REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #53: MASON,
TAZEWELL, AND WOODFORD COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  MAY 3, 2018

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 1 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 1 -- 1

FINDINGS LAST AUDIT: 1

Category 1: Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State laws
and regulations (material noncompliance).
Category 2: Findings that are significant
deficiencies in internal control and
noncompliance with State laws and
regulations.
Category 3: Findings that have no internal
control issues but are in noncompliance with
State laws and regulations.

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, 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
www.auditor.illinois.gov

SYNOPSIS

• (17-1) The Regional Office of Education #53
did not have sufficient internal controls
over the financial reporting process.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT PREPARATION

The Regional Office of Education #53 (ROE)
did not have sufficient internal controls
over the financial reporting process in order
to record and present the pension information
correctly. The ROE maintained its accounting
records on a cash basis during the fiscal
year and posted year-end accrual and other
applicable entries for financial statement
purposes. While the ROE maintained controls
over the processing of most accounting
transactions and prepared its financial
statements, there were not sufficient
controls over the preparation of generally
accepted accounting principles (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.

The ROE is required to maintain a system of
controls over the preparation of financial
statements in accordance with GAAP. The ROE
internal controls over GAAP financial
reporting should include adequately trained
personnel with the knowledge, skills, and
experience to prepare GAAP based financial
statements and include all disclosures as
required by the Governmental Accounting
Standards Board (GASB).

Through inquiries and discussions with the
ROE’s accounting personnel and the Regional
Superintendent, auditors noted the ROE did
not have adequate controls to record and
report the ROE’s net accrued pension
liabilities/assets, deferred outflows of
resources, deferred inflows of resources, and
pension expenses in accordance with GAAP.

According to Regional Office officials, the
complex requirements of GASB Statements No.
68 and No. 71 will require additional time
and training before the ROE can fully
implement the requirements on its own.
(Finding 2017-001, pages 11a-11b)

The auditors recommended that as part of its
internal control over the preparation of
financial statements, the ROE should
implement comprehensive preparation
procedures to ensure the financial statements
are complete and accurate. These procedures
should be performed by a properly trained
individual possessing a thorough
understanding of the applicable GAAP, GASB
pronouncements, and knowledge of the ROE’s
activities and operations.

ROE Response: The ROE has taken steps to
properly record financial transactions and
follow GAAP. In regards to the standards
related to financial reporting for pensions,
we will review internal controls and
determine what can be done within agency
resources to mitigate or eliminate this
internal control deficiency.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #53’s financial statements as of
June 30, 2017 are fairly presented in all
material respects.

This financial report was conducted by the
firm of Kemper CPA Group LLP.

AMEEN DADA
Division Director

This report is transmitted in accordance with
Section 3-14 of the Illinois State Auditing
Act.

FRANK J. MAUTINO
Auditor General

FJM:JRB