REPORT DIGEST

REGIONAL OFFICE OF EDUCATION # 3

BOND, FAYETTE AND EFFINGHAM COUNTIES

FINANCIAL AUDIT

For the Year Ended:
June 30, 2002

Summary of Findings:

Total this audit 9
Total last audit 10
Repeated from last audit 7

Release Date:
February 6, 2003

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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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646
This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

  • Regional Office of Education # 3 does not maintain a General Fixed Asset Account Group as required by generally accepted accounting principles. Because this account group was omitted, the Regional Office of Education # 3 received a qualified opinion on their general-purpose financial statements.
  • Not all of the expenditures from Regional Office of Education # 3 are under the disbursement controls and financial reporting of the ROE.
  • Regional Office of Education # 3 did not maintain appropriate internal controls over cash receipts, disbursements and purchases, and payroll.

 

 

 

{Expenditures and Activity Measures are summarized on the reverse page.}

 

REGIONAL OFFICE OF EDUCATION # 3
BOND, FAYETTE AND EFFINGHAM COUNTIES
FINANCIAL AUDIT
For The Year Ended June 30, 2002

FY 2002

FY 2001

TOTAL REVENUES

1$1,610,287

$1,345,570

Local sources

$449,212

$432,979

% of Total Revenues

27.90%

32.18%

State Sources

1$1,130,482

$903,981

% of Total Revenues

70.20%

67.18%

Federal Sources

$30,593

$8,610

% of Total Revenues

1.90%

.64%

TOTAL EXPENDITURES

1$1,605,182

$1,322,454

Salaries and Benefits

1$1,020,668

$799,508

% of Total Expenditures

63.59%

60.46%

Purchased Services

$455,978

$385,201

% of Total Expenditures

28.41%

29.13%

All Other Expenditures

$128,536

$ 137,745

% of Total Expenditures

8.01%

10.42%

COST OF PROPERTY AND EQUIPMENT

2

2

Note: Fiscal Year 2001 data was obtained from audits of ROEs conducted under the direction of the Illinois State Board of Education.
1 Fiscal Year 2002 amounts include on-behalf payments ($166,035). These on-behalf payments were not included in Fiscal Year 2001.
2 Financial statement opinion was qualified due to omission of Statement of General Fixed Assets.
* Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT
During Audit Period: Honorable Delbert Maroon
Currently: Honorable Delbert Maroon
 

 

 

 

Regional Office of Education #3 did not maintain a General Fixed Asset Account Group

 

 

 

 

 

 

Expenditures from the ROE’s funds should be under the disbursement controls and financial reporting of the ROE

 

 

 

 

 

 

 

 

 

 

Regional Office of Education #3 did not maintain adequate internal controls over cash receipts, disbursements and purchases, and payroll.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

NO GENERAL FIXED ASSET ACCOUNT GROUP

Regional Office of Education #3 does not maintain adequate records to account for all fixed assets. Generally Accepted Accounting Principles require that entities maintain a General Fixed Asset Account Group. Because the Regional Office of Education # 3 omitted this account group, the audit opinion on the general-purpose financial statements was qualified (Finding 02-5, pages 19 and 20).

The Regional Office of Education # 3 accepted the recommendation to ensure that all fixed assets are inventoried according to source of funds and recorded at cost and tagged with serial numbers. The ROE also agreed to adopt a capitalization threshold policy.

DECENTRALIZED ACCOUNTING

The Regional Office of Education #3 is a three county ROE. By statute the Regional Office of Education #3 is a separate entity under the financial oversight of the Illinois State Board of Education. The three counties that make up the Regional Office of Education #3 directly pay various expenses on behalf of the ROE. Reasonable accounting practices require centralized accounting records (Finding 02-6, page 21).

The Regional Office of Education #3 accepted the recommendation to prepare a budget of anticipated expenses to be paid through county support. Each county would remit its proportionate share of support directly to the ROE. Expenditures from the funds would then be under the general disbursement controls and financial reporting of the Regional Office of Education #3. The ROE is waiting on approval from one county.

LACK OF INTERNAL CONTROLS

The Regional Office of Education #3 did not maintain appropriate internal controls over the following accounting functions:

Cash receipts;
Disbursements and purchases; and
Payroll.

Generally accepted auditing standards require management to maintain adequate internal controls.

Regional Office of Education #3 is not immediately endorsing checks "for deposit only" when opening the mail, mail receipts are not listed by the person opening the mail and then subsequently comparing the list to the deposit, and cash receipts are deposited monthly and are kept in an unlocked drawer (Finding 02-1, pages 13 and 14).

Regional Office of Education #3’s purchasing procedures also lack certain controls. Purchase orders are not used consistently. Invoices are not mark "paid" when paid. Statements are not marked "statement" to prevent duplicate payment. Finally, evidence of receipt of goods in accordance with the ROE’s needs and instructions are not maintained (Finding 02-3, pages 16 and 17).

Regional Office of Education #3’s controls over payroll lack procedures for maintenance of time cards for hourly employees. The ROE should ensure that all employees paid by either days or hours submit signed timesheets. Signed timesheets would prevent payment for hours not worked (Finding 02-4, page 18).

The Regional Office of Education # 3 accepted the recommendation to implement the above mentioned controls over cash receipts, purchases, and payroll to prevent unauthorized transactions and loss of resources.

AUDITORS’ OPINION

Our auditors state the Regional Office of Education # 3’s financial statements as of June 30, 2002 are fairly presented in all material respects except for the effect of the omission of the General Fixed Asset Account Group. The General Fixed Asset Account Group should be included in order to conform with generally accepted accounting principles.

 

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WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Kemper CPA Group LLP.