REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #12: CLAY,
CRAWFORD, JASPER, LAWRENCE AND RICHLAND
COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED: JUNE 30, 2016

Release Date:  June 8, 2017

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: 2

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

• (16-1) The Regional Office of Education
#12 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 No. 12
(ROE) is required to maintain a system of
controls over the preparation of financial
statements in accordance with generally
accepted accounting principles (GAAP).
The ROE’s 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).

The ROE did not have sufficient internal
controls over the financial reporting
process in order to record and present the
pension information in accordance with
these standards.  The ROE maintains its
accounting records on the cash basis of
accounting during the fiscal year and
posts year-end accrual and other
applicable entries for financial statement
purposes. While the ROE maintains controls
over the processing of most accounting
transactions and prepares its financial
statements, there were not sufficient
controls over the preparation of the 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.

Through inquiries and discussions with the
ROE’s accounting personnel and Regional
Superintendent, auditors noted that 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 the ROE’s management, the
complex requirements of GASB Statements
No. 68 and No. 71 were new for fiscal year
2015 and will require additional time and
training before the ROE can fully
implement the requirements on its own.
(Finding 2016-001, pages 10-11)


The auditors recommended that as part of
internal control over the preparation of
financial statements, the ROE should
implement comprehensive preparation
procedures to ensure that 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.

The ROE acknowledged the finding for lack
of internal controls with financial
statement preparation in regards to GASB
68 and GASB 71. Due to the complex
requirements of these GASB statements, the
ROE was unable to get staff trained on
preparation of the required financial
statement disclosures.  The ROE will
attempt to correct this finding going
forward.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education No. 12’s financial statements as
of June 30, 2016 are fairly presented in
all material respects.

This financial report was conducted by the
firm of West and Company, LLC.

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