REPORT DIGEST

ILLINOIS STATE BOARD OF EDUCATION

FINANCIAL AUDIT
For the One Year Ended: June 30, 2011

Release Date:  May 24, 2012

Summary of Findings:
Total this audit: 1
Total last audit:  1
Repeated from last audit: 0

State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, 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


INTRODUCTION

This report covers our audit of the financial statements
of the Illinois State Board of Education for the year
ended June 30, 2011.  A compliance examination will be
performed for the two years ended June 30, 2012.

SYNOPSIS

• The Agency did not identify or prevent material
misstatements in financial reporting.

FINDING, CONCLUSION, AND RECOMMENDATION

FINANCIAL ADJUSTMENTS

The Agency did not identify or prevent material
misstatements in the Generally Accepted Accounting
Principles Reporting Package or the draft financial
statements.

• The Agency misstated fiscal year 2011 liabilities by
$58.5 million and the beginning balance of nonmajor
funds by $22.5 million due to improper liability
recognition for grants.

• The assigned fund balance of $2.1 million for one fund
was presented as restricted net assets in the financial
statements instead of unrestricted net assets due to
errors in implementation of a new accounting standard.

The Agency subsequently made the necessary adjustments
in the financial statements to properly record
transactions. (Finding 1, Pages 38-39)

We recommended the Agency review its current process for
preparation and review of the annual financial
statements as well as its policies and procedures for
liability measurement and implementation of new
accounting standards to ensure that financial
information is complete and accurate.

Board management concurred with the finding.  Management
stated the Agency will review its current process for
financial statement preparation as well as develop and
employ a new methodology to ensure the proper liability
measurement & recognition for financial reporting.

AUDITOR’S OPINION

Our special assistant auditor stated that the Agency’s
financial statements of the governmental activities, the
major fund, and the aggregate remaining fund information
of the Agency, as of and for the year ended June 30,
2011, are fairly stated in all material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:lkw

AUDITORS ASSIGNED

Our special assistant auditor for this engagement was
E.C. Ortiz & Co., LLP.