REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #47: LEE,
OGLE, AND WHITESIDE COUNTIES

FINANCIAL AUDIT (IN ACCORDANCE WITH THE
UNIFORM GUIDANCE)
FOR THE TWO YEARS ENDED JUNE 30, 2017

Release Date:  October 28, 2020

FINDINGS THIS AUDIT:  3

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

FINDINGS LAST AUDIT: 3

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

• (17-1) The Regional Office of Education
#47’s salaries and benefits were not
supported by proper time and effort
documentation.

• (17-2) The Regional Office of Education
#47 lacked written policies for federal
grants.

• (17-3) The Regional Office of Education
#47 did not have adequate subrecipient
monitoring documentation.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

SALARIES AND BENEFITS NOT SUPPORTED BY
PROPER TIME AND EFFORT DOCUMENTATION

The Regional Office of Education #47
(ROE) allocated salary and benefit costs
to various federal and State grants based
on time and effort documentation; however
time and effort documentation is not
being approved by a supervisor to ensure
charges are accurate, allowable, and
properly allocated.

Employees of the ROE are required to
document their time and effort working on
federal and State programs. Title 2 U.S.
Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards (Uniform Guidance)
requires charges for salaries and
benefits to be supported by a system of
internal control which provides
reasonable assurance that charges are
accurate, allowable, and properly
allocated. It also requires that records
are used to support the distribution of
employees’ salaries and benefits among
specific activities if the employee only
works part of the time on a federal award
program. It further states that budget
estimates alone do not qualify as support
for salary and benefit charges to a
federal award.

The Illinois State Board of Education
(ISBE) State and Federal Grant
Administration Policy, Fiscal
Requirements and Procedures, requires
that auditable “time and effort”
documentation should be written, after
the fact (not estimated or budgeted)
documentation of how the time was spent.
Time and effort reports should be
prepared by any staff with salary charged
(1) directly to a federal award, (2)
directly to multiple federal awards, or
(3) directly to any combination of a
federal award or other federal, state or
local funds. Additionally, all time and
effort sheets and other supporting
documentation must be retained at the
local level and be available for review
or audit any time within three years
after termination of the project or until
the local entity is notified in writing
from ISBE that the records are no longer
needed for audit or review.

Regional Office management indicated this
was an oversight. (Finding 17-001, pages
14a – 14b)

The auditors recommended the ROE should
implement written policies and procedures
over time and effort reporting to ensure
proper documentation is being obtained
and/or maintained in all instances to
properly distribute salary and benefit
costs for employees who work in whole or
in part on grant program activity in
accordance with the Uniform Guidance and
the ISBE State and Federal Grant
Administration Policy, Fiscal
Requirements and Procedures. This would
include having the documentation reviewed
and formally approved by a supervisor.

ROE Response: Management agrees with the
finding.

LACK OF WRITTEN POLICIES FOR FEDERAL
GRANTS

The Regional Office of Education #47
(ROE) did not have written procedures
concerning cash management, the
determination of allowability of costs in
accordance with Subpart E – Cost
Principles of the Uniform Administrative
Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform
Guidance) and the terms and conditions of
the federal award. In lieu of written
procedures, the ROE utilized informal
procedures in which each purchase made or
cost allocated to the IDEA – Improvement
Grant – Part D was reviewed for
allowability by an individual with
knowledge of the budget, allowable costs
and activities, and the cash management
requirements. The allowability
determinations were based on the amounts
included in the budgets for the IDEA –
Improvement Grant – Part D approved by,
and the grant periods set by, the
Illinois State Board of Education (ISBE).

The Uniform Guidance, contained in 2 CFR
Part 200, became effective for all
federal award programs administered by
the ROE that were issued on or after
December 26, 2014. Specifically, the
Uniform Guidance (2 CFR 200.302(b)(7))
requires the ROE to have written
procedures related to cash management and
for determining the allowability of costs
in accordance with Subpart E – Cost
Principles of the Uniform Guidance and
the terms and conditions of the federal
award.

Regional Office management indicated they
were unable to dedicate the time needed
to fully implement the Uniform Guidance
due to competing priorities. (Finding
17-002, pages 15b – 15c)

The auditors recommended the ROE prepare
written procedures to implement the
requirements related to cash management
for determining the allowability of costs
in accordance with Subpart E – Cost
Principles of the Uniform Guidance and
the terms and conditions of the federal
award.

ROE Response: The Regional Office is in
the process of developing written
policies and procedures related to the
Uniform Guidance.

SUBRECIPIENT MONITORING DOCUMENTATION

During the audit, the Regional Office of
Education #47 (ROE) was providing the
certification to the Illinois State Board
of Education, the funding agency for IDEA
– Improvement Grant – Part D, when
required. However, the certifications
were not obtained from the subrecipients
of this program.

Auditors also noted that there were no
formal documented procedures for
monitoring subrecipients, including
formal completion of risk assessments and
the documentation of an assessed level of
risk of noncompliance for each
subrecipient as required by the Title 2
U.S. Code of Federal Regulations Part
200, Uniform Administration Requirements,
Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance).

The Uniform Guidance requires the ROE to
provide a specific certification to
funding agencies on all annual and final
fiscal reports or vouchers requesting
payment, and conversely, requires the ROE
to obtain such certification from its
subrecipients (2 CFR 200.415(a)).

The Uniform Guidance (2 CFR 200.331(b))
also requires the ROE to evaluate each
subrecipient’s risk of noncompliance with
federal statutes, regulations, and the
terms and conditions of the subaward for
purposes of determining the appropriate
subrecipient monitoring.

Regional Office management indicated they
were unable to dedicate the time needed
to fully implement the Uniform Guidance
due to competing priorities. (Finding
17-003, pages 15d – 15e)

The auditors recommended the ROE develop
written policies and procedures to ensure
all annual and final fiscal reports or
vouchers requesting payment received from
subrecipients of federal awards include
the certification required by 2 CFR
200.415(a). The auditors also recommended
the ROE formalize, in writing, its
subrecipient monitoring procedures, which
would include formally performing and
documenting risk assessments for each
subrecipient, as required and described
in 2 CFR 200.331(b).

ROE Response: The Regional Office has
added the following certification to
expenditure reports submitted by its
subrecipients:

By signing this report, I certify to the
best of my knowledge and belief that the
report is true, complete, and accurate,
and the expenditures, disbursements, and
cash receipts are for the purpose and
objectives set forth in the terms and
conditions of the Federal award. I am
aware that any false, fictitious, or
fraudulent information, or the omission
of any material fact may subject me to
criminal, civil, or administrative
penalties for fraud statements, false
claims, or otherwise. (US Code Title 18,
Section 1001 and Title 31, sections
3729-3730 and 3801-3812)

In addition, the ROE is implementing
formal risk assessment monitoring
procedures for its subrecipients.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #47’s financial statements as
of June 30, 2017 are fairly presented in
all material respects.

This financial audit was conducted by the
firm of Kemper CPA Group LLP.

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:BAO