REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #17
DEWITT, LIVINGSTON, LOGAN AND MCLEAN
COUNTIES

FINANCIAL AUDIT (IN ACCORDANCE WITH THE
UNIFORM GUIDANCE)
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  June 14, 2023

FINDINGS THIS AUDIT: 2

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

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

• (22-1) The Regional Office of
Education #17 did not have sufficient
internal controls over the financial
reporting process.

• (22-2) The Regional Office of
Education #17 did not have sufficient
internal controls over the preparation
of the Schedule of Expenditures of
Federal Awards (SEFA).

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

DELAY OF AUDIT

The Regional Office of Education #17
(ROE) did not have sufficient internal
controls over the financial reporting
process. During review of the ROE’s
financial information, it was noted the
ROE did not have sufficient internal
controls over the financial reporting
process to ensure financial statement
transactions were accurately reported.
Auditors noted that additions from
State sources from the Illinois
Comptroller and the deductions for
flow-through payments to school
districts were overstated by $506,565.

The ROE subsequently revised its
financial statements to correct those
errors.

The School Code (105 ILCS 5/2-3.17a)
allows a Regional Office of Education
or Educational Service center to
utilize a cash basis, modified cash
basis, or generally accepted accounting
principles (GAAP) basis of accounting
to prepare financial statements for
audit. The ROE has chosen to utilize
the modified cash basis of accounting
for financial reporting.

The ROE is required to maintain a
system of controls over the preparation
of financial statements in accordance
with its selected basis of accounting.
The ROE’s internal controls over
financial reporting should include
adequately trained personnel with the
knowledge and expertise to prepare and/
or thoroughly review financial
statements to ensure that they are free
of material misstatements and include
all disclosures as required by the
Governmental Accounting Standards Board
(GASB).

Regional Office management indicated
this was an oversight. (Finding 22-001,
pages 15 – 16)

The auditors recommended the ROE should
implement comprehensive preparation
and/or review procedures as part of its
internal control over the preparation
of financial statements to ensure the
financial statements, including
disclosures, are complete and accurate.
These procedures should be performed by
a properly trained individual(s)
possessing a thorough understanding of
the basis of accounting selected for
financial statements, GASB
pronouncements, and knowledge of the
ROE’s activities and operations.

ROE Response: The ROE will work with
their contracted accounting firm to
receive the draft financial statements
earlier in order to allow additional
review time before they are due for
audit.

CONTROLS OVER THE PREPARATION OF THE
SCHEDULE OF EXPENDITURES OF FEDERAL
AWARDS

During review of the Regional Office of
Education #17’s (ROE) Schedule of
Expenditures of Federal Awards (SEFA),
it was noted the ROE did not have
sufficient internal controls over the
preparation of the SEFA to ensure all
federal expenditures during the fiscal
year were reported in the SEFA and
information in the SEFA was accurately
reported.

The ROE is required to maintain a
system of controls over the preparation
of the SEFA. The ROE’s internal
controls over SEFA preparation should
include adequately trained personnel
with the knowledge and expertise to
prepare and/or thoroughly review the
SEFA to ensure that it is free of
material misstatements and includes all
disclosures as required by federal
guidelines.

Auditors noted the following in the
originally submitted SEFA they
reviewed:

• Federal awards received related to
Assistance Listing Number 97.036,
Disaster Grants – Public Assistance
(Presidentially Declared Disasters)
amounting to $36,183 was not reported
as federal revenues in the financial
statements and was not reported in the
SEFA, including the required
disclosures for this federal program.
• Assistance listing Number 84.411,
Education Innovation and Research, was
not accurately reported for the direct
award amount and the pass-through
entity name and amount received as a
subrecipient.
• The ROE converted from accrual basis
to modified cash basis in Fiscal Year
2022, but the notes to SEFA did not
include a disclosure of the change in
reporting basis as well as the programs
affected by the change and the related
amounts reported in the current year
SEFA versus the amounts reported in the
financial statements.

The ROE subsequently revised its SEFA
to correct these errors.

The Regional Office management
indicated this was an oversight.
(Finding 22-002, pages 17 – 18)

The auditors recommended the ROE should
implement comprehensive preparation
and/or review procedures as part of its
internal control over the preparation
of the SEFA to ensure the SEFA,
including disclosures, are complete and
accurate. These procedures should be
performed by a properly trained
individual(s) possessing a thorough
understanding of the applicable federal
guidelines and knowledge of the ROE’s
grant programs and activities.

ROE Response: The ROE will work with
their contracted accounting firm to
receive the draft financial statements
earlier in order to allow additional
review time before they are due for
audit.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #17’s financial statements
as of June 30, 2022 are fairly
presented 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:BAO