REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #46
BROWN/CASS/MORGAN/SCOTT COUNTIES

FINANCIAL AUDIT
For the Year Ended: June 30, 2012


Release Date:   June 19, 2013

Summary of Findings:
Total this audit: 1
Total last audit:  2
Repeated from last audit: 1

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 #46 did not have
sufficient internal controls over the financial
reporting process.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT PREPARATION

The Regional Office of Education #46 is required to
maintain a system of controls over the preparation of
financial statements in accordance with generally
accepted accounting principles (GAAP).  Regional Office
internal controls over GAAP financial reporting should
include adequately trained personnel with the knowledge
and expertise to prepare and/or thoroughly review GAAP
based financial statements to ensure that they are free
of material misstatements and include all disclosures as
required by the Governmental Accounting Standards Board
(GASB).

The Regional Office of Education #46 did not have
sufficient internal controls over the financial
reporting process.  The Regional Office maintains its
accounting records on the cash basis of accounting.
While the Regional Office maintains controls over the
processing of most accounting transactions, there are
not sufficient controls over the preparation of the GAAP
based financial statements for management or employees
in the normal course of performing their assigned
functions to prevent or detect and correct financial
statement misstatements and disclosure omissions in a
timely manner.  Auditors, in their review of the
Regional Office’s accounting records, noted adjustments
that were required to present financial statements in
accordance with generally accepted accounting
principles.

Managements’ review process did not effectively detect
all of the adjustments needed to present the financial
statements in accordance with generally accepted
accounting principles. (Finding 12-1, pages 10-11) This
finding was first reported in 2007.

Auditors recommended that as part of internal control
over the preparation of its financial statements,
including disclosures, the Regional Office of Education
#46 should implement a comprehensive preparation and/or
review procedure to ensure that the financial
statements, including disclosures, are complete and
accurate.  Such procedures should be performed by a
properly trained individual(s) possessing a thorough
understanding of applicable generally accepted
accounting principles, GASB pronouncements, and
knowledge of the Regional Office of Education’s
activities and operations.

The Regional Office of Education #46 responded that it
has made great strides in improving its accounting
practices and procedures.  The Regional Office noted
that it continues to improve its system in an effort to
meet the necessary, ever-changing audit requirements.
The Regional Office also noted that it is not
financially able to hire a full-time CPA or retain one
on a regular basis to complete financial statements as
defined by the requirements.  (For previous Regional
Office response, see Digest Footnote #1.)

AUDITORS’ OPINION

Our auditors state the Regional Office of Education
#46’s financial statements as of June 30, 2012 are
fairly presented in all material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:KJM

AUDITORS ASSIGNED:  Winkel, Parker & Foster, CPA PC were
our special assistant auditors.

DIGEST FOOTNOTE

#1: Controls Over Financial Statement Preparation -
Previous Regional Office Response

In its prior response in 2011, the Regional Office of
Education #46 responded that it has made great strides
in improving its accounting practices and procedures.
The Regional Office noted that it continues to improve
its system in an effort to meet the necessary, ever-
changing audit requirements.  The Regional Office also
noted that it is not financially able to hire a full-
time CPA or retain one on a regular basis to complete
financial statements as defined by the requirements.