REPORT DIGEST REGIONAL OFFICE OF EDUCATION #56 WILL
COUNTY
FINANCIAL AUDIT (In Accordance with the Single Audit Act and OMB Circular A-133) For the Year Ended: June 30, 2008 Summary of Findings: Total this audit 1 Total last audit 1 Repeated from last audit 0 Release Date: April 30, 2009
State of
Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL
To obtain a copy of the
Report contact: Office of the Auditor
General
(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
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SYNOPSIS ·
The
Regional Office of Education #56 did not maintain adequate controls over
purchased services expenditures for the McKinney Education for Homeless
Children Program. {Expenditures
and Revenues are summarized on the reverse page.} |
REGIONAL OFFICE OF
EDUCATION #56
FINANCIAL AUDIT
(In Accordance with the
Single Audit Act and OMB Circular A-133)
For The Year Ended June
30, 2008
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FY 2008
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FY 2007
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TOTAL REVENUES |
$11,514,592 |
$10,778,597 |
Local Sources |
$1,612,089 |
$1,835,324 |
% of Total Revenues |
14.00% |
17.03% |
State Sources |
$4,878,408 |
$3,692,982 |
% of Total Revenues |
42.37% |
34.26% |
Federal Sources |
$5,024,095 |
$5,250,291 |
% of Total Revenues |
43.63% |
48.71% |
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TOTAL EXPENDITURES |
$11,294,588 |
$10,455,940 |
Salaries and Benefits |
$2,007,983 |
$1,952,671 |
% of Total Expenditures |
17.78% |
18.68% |
Purchased Services |
$2,756,396 |
$2,289,685 |
% of Total Expenditures |
24.40% |
21.90% |
All Other Expenditures |
$6,530,209 |
$6,213,584 |
% of Total Expenditures |
57.82% |
59.43% |
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TOTAL NET ASSETS |
$2,216,955 |
$1,996,951 |
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INVESTMENT IN
CAPITAL ASSETS |
$29,414 |
$28,825 |
Percentages
may not add due to rounding. |
REGIONAL
SUPERINTENDENT |
During Audit Period: Honorable Jennifer Bertino-Tarrant Currently: Honorable Jennifer Bertino-Tarrant |
The Regional
Office of Education #56 did not maintain adequate controls over purchased
services expenditures for the |
FINDINGS, CONCLUSIONS AND RECOMMENDATIONSINADEQUATE
CONTROLS OVER PURCHASED SERVICES EXPENDITURES
The Regional Office of Education #56
did not maintain adequate controls over purchased services expenditures for
the McKinney Education for Homeless Children Program. Office of Management and Budget
(OMB) Circular A-87 Cost Principles for
State, Local and Indian Tribal Governments, Attachment A – General
Principles for Determining Allowable Costs, Section C. 1. (j) states that for
costs to be allowable they must be adequately documented. In addition, OMB Circular A-87 Attachment B
– Selected Items of Cost, Section 32 (a) and (b. 8.) states that costs of
professional and consultant services rendered by persons who are members of a
particular profession or possess a special skill, and who are not officers or
employees of the organization, are allowable.
In determining allowability, certain factors such as the adequacy of
the contractual agreement for the service (e.g., description of the service,
estimate of time required, rate of compensation, and termination provisions)
should be considered. Title 23 Illinois Administrative
Code: Education and Cultural
Resources, Chapter I, Section 525.160, Fiscal
Procedures requires the Regional Superintendent of Schools in each
Regional Office of Education to maintain accurate financial records in
accordance with 23 Illinois Administrative Code 110 Program Accounting Manual and Regional Office of Education (ROE)
Accounting Manual (the Manual), as applicable. The Manual defines “purchased services”
expenditures as amounts paid for personal services rendered by personnel who are
not on the payroll of the local education agency (LEA), and other services
which the LEA may purchase. In FY 2008, the Will County Regional
Office of Education #56 became the lead liaison of the McKinney-Vento
Homeless Children and Youth Program for Area I Regional Offices of
Education. The auditors’ review of
program expenditures disclosed the following weaknesses in controls over
purchased services:
Failure to execute contracts with
independent contractors may result in services being provided that are inconsistent
with program goals and activities, inadequate protection of the Regional
Office’s interests, and incurring of unallowable costs. In addition, inadequate supporting documents
do not provide sufficient evidence for the validity and accuracy of the
payments processed, thereby increasing the risk that unauthorized
disbursements may be made. Salaries
and purchased services expenditures were overstated and understated respectively,
by $116,066. According to Regional Office of
Education #56 management, they overlooked the requirement to execute a
written contract with the independent consultants. Management further stated that failure to
require timesheets or time and effort reports from the consultants was due to
an oversight. In addition, the program
budgeted services as salaries and thus, the payments were accounted for as
salaries instead of purchased services. (Finding 08-1,
pages 13-15) Auditors recommended that the Will
County Regional Office of Education #56 should ensure that all costs charged
to the federal program are sufficiently documented and adequately
supported. The Regional Office should
require all consultant contracts to be supported by a written contract with
detailed scope of services and rates of compensation. Auditors also recommended that all payments
to consultants should be appropriately supported by documentation of actual
services rendered or billed. Auditors also recommended that the
Regional Office of Education #56 should establish procedures to ensure
transactions are carefully reviewed for proper accounting and recognition as
required by the Illinois Administrative Code and the ROE Accounting Manual. Specifically, the Regional Office should
ensure governmental fund expenditures are classified by object classes
according to the types of items purchased or services obtained.
The Regional Office of Education #56 agreed with the finding. The ROE noted that the payments for the
grant coordinator and assistants were inadvertently placed under salaries
instead of purchased services. The ROE
noted that this was corrected immediately and an amended budget was sent to
the Illinois State Board of Education. In addition, the ROE noted that contracts
were developed and timesheets are collected regularly. AUDITORS’
OPINION Our auditors state the Regional Office of Education #56’s financial statements as of June 30, 2008 are fairly presented in all material respects. _____________________________________ WILLIAM
G. HOLLAND, Auditor General WGH:KJM SPECIAL ASSISTANT AUDITORS Our
special assistant auditors were E.C. Ortiz & Co., LLP, Certified Public
Accountants. |