REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #41
MADISON COUNTY

FINANCIAL AUDIT
For the Year Ended:  June 30, 2013

Release Date:  July 10, 2014

Summary of Findings:
Total this audit: 1
Total last audit:  3
Repeated from last audit: 0

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 Full Report are also
available on the worldwide web at
www.auditor.illinois.gov

SYNOPSIS

• The Regional Office of Education #41 had
deposits at a financial institution that
exceeded FDIC coverage and did not timely
deposit 2 of 40 cash receipts tested.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER DEPOSITS AND RECEIPTS

The Public Funds Deposit Act (Act) (30 ILCS
225/1) gives the authorization for deposits in
excess of the federally insured limit to be
covered by pledged collateral held by the
financial institutions’ trust departments in
the Regional Office of Education #41’s name.

The Act also states that any treasurer or
other custodian of public funds may deposit
such funds in a savings and loan association,
savings bank or State or national bank in the
State.  When such deposits become collected
funds and are not needed for immediate
disbursement, they shall be invested within 2
working days at prevailing rates or better.

In addition, prudent business practice
requires that receipts be promptly deposited
in the bank and all cash and investments held
by financial institutions for the ROE #41 be
adequately covered by depository insurance or
collateral.

During review of the Regional Office of
Education #41’s deposits and cash receipts,
auditors noted the following:

• As of June 30, 2013, cash account balances
of six accounts with one bank totaled
$712,291.  The Federal Deposit Insurance
Corporation covers up to a maximum of
$250,000.  Additional collateral totaling
$428,774 was received as of June 30, 2013.  No
additional collateral was obtained for the
balance of $33,517.

• Two of 40 (5%) receipts, totaling $26,010,
were not deposited timely.  These checks were
deposited 5 to 14 days after receipt.

According to the Regional Office of Education
#41 management, inadequate collateral at
fiscal year end and untimely deposit of
receipts were due to oversight.  (Finding
2013-001, pages 11-12)

The auditors recommended that the Regional
Office of Education #41 should establish
controls for confirming amounts pledged by the
financial institution to ensure that all
deposits are adequately secured by collateral.
The Regional Office should ensure that
receipts are deposited promptly by developing
a formal deposit policy, which defines the
maximum amounts to be held for deposit and
minimizes the time elapsed between the receipt
of the funds and the deposit of the items.

The Regional Office of Education #42
management responded that it agrees with the
finding.  Additional monitoring procedures are
being performed to ensure adequacy of required
collateral coverage on bank deposits.  The ROE
stated that it also implemented changes in the
billing/collection process to ensure that
receipts are deposited in a timely fashion to
the bank.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #41’s financial statements as of
June 30, 2013 are fairly presented in all
material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:JRB

AUDITORS ASSIGNED:  E.C. Ortiz & Co., LLP were
our special assistant auditors.