FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
UNRECORDED PAYABLES AND RECEIVABLES
The Regional Office of Education #41 did not properly record payables
and receivables for the current and prior year. Accordingly, the Regional Office of
Education’s general ledger did not agree to the audited financial statements. Adjusting entries were required as part of
the 2006 year end audit to account for the receivables, payables, and
deferred revenue at June 30, 2005 and 2006.
Accounting principles generally accepted in the United States of America
require government-wide financial statements to be prepared on the accrual
basis of accounting and the fund financial statements to be prepared on the
modified accrual basis of accounting.
(Finding 06-1, page 12) This
finding was first reported in 2003.
The Regional Office of Education #41 agreed with
the recommendation, noting it has hired an outside consultant to help train
responsible personnel to properly maintain its general ledger on a modified
accrual basis of accounting. (For
previous Regional Office response, see Digest Footnote #1.)
INACCURATE EXPENDITURE REPORTS FILED
The
Regional Office of Education #41’s expenditure report for one grant did not
agree with the actual amounts expended as shown on the general ledger,
resulting in difference of $36,788. Grant
expenditure reports filed with the State should agree to general ledger
totals. (Finding 06-2, page 13) This finding was first reported in 2003.
The
Regional Office accepted the recommendation stating it will file a corrected
expenditure report and return the unspent funds. They also stated that to prevent this from
happening in the future, instruction will be given to all program directors
that the expenditure reports filed with the granting agencies must be
reconciled with the general ledger prior to the final report being submitted.
(For previous Regional Office response, see Digest Footnote #2.)
INADEQUATE REVIEW OF JOURNAL ENTRIES
The Regional Office program
bookkeepers are able to enter general journal entries allocating expenditures
between various programs without proper review and approval. Adequate controls over compliance with
laws, regulations, contracts, and grant agreements require supervisory review
of expenditures charged to grant programs.
(Finding 06-3, page 14)
The Regional Office accepted the
recommendation and will develop a process to request, approve, and enter
general journal entries. In addition,
the Regional Superintendent, Assistant Regional Superintendent, or the Program
Director will review and approve all general journal entries with supporting
information and documentation prior to posting to the accounting
records.
CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS
The
Illinois School Code (105 ILCS 5/3-14.11) requires the Regional Superintendent
to examine at least once each year all books, accounts, and vouchers of every
school treasurer in his educational service region, and if he finds any
irregularities in them, to report them at once, as directed by the School
Code.
The Regional Office of Education #41 did not examine at least once
each year all books, accounts, and vouchers of every school treasurer in the
educational service region. Regional
Office officials noted they believe the mandate is outdated and that they are
satisfying the intent of the statute by other reviews they undertake. This mandate has existed in its current
form since at least 1953.
The Illinois School Code (105 ILCS 5/3-14.5) requires the Regional
Superintendent to visit each public school in the county at least once a
year, noting the methods of instruction, the branches taught, the textbooks
used, and the discipline, government and general condition of the
school. This mandate has existed in
its current form since at least 1953.
The Regional
Office of Education is visiting each public school at least once a year and
the methods of instruction, the branches taught, the discipline, government,
and general condition of the school are all noted. However, the textbooks used are not
noted. Regional Office officials
believe this mandate is outdated and stated that instruction is not driven by
textbooks but by State Standards. The
Regional Superintendent is active in seeing that teachers are familiar with
new methods of instruction through workshops organized by the Regional Office
of Education. (Finding 06-4, page 15-16)
The Regional Office responded that with
regards to compliance with 105 ILCS 5/3-14.11 and 105 ILCS 5/3-14.5, the Regional
Office of Education in conjunction with the Illinois Association of Regional
Superintendents is in the process of seeking a legislative solution to this
and other obsolete passages within the Illinois School Code.
AUDITORS’ OPINION
Our auditors state
the Regional Office of Education #41’s financial statements as of June 30,
2006 are fairly presented in all material respects.
_____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JRB
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors were J.W. Boyle
& Co., Ltd.
DIGEST
FOOTNOTES
#1: UNRECORDED PAYABLES AND RECEIVABLES MATERIAL TO FINANCIAL
STATEMENTS -- Previous Regional Office Response
In its prior response in 2005, the Regional Office
of Education #41 agreed with the recommendation, noting it has a new
accounting system that will allow it to properly maintain its general ledger
on a modified accrual basis. In
addition, training will be initiated for the personnel responsible for the
general ledger.
#2: INACCURATE EXPENDITURE REPORTS
FILED --
Previous Regional Office Response
In its prior response in 2005, the Regional Office accepted the recommendation
stating it will file a corrected expenditure report for the grant year ended
June 30, 2005 and will instruct all program directors that the expenditure
reports filed with the granting agencies must be reconciled with the general
ledger prior to the final report being submitted.
Complete Regional Office responses to prior findings are available
upon request from the Auditor General’s Office.
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