REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #32 IROQUOIS
AND KANKAKEE COUNTIES

FINANCIAL AUDIT (In Accordance with the 
Uniform Guidance)
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  July 11, 2018

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: 3

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

• (17-1) The Regional Office of Education
#32 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 #32 (ROE)
did not have sufficient internal controls
over the financial reporting process. The
ROE maintained its accounting records on
the cash basis of accounting during the
fiscal year and posted year-end accrual
entries for financial statement purposes.
While the ROE maintained controls over the
processing of most accounting transactions,
there were not sufficient controls over the
preparation of generally accepted
accounting principles (GAAP) based
financial statements and the Schedule of
Expenditures of Federal Awards 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.

The ROE is required to maintain a system of
controls over the preparation of financial
statements in accordance with 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).

Auditors, in their review of the ROE’s
accounting records, noted the following:

• The ROE did not have adequate controls
over the maintenance of complete records of
prepaid rent, due from other governments,
unearned revenue, and unavailable revenue.
While the ROE did maintain records to
indicate the balances of due from other
governments and unearned revenue, not all
entries were provide to properly report the
ROE’s balances and activity.
• Fund balances for various funds were not
properly recorded at year-end.
• The ROE did not have adequate controls to
record and report the ROE’s net pension
liabilities/assets, deferred outflows of
resources, deferred inflows of resources,
and pension expenses in accordance with
GAAP.
• All of the activity for one of the
internal service funds was netted to an
accounts receivable account rather than
recorded to the appropriate revenue and
expense accounts. All of the activity for
three of the agency funds were netted into
one liability account in each fund rather
than recorded to the appropriate revenue
and expense accounts in each fund.
• Numerous other adjustments were required
to present financial statements in
accordance with GAAP.

According to Regional Office officials, the
complex requirements of GASB statements
will require additional time and training
before the Regional Office can fully
implement the requirements on its own.
(Finding 17-001, pages 13 – 14)

This finding was first reported in 2010.

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.

ROE Response: In an attempt to correct this
finding, the Regional Office will send its
fiscal staff to various trainings to
improve knowledge and skills related to
GAAP, as well as current and anticipated
GASB reporting requirements.

Prior Year ROE Response: In an attempt to
correct this finding, the Regional Office
will send its fiscal staff to various
trainings to better understand accrual
accounting and reporting under GAAP.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #32’s financial statements as of
June 30, 2017 are fairly presented in all
material respects.

This financial audit was conducted by the
firm of West & Company, LLC.

KELLY MITTELSTAEDT
Audit Manager

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:JRB