REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #35
LASALLE COUNTY

FINANCIAL AUDIT
For the Year Ended: June 30, 2015

Release Date:  March 17, 2016

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 0

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

• (15-1) The Regional Office of Education
#35 did not have sufficient internal
controls over the financial reporting
process.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The LaSalle County Regional Office of
Education #35 is required to maintain a
system of controls over the preparation of
financial statements in accordance with
generally accepted accounting principles
(GAAP).  The Regional Office of Education
#35'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).

The Regional Office of Education #35 did
not have sufficient internal controls over
the financial reporting process in order
to record and present the pension
information in accordance with these
standards. The Regional Office maintains
its accounting records on cash basis
accounting during the fiscal year and
posts year-end accrual and other
applicable entries for financial statement
purposes. While the Regional Office
maintains controls over the processing of
most accounting transactions and prepares
its financial statements, there were 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.

Through inquiries and discussions with the
ROE’s accounting personnel and Regional
Superintendent, auditors noted the ROE did
not have adequate controls to record and
report the ROE’s net accrued pension
liabilities/assets, deferred outflows of
resources, deferred inflows of resources
and pension expenses in accordance with
GAAP.  (Finding 2015-001, pages 11-12)

According to Regional Office management,
the complex requirements of GASB
Statements No. 68 and No. 71 were new for
fiscal year 2015 and will require
additional time and training before the
ROE can fully implement the requirements
on its own.

The auditors recommended that, as part of
its internal control over the preparation
of financial statements, the Regional
Office of Education #35 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.

The Regional Office of Education #35
agreed with the finding.  The ROE
responded their bookkeeper had made
numerous inquiries of the auditors and the
auditors worked with the bookkeeper in
order for her to more fully understand the
intricacies of GASB Statements No. 68 and
71 and their impact on the ROE’s financial
statements.  In addition, the bookkeeper
will be provided additional training and
support as necessary for applying the
requirements of GASB Statements No. 68 and
No. 71 in future years.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #35’s financial statements as of
June 30, 2015 are fairly presented in all
material respects.

FRANK J. MAUTINO
Auditor General

FJM:KJM


AUDITORS ASSIGNED:  Borschnack, Pelletier
& Co. were our special assistant auditors.