REPORT DIGEST
REGIONAL OFFICE OF EDUCATION #20
EDWARDS/GALLATIN/ HARDIN/POPE/SALINE/
WABASH/WAYNE/WHITE COUNTIES
FINANCIAL AUDIT
(In Accordance with the Single Audit Act and OMB Circular
A-133)
For the Year Ended: June
30, 2009
Summary of Findings:
Total this audit: 2
Total last audit : 0
Repeated from last audit: 0
Release Date: March 25, 2010
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 the Full Report are also available on
the worldwide web at http://www.auditor.illinois.gov
SYNOPSIS
• The
Regional Office of Education #20 did not have sufficient internal controls over
disbursements and receipts.
• The
Regional Office of Education #20 did not have sufficient internal controls over
the financial reporting process.
FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
INTERNAL CONTROL OVER DISBURSEMENTS AND RECEIPTS
The Regional
Office of Education #20 did not have sufficient internal controls over
disbursements and receipts. The Regional
Superintendent of Schools is responsible for establishing and maintaining an
internal control system over disbursements and receipts to prevent errors and
fraud.
During
testing of internal controls, auditors noted that the Regional Superintendent
did not review bank reconciliations once they are completed. Lack of proper review of the various
accounting processes could result in unintentional or intentional errors or
misappropriations of assets, in which the errors or fraud could be material to
the financial statements and may not be detected in a timely manner by
employees in the normal course of performing their assigned duties. (Finding
09-1, page 12a)
Auditors
recommended that as part of its internal control over disbursements and
receipts, the Regional Superintendent should receive the bank statements
unopened, review them, and also review the bank reconciliations once they have
been completed.
The Regional
Office of Education #20 responded that management now opens the bank statements
and reviews them before the accounting staff prepares the bank
reconciliations. Management also reviews
all bank reconciliations monthly and initials all bank statements and bank
reconciliations to confirm that they have been reviewed.
INTERNAL CONTROL OVER FINANCIAL REPORTING
The Regional
Office of Education #20 did not have sufficient internal controls over the
financial reporting process. The
Regional Office of Education #20 is required to maintain a system of controls
over the preparation of financial statements in accordance with generally
accepted accounting principles (GAAP).
While the
Regional Office maintains controls over the processing of most accounting
transactions, there are 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. For example, auditors, in their review of the
Regional Office’s accounting records noted numerous adjusting entries were
required to present the financial statements in accordance with generally
accepted accounting principles.
The Regional
Office has not developed proper internal control procedures over the
performance of assigned functions to prevent or detect financial statement
misstatements in a timely manner. (Finding 09-2, page 12b)
The auditors
recommended that, as part of its internal control over the financial reporting,
the Regional Office of Education #20 should implement procedures to ensure that
the financial statements are completed in a timely manner.
The Regional
Office of Education #20 responded that management will assign another existing
staff person to assist with certain fiscal responsibilities and with the
implementation of a new monthly accounting schedule, accounting personnel
should be able to be current in the processing of financial statements.
AUDITORS’ OPINION
Our auditors
state the Regional Office of Education #20’s financial statements as of June
30, 2009 are fairly presented in all material respects.
WILLIAM G. HOLLAND, Auditor General
WGH:JRB
SPECIAL ASSISTANT AUDITORS
Our special
assistant auditors were Kemper CPA Group, LLC.