REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #4: BOONE AND
WINNEBAGO COUNTIES

FINANCIAL AUDIT (IN ACCORDANCE WITH THE
UNIFORM GUIDANCE)
FOR THE YEAR ENDED JUNE 30, 2023

Release Date:  October 28, 2026

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: 3

State of Illinois, Office of the Auditor
General
CHRISTOPHER B. MEISTER, 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

• (23-1) The Regional Office of Education
#4 had inadequate control over receipts.

• (23-2) The Regional Office of Education
#4 had inadequate controls over the bank
reconciliation process.

• (23-3) 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 internal control over
receipts.  During testing of receipts,
auditors noted the following:

• 23 of 40 receipts tested (58%), totaling
$698,524, 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.

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.  (Finding 2023-001,
pages 14-15) This finding was first
reported in 2019.

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.

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 Regional Office of Education #4 (ROE)
maintains 10 bank accounts. We tested 3 of
10 (30%) bank accounts and reviewed their
monthly reconciliations and noted the
following:
• 5 of 36 (14%) monthly bank
reconciliations were prepared 7 to 26 days
late.

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 2023-002, pages 16-17) 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
required for the organization and has also
placed a very high 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 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, 2022
audit was not released until January 28,
2026. The completed June 30, 2023
financial statements were provided to
auditors on February 16, 2026.

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.

The ROE 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 Regional Office
of Education No. 4 has experienced delays
in the preparation of the financial
statements and schedules which contributed
to an inability to get caught up. (Finding
23-003, pages 18-19) This finding was
first reported in 2016.

The auditors recommended 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 for
audit by the August 31st deadline.

ROE Response:  Since the initial delays,
the ROE changed to the cash basis of
accounting (as had been previously
recommended).  This 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. This is the
fourth year of audited financial
statements to be completed and issued in
the most recent eighteen months. The
Illinois Auditor General has 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, 2023 are fairly stated in all
material respects.

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

TRICIA WAGNER
Division Director

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

CHRISTOPHER B. MEISTER
Auditor General

CBM:JRB