FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
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 #46 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the mandate is outdated and that they are satisfying the intent of the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) also
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 schools. This mandate
has existed in its current form since at least 1953.
The Regional Office of Education #46 performs
compliance inspections for each public school in his region on a rotational
basis every three years instead of annually. The Illinois Public School Accreditation
Process Compliance Component document completed at these visits includes many
of the items delineated in 105 ILCS 5/3-14.5, but does not include a review
of the methods of instruction and the textbooks used in the district.
Finally, the Illinois School Code (105 ILCS 5/3-5)
requires the Regional Superintendent to present under oath or affirmation to
the county board at its meeting in September and as nearly quarterly
thereafter as it may have regular or special meetings, a report of all his
acts as county superintendent, including a list of all the schools visited
with the dates of visitation. This
mandate has existed in its current form since at least 1953.
The Regional Office of Education #46 did
not present at the September county board meeting, and as nearly quarterly
thereafter, a report of all his acts including a list of all the schools
visited and dates of visitation. The
Regional Superintendent presents at the county board meeting annually, not
quarterly. (Finding 06-1, pages 12-14)
The
Regional Office of Education #46 accepted the recommendation to comply with
the statutory requirements. The
Regional Office responded that with regards to compliance with 105 ILCS
5/3-14.11 and 105 ILCS 5/3-14.5, the Illinois Association of Regional Superintendents
of Schools and the Illinois State Board of Education have agreed to seek
legislation to remove duplicative and/or obsolete sections of the Illinois
School Code. Both parties believe that
105 ILCS 5/3-7 of the Illinois School Code and 23 Ill. Adm. Code 1.20,
respectively, contain more current, thorough, and comprehensive requirements
concerning a public school district’s financial transactions and visitation
of public schools by the Regional Superintendent. As a result, the two parties working together
will seek legislation to repeal these two sections of the Illinois School
Code.
With
regards to 105 ILCS 5/3-5, the Regional Superintendent will present the
affirmed report on a quarterly basis.
INACCURATE
EXPENDITURE REPORT
The
Regional Office of Education #46 included $2,151 of expenses related to the
2005 Truants Alternative and Optional Education grant on the 2006 grant
expenditure report. Consequently, the
expenditure report submitted did not accurately reflect the activity of the
period. (Finding 06-2, page 15) This finding was first reported in 2003.
The Regional Office of Education #46
accepted the recommendation, stating it will review expenditure reports and
their supporting documentation prior to their filing. (For previous Regional Office response, see
Digest Footnote #1.)
IMPROPER EXPENDITURE CLASSIFICATION
The Program
Accounting Manual and Regional
Office of Education Accounting Manual requires expenditures to be
identified by function account code and object account code. Generally Accepted Accounting Principles
require the recognition and reporting of revenues and expenditures
separately.
The Regional Office of Education #46
recorded all expenditures of the Identix Fingerprinting Fund as a debit to
revenue accounts instead of being recorded as expenditures. As a result, revenues and expenditures for
the affected fund were understated by $4,550; however, the net effect is
zero. (Finding 06-3, page 16)
The Regional Office of
Education #46 accepted the recommendation stating it will implement the
system of accounts promulgated by the Illinois State Board of Education as
required by the Illinois Administrative Code and by the ROE Accounting
Manual.
INACCURATE RECONCILIATION OF POOLED CASH
ACCOUNT
The Regional
Office of Education #46 maintains a pooled cash account for many of their
funds. The total of the transactions
within the funds was not equal to the reconciled cash account by
$10,141. When a pooled cash account is
maintained, the total of the cash in each fund combined should be in
agreement with the total of all the transactions. The Regional Office of Education was not
reconciling the total cash among all pooled cash accounts funds monthly. (Finding 06-4, page 17)
The
Regional Office of Education #46 accepted the recommendation stating the
pooled cash account funds will be reconciled on a monthly basis which will
correct the situation in the future.
The accounting software will also be replaced beginning July 1, 2007.
UNDERCOLLATERALIZATION OF BANK ACCOUNTS
The Public Funds Deposit 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 #46’s name. 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.
The
Regional Office of Education #46 did not have sufficient collateral in place
to insure their cash balances against possible loss. At year end, $18,675 of the Regional Office
of Education #46’s bank balance of $1,125,021 was exposed to custodial credit
risk. (Finding 06-5, page 18)
The
Regional Office of Education #46 accepted the recommendation, stating it will
monitor its bank balances on a monthly basis to make sure there is adequate
collateralization to protect its cash and investments from potential loss.
AUDITORS’ OPINION
Our auditors state
the Regional Office of Education #46’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 Clifton
Gunderson LLP.
DIGEST
FOOTNOTES
#1: INACCURATE EXPENDITURE
REPORT--Previous Regional Office Response
In its prior response in 2005, the Regional Office accepted the finding and stated
they will amend the expenditure report to accurately reflect the grant
activity.
Complete
Regional Office responses to prior findings are available upon request from
the Auditor General’s Office.
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