:

June 30, 2003

 

Summary of Findings:

 

Total this audit                     2

Total last audit                     2

Repeated from last audit      1

 

Release Date:

March 30, 2004

 

 

 

 

 

 

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 TDD (217) 524-4646

 

This Report Digest is also available on

the worldwide web at

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

 

 

 

 

SYNOPSIS

  • The Regional Office of Education #48 did not have adequate controls over fixed assets.
  • The Regional Office of Education #48 prepares its financial reports on a cash basis of accounting instead of the modified accrual basis of accounting, which is required by Generally Accepted Accounting Principles.

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

              REGIONAL OFFICE OF EDUCATION #48

                                 PEORIA COUNTY

 

                FINANCIAL AND COMPLIANCE AUDIT

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

                     For The Year Ended June 30, 2003

FY 2003

FY 2002

TOTAL REVENUES

$3,710,178

$3,630,819

Local Sources

$1,551,461

$437,658

% of Total Revenues

41.82%

12.05%

State Sources

$1,964,418

$2,862,197

% of Total Revenues

52.95%

78.83%

Federal Sources

$194,299

$330,964

% of Total Revenues

5.24%

9.12%

 

TOTAL EXPENDITURES

$3,406,702

$3,924,397

Salaries and Benefits

$1,629,170

$1,551,249

% of Total Expenditures

47.82%

39.53%

Purchased Services

$1,103,974

$1,572,970

% of Total Expenditures

32.41%

40.08%

All Other Expenditures

$673,558

$800,178

% of Total Expenditures

19.77%

20.39%

 

 

 

COST OF PROPERTY AND EQUIPMENT

$482,331

$1,019,415

 

* Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT

During Audit Period: Honorable Gerald Brookhart

Currently: Honorable Gerald Brookhart

 

 

 

 

 

 

 

The Regional Office of Education #48 did not have adequate controls over fixed assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Regional Office of Education #48 prepares its financial reports on a cash basis of accounting.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER PROPERTY

The Regional Office of Education #48 did not have adequate controls over fixed assets. For example, there were no formal policies or procedures to monitor and control equipment and other fixed assets. Fixed asset listings had not been updated with acquisitions or disposals. Physical inventories were not consistently performed and reconciled with the fixed asset listing. The fixed asset listings did not include appropriate reference to the acquisition document and the acquisition date. Appropriate forms were not used to document disposal or retirement of assets. Disposal dates were also not indicated in any listing. Therefore there was no basis for verifying the reported current year disposals in the fixed assets reports. Finally, the balances in the General Fixed Asset Account Group were not recorded in the general ledger.

The Regional Office of Education Accounting Manual requires each ROE to maintain detailed fixed asset records for both accounting purposes as well as insurance purposes, for fixed assets costing $500 or more. In addition, sound internal controls require that policies and procedures on fixed assets cover the acquisition and tagging, recording and reporting, depreciation (if applicable), transfers and dispositions, and physical inventory, and that they be formally documented and consistently applied (Finding 03-1, pages 11-13).

The Regional Office of Education #48 accepted the recommendation, responding that they have maintained a comprehensive documentation file regarding the acquisition and disposal of fixed assets. The Regional Office stated that logs of equipment, serial numbers, costs, physical location and disposition have been created and updated. The Regional Office also stated they will conduct meetings among the directors and accounting staff to develop uniform, formal policies to monitor and control fixed asset listings and to take other corrective action.

ACCOUNTING RECORDS MAINTAINED ON A

CASH BASIS OF ACCOUNTING

The Regional Office of Education #48 prepares its financial reports on the cash basis of accounting. The Regional Office of Education #48 is not maintaining records of its accounts receivable, accounts payable, and deferred revenue in order to efficiently and effectively convert their financial statements from a cash basis of accounting to the modified accrual basis of accounting.

Generally Accepted Accounting Principles require general-purpose financial statements to be prepared on the modified accrual basis of accounting (Finding 03-2, page 14). This finding is repeated from our 2002 audit.

The Regional Office of Education #48 accepted the recommendation responding that they have historically prepared financial reports on a cash basis. The Regional Office stated they are transitioning into a modified accrual system through the use of vouchers. Each purchase for end of current fiscal year expenses will be done by voucher, making sure that any taxes, shipping or additional charges are included. The actual expense will be recorded in the current fiscal year, even if the actual check is issued the following year. ( For previous Regional Office response, see Digest Footnote #1.)

 

AUDITORSí OPINION

Our auditors state the Regional Office of Education #48ís financial statements as of June 30, 2003 are fairly stated in all material respects.

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Sulaski & Webb.

 

DIGEST FOOTNOTES

#1: ACCOUNTING RECORDS MAINTAINED ON CASH BASIS Ė Previous Regional Office Response

In its prior response in 2002, the Regional Office accepted the finding, noting that they were in the process of converting to the Regional Accounting Program (RAP) developed by the Illinois State Board of Education. The RAP system has a system to assist in maintaining subsidiary records of accounts receivable, accounts payable, and deferred revenue balances.

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