REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #4: BOONE AND
WINNEBAGO COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED June 30, 2021

Release Date:  October 15, 2025

FINDINGS THIS AUDIT: 3

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

FINDINGS LAST AUDIT: 4

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

• (21-1)  The Regional Office of Education
#4 had inadequate controls over receipts.

• (21-2)  The Regional Office of Education
#4 had inadequate controls over the bank
reconciliation process.

• (21-3)  The Regional Office of Education
#4 did not provide completed financial
statements in an auditable form by the
August 31 deadline.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE INTERNAL CONTROL OVER RECEIPTS

The Regional Office of Education #4 (ROE)
had inadequate controls over receipts.
During testing of receipts, auditors noted
the following:

• 15 of 40 receipts tested (38%), totaling
$105,675, had no documentation when the
checks were received. As a result, we were
unable to determine whether non-electronic
cash receipts were deposited in a timely
manner.

• 3 of 40 receipts tested (8%) totaling
$265, did not have any supporting
documentation.

Sound internal controls require a policy on
timeliness of deposits, either based on
dollar threshold or defined timeframe, from
the date of receipt. There should be
documentation of the date when cash and
checks are received. Supporting
documentation should be maintained for
receipt transactions.

ROE officials indicated the exceptions noted
above relate primarily to miscellaneous
receipts (principally those received non-
electronically) and not necessarily all cash
receipts. The exceptions noted were due
primarily to oversight.  (Finding 2021-001,
pages 11-12) This finding was first reported
in 2019.

The auditors recommended ROE 4 should
maintain adequate documentation to ensure
cash receipts are deposited in a timely
manner and receipts are properly supported.

ROE Response:  When this matter was called
to management’s attention in May 2024 (as
part of the audit of fiscal year 2019),
management promptly implemented improved
procedures regarding miscellaneous cash
receipts including improved documentation
and standards for prompt deposit to the
bank. We believe our improved procedures
have addressed the concerns of this finding.

INADEQUATE CONTROLS OVER BANK RECONCILATION
PROCESS

The Office of Education #4 (ROE) had
inadequate controls over the bank
reconciliation process.

The ROE maintains 16 bank accounts. Auditors
tested 4 of 16 (25%) bank accounts and
reviewed their monthly reconciliations and
noted the following:

• 29 of 48 (60%) monthly bank
reconciliations were missing the date of
when the reconciliation was prepared,
therefore we were unable to determine if the
bank reconciliation was prepared timely.

Effective internal control policies require
complete and accurate accounting records of
all transactions of the entity. Sound
internal controls require bank
reconciliations to be performed accurately
and promptly, no later than the end of the
following month. Reconciling items should be
investigated immediately, and adjustments
made to the general ledger. Bank
reconciliations should also be reviewed and
approved by a person independent of the
preparer in a timely manner.

ROE officials indicated the exceptions noted
above were due to the volume of accounts,
and lack of sufficient staff. (Finding
2021-002, pages 13-14) This finding was
first reported in 2019.

The auditors recommended the ROE should
prepare monthly bank reconciliations no
later than the end of the following month.

ROE Response: The ROE has taken steps to
reduce the number of cash bank accounts
necessary for the organization and has also
placed a higher priority on the timely
completion of monthly bank reconciliations.
When this matter was called to management’s
attention in May 2024 (as part of the audit
of fiscal year 2019), management took prompt
steps to assure that all bank
reconciliations since that time were begun
timely, and to assure that all reconciling
items were identified by the end of the
following month. In most cases, all
reconciling items are also resolved in that
timeframe or shortly thereafter. This allows
for timely final completion of the bank
reconciliations.

DELAY OF AUDIT

The Regional Office of Education #4 (ROE)
did not provide completed financial
statements in an auditable form by the
August 31st deadline. The June 30, 2020,
audit was not released until March 26, 2025.
The completed June 30, 2021, financial
statements were provided to auditors on May
30, 2025.

The ROE is subject to 105 ILCS 5/2-3.17a
which requires the Auditor General’s office
to cause an audit to be made, as of June
30th of each year, of the financial
statements of all accounts, funds and other
moneys in the care, custody or control of
the regional superintendent of schools of
each educational service region in the State
and of each educational service center
established in the School Code. The audit is
to be conducted in accordance with Generally
Accepted Government Auditing Standards. The
ROE may utilize a cash basis, modified cash
basis, or generally accepted accounting
principles (GAAP) basis of accounting to
prepare the financial statements for audit.
The ROE has chosen the cash basis of
accounting for financial reporting.

In accordance with 105 ILCS 5/2-3.17a, the
Auditor General has promulgated
administrative rules and regulations to
govern this process. Those rules, 74 Ill.
Adm. Code 420.320 (c) (2), state that for
audit purposes, each regional office of
education and educational service center
shall make available to the Auditor General
or his designee all books and records deemed
necessary to make and complete the required
audits. The records shall be in auditable
form by August 15th of the succeeding fiscal
year. Financial reports are to be available
no later than August 31st in order for the
annual audit to be completed by an
independent auditor selected by the Auditor
General. In addition, prudent business
practices and transparency require timely
preparation and completion of financial
statements.

Regional Office officials indicated that the
initial delays that affected earlier years
related to internal personnel issues and
software program changes that caused the
office to experience difficulty in providing
information by the required timeline. Since
those initial causes have been largely
resolved, the ROE has experienced delays in
the preparation of the financial statements
and schedules which contributed to an
inability to get caught up. (Finding 21-003,
pages 15-16)  This finding was first
reported in 2016.

The auditors recommended that the ROE should
implement procedures to ensure compliance
with 105 ILCS 5/2-3.17a and 74 Ill. Adm.
Code 420.320 (c) (2). These financial
statements need to be presented to the
Auditor General’s independent auditors by
August 31st deadline.

ROE Response:  The ROE changed to the cash
basis of accounting (as was previously
recommended), which has simplified both the
financial statement presentation and the
process to prepare the financial statements
and schedules.  An outside Certified Public
Accounting firm continues to be engaged to
better prepare all financial statements and
schedules necessary for audit. Importantly,
the ROE has been actively pursuing an
accelerated schedule of past due audits so
that this matter may be fully resolved
without significant further delay. The
Illinois Auditor General has also been
cooperating with this accelerated schedule
of audits.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #4’s financial statements as of
June 30, 2021 are fairly stated in all
material respects.

This financial audit was conducted by the
firm of Adelfia, LLC.

JOE BUTCHER
Division Director

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

FRANK J. MAUTINO
Auditor General

FJM:JMM