FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
CONTROL
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 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Regional Office officials noted they believe the mandate is outdated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 5/3-5)
also requires the Regional Superintendent to present under oath or
affirmation to the county board at its meeting in September and as nearly
quarterly thereafter as it may have regular or special meetings, a report of
all his acts as county superintendent, including a list of all the schools
visited with the dates of visitation. This mandate has existed in its current
form since at least 1953.
The Regional Office did not present at the
September county board meeting, and as nearly quarterly thereafter, a report
of all of his acts including a list of all the schools visited and the dates
of visitation. The Regional Office
provides the county board with its State of the Region Statistical Report on
an annual basis, but this report is not updated quarterly and does not
contain all information required in the statute.
Finally,
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
schools. This mandate has existed in
its current form since at least 1953.
The
Regional Office performs compliance inspections for each public school in the
region on a rotational basis every three to four years instead of
annually. While the Illinois Public
School Accreditation Process Compliance Component document completed at these
inspections includes many of the items delineated in 105 ILCS 5/3-14.5, it
does not include a review of the methods of instruction and the textbooks
used in the district. (Finding 06-1, pages 12-14)
The
Regional Office accepted the recommendation to comply with the statutory
requirements. The Regional Office
responded that with regards to compliance with 105 ILCS 5/3-14.11 and 105
ILCS 5/3-14.5, the Illinois Association of Regional Superintendents of
Schools and the Illinois State Board of Education have agreed to seek
legislation to remove duplicative and/or obsolete sections of the Illinois
School Code. Both parties believe that
105 ILCS 5/3-7 of the Illinois School Code and 23 Ill. Adm. Code 1.20,
respectively, contain more current, thorough, and comprehensive requirements
concerning a public school district’s financial transactions and visitation
of public schools by the Regional Superintendent. As a result, the two parties working
together will seek legislation to repeal these two sections of the Illinois
School Code.
With
regards to 105 ILCS 5/3-5, the Regional Superintendent will make the required
presentation in September of each year and quarterly thereafter a report of
all his acts including a list of all the schools visited and dates of
visitation.
INADEQUATE CONTROLS OVER PROPERTY AND EQUIPMENT
The Regional Office of Education #48
did not have adequate controls over fixed assets. For example, there were several capital
outlay expenditure items that were not included on the fixed asset listing at
the Two
Rivers Professional
Development
Center. Upon investigation, it was determined that
the items missing from the fixed asset listing were items which were located
at other facilities. While most of the
items selected for observation testing were located, Regional Office
personnel did not know the specific location of one of the selected items
because there was no log-out sheet or other documentation available to
indicate its location.
The Regional Office of
Education (ROE) Accounting Manual requires each ROE to maintain detailed
fixed asset records for both accounting and 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 No. 06-2, pages 15-16)
The Regional Office of Education #48 agreed
with the finding stating it currently has a fixed asset listing that includes
all the details required by the ROE Accounting Manual. This listing will be updated and checked
for accuracy and existence through an annual physical inventory. A reconciliation will be performed between
the fixed asset listing and the recorded capital outlay expenditures for each
year. In addition, the Regional Office
will implement procedures to track the location of property items maintained
at other locations and items that are temporarily used off of ROE
property.
LACK OF COST ALLOCATION PLAN
The Regional Office of Education #48 does
not maintain a complete cost allocation plan to allocate the indirect costs
in accordance with OMB Circular A-87. During the fiscal year, the ROE created
a cost allocation plan for employees who work on multiple activities or cost
objectives to distribute salaries and benefits to the various grants and
programs it administers. Such salaries
and benefits are allowable expenditures under OMB Circular A-87. The ROE invoices the grants and programs it
administers for other central service activities based on the grant’s budgeted costs, rather than as
part of a cost allocation plan.
Grants, cost reimbursement contracts, and other agreements with the
Federal Government should bear their fair share of costs recognized under the
principles established by the federal Office of Management and Budget
(OMB). Costs are allocable to Federal
Awards if the goods or services involved are chargeable or assignable to the
award in accordance with the relative benefits received. Where an accumulation of indirect costs
will ultimately result in charges to a Federal Award, a cost allocation plan
is required as described in the OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments.
(Finding No. 06-3, pages 17-20)
The Regional Office of Education #48
accepted the recommendation stating it would continue to develop and implement
a cost allocation plan in accordance with OMB Circular A-87 which addresses
allowable costs to all applicable programs.
The Regional Office will consult with the Illinois State Board of
Education while developing and implementing this plan to be sure that it
meets applicable standards.
EXPENDITURE
REPORTS NOT SUBMITTED TIMELY
The Regional Office of Education #48
did not submit timely final expenditure reports for all its grant programs
passed through the Illinois State Board of Education (ISBE). During the testing of grants passed through
ISBE, nine final expenditure reports totaling $2,161,810 were filed 2 to 60
days late or were not filed as of November 15, 2006.
The financial and reporting
requirements section of grant agreements states that final expenditure
reports are due by the end of the month following the project end date. (Finding No. 06-4, pages 21-24)
The Regional Office of Education #48
accepted the recommendation stating that it will comply with all the reporting
requirements of its grant agreements and ensure timely submission of all
reports. A calendar of reporting
deadlines will be compiled and monitored by a person independent of the
reporting function to ensure compliance.
AUDITORS’ OPINION
Our auditors state the Regional Office of Education #48’s financial
statements as of June 30, 2006 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, CPAs.
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