REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #41:
MADISON COUNTY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  August 16, 2023

FINDINGS THIS AUDIT: 2

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

FINDINGS LAST AUDIT: 2

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

• (22-1)  The Regional Office of
Education #41 did not provide completed
financial statements in an auditable
form by the August 31 deadline.

• (22-2)  The Regional Office of
Education #41 did not have sufficient
internal controls over the financial
reporting process.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

DELAY OF AUDIT

The Regional Office of Education #41
(ROE) did not provide completed
financial statements in an auditable
form by the August 31, 2022 deadline.
The financial statements were provided
on October 11, 2022.

The ROE is subject to 105 ILCS
5/2-3.17a which requires the Auditor
General’s office to cause an audit to
be made, as of June 30th of each year,
of the financial statements of all
accounts, funds and other moneys in the
care, custody or control of the
regional superintendent of schools of
each educational service region in the
State and of each educational service
center established in the School Code.
The audit is to be conducted in
accordance with Generally Accepted
Government Auditing Standards. The
Regional Office of
Education or Educational Service Center
may utilize a cash basis, modified cash
basis or generally accepted accounting
principles (GAAP) basis of accounting
to prepare the financial statements for
audit.

In accordance with 105 ILCS 5/2-3.17a,
the Auditor General has promulgated
administrative rules and regulations to
govern this process. Those rules, 74
Ill. Adm. Code 420.320 (c) (2), state
that for audit purposes, each regional
office of education and educational
service center shall make available to
the Auditor General or his designee all
books and records deemed necessary to
make and complete the required audits.
The records shall be in auditable form
by August 15 of the succeeding fiscal
year. Financial reports are to be
available no later than August 31 in
order for the annual audit to be
completed by an independent auditor
selected by the Auditor General.

In addition, prudent business practices
and transparency require timely
preparation and completion of financial
statements.

Regional Office management indicated
the conversion from GAAP to the
modified cash basis combined with the
transition to outsourced financial
statement preparation resulted in
delays. (Finding 22-001, pages 10 – 11)

The auditors recommended the ROE should
implement procedures to ensure
compliance with 105 ILCS 5/2-3.17a and
74 Ill. Adm. Code 420.320 (c) (2).
These financial statements need to be
presented to the Auditor General’s
independent auditors for audit by the
August 31 deadline.

ROE Response: The office has made our
external accounting consultants aware
of the deadline for this activity and
will be a part of the engagement going
forward.

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #41
(ROE) did not have sufficient internal
controls over the financial reporting
process. In the course of restating
beginning net position in the
Technology PD fund to convert from
accrual to modified cash basis
accounting, the ROE made an error
resulting in the understatement of
current year revenues and the
overstatement of beginning net position
by $47,151.

Statement of Auditing Standards (SAS)
No. 115, Communicating Internal Control
Related Matters Identified in an Audit,
focuses on deficiencies in internal
control over financial reporting. This
SAS states that “identification by the
auditor of a material misstatement of
the financial statements under audit in
circumstances that indicate that the
misstatement would not have been
detected by the entity’s internal
control” is an indicator of a weakness
in internal control.

Regional Office management indicated
the error was a result of the change in
accounting basis and is not a recurring
issue. The effect of the eliminations
of accrual balances from beginning fund
level equity was not calculated and
restated properly for the Technology PD
fund. (Finding 22-001, page 12)

The auditors recommended the ROE should
implement comprehensive review
procedures as part of its internal
control over the preparation of
financial statements to ensure the
financial statements, including
disclosures, are complete and accurate.
These procedures should be performed by
a properly trained individual
possessing a thorough understanding of
the modified cash basis of accounting
and knowledge of the ROE’s activities
and operations.

ROE Response: The closing of this fund
has taken place and all audit
adjustment entries will be made.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #41’s financial statements
as of June 30, 2021 are fairly
presented in all material respects.

This financial audit was conducted by
the firm of GW & Associates PC.

JOE BUTCHER
Division Director

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

FRANK J. MAUTINO
Auditor General

FJM:JRB