REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #35: LASALLE,
MARSHALL AND PUTNAM COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2018

Release Date:  May 30, 2019

FINDINGS THIS AUDIT:  1

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

• (18-1) The Regional Office of Education
#35 failed to fully insure and
collateralize cash balances.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FAILURE TO FULLY INSURE AND COLLATERALIZE
CASH BALANCES

As of June 30, 2018, the Regional Office of
Education #35 (ROE) had four cash and
investment accounts with bank balances
totaling $928,766 at one financial
institution. The Federal Deposit Insurance
Corporation (FDIC) covers up to a maximum
of $250,000. The ROE had pledged securities
for an additional $607,107. The ROE did not
have depository insurance or collateral for
the remaining $71,659.

The Public Funds Deposit Act (30 ILCS
225/1) gives the ROE the authorization to
request financial institutions to pledge
collateral for deposits in excess of the
federally insured limit. In addition,
prudent business practice requires that all
cash and investments held by financial
institutions for the ROE be adequately
covered by depository insurance or
collateral.

According to ROE and financial institution
officials, as of June 30, 2018, the
financial institution considered the ROE
included under the umbrella of accounts for
LaSalle County, instead of its own separate
agency. In addition, the ROE failed to
monitor the sufficiency of the pledged
securities. (Finding 18-001, pages 11-12)

The auditors recommended the ROE should
monitor the bank balances on all accounts
and work with the financial institution to
provide collateral or enter into an
agreement with the financial institution to
have the cash balances monitored for
adequate collateral periodically and
adjusted as necessary.

ROE Response: The ROE plans to keep in
contact with the financial institution
regarding the amount of collateralization
and pledged securities. In addition, the
financial institution has implemented a new
collateralization system and procedure,
which will automatically raise and lower
the amount of pledged securities in
relation to the amount of dollars held in
the bank account.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #35’s financial statements as of
June 30, 2018 are fairly presented in all
material respects.

This financial audit was conducted by the
firm of Sulaski and Webb, CPAs.

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:BAO