REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #48

 

PEORIA 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†††††††††††††             8

Repeated from last audit†††††††††† 2

 

Release Date:

April 5, 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 are also available on

the worldwide web at

http://www.auditor.illinois.gov

 

 

 

 

 

 

 

SYNOPSIS

 

        The Regional Office of Education #48 did not comply with certain statutory administrative requirements.

 

        The Regional Office of Education #48 did not maintain adequate controls over property and equipment.

 

        The Regional Office of Education #48 did not maintain a complete indirect cost allocation plan in accordance with OMB Circular A-87.

 

        The Regional Office of Education #48 did not submit timely final expenditure reports for all its grant programs passed through ISBE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

REGIONAL OFFICE OF EDUCATION #48

PEORIA 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

$5,063,663

$5,543,510

Local Sources

$1,067,448

$800,298

% of Total Revenues

21.08%

14.44%

State Sources

$2,015,564

$2,058,522

% of Total Revenues

39.80%

37.13%

Federal Sources

$1,980,651

$2,684,690

% of Total Revenues

39.12%

48.43%

 

TOTAL EXPENDITURES

$4,794,423

$5,426,213

Salaries and Benefits

$1,709,801

$1,543,425

% of Total Expenditures

35.66%

28.44%

Purchased Services

$937,655

$1,159,737

% of Total Expenditures

19.56%

21.37%

All Other Expenditures

$2,146,967

$2,723,051

% of Total Expenditures

44.78%

50.18%

 

 

 

TOTAL NET ASSETS

$1,299,705

$1,031,864

 

 

 

INVESTMENT IN CAPITAL ASSETS

 

$192,583

 

$187,550

 

†††††† 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 comply with certain statutory administrative requirements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #48 did not maintain adequate controls over property and equipment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #48 did not maintain a complete indirect cost allocation plan in accordance with OMB Circular A-87.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #48 did not submit timely final expenditure reports for all its grant programs passed through ISBE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 districtís 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†† grantís 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.

†††††††

 

 

AUDITORSí OPINION

 

†††††††† Our auditors state the Regional Office of Education #48ís financial statements as of June 30, 2006 are fairly stated in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KJM:ro

 

 

 

SPECIAL ASSISTANT AUDITORS

†††††††† Our special assistant auditors were Sulaski & Webb, CPAs.