REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #48: PEORIA
COUNTY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2020

Release Date:  March 31, 2021

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: 0

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

• (20-1) The Regional Office of Education
#48 did not provide completed financial
statements in an auditable form by the
August 31 deadline.

• (20-2) The Regional Office of Education
#48 did not have sufficient internal
controls over the financial reporting
process.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

DELAY OF AUDIT

The Regional Office of Education #48
(ROE) did not provide completed financial
statements in an auditable form by the
August 31 deadline. Revised financial
statements were not received until
October 27, 2020.

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.

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. Annual
financial statements are to be prepared
on an accrual basis of accounting in
accordance with generally accepted
accounting principles (GAAP).

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

Regional Office management indicated that
the initial drafts represented their
first attempt to prepare complete
financial statements on their own without
the assistance of the auditors or an
outside CPA. (Finding 20-001, 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). Annual financial
statements should be compiled on an
accrual basis of accounting in accordance
with GAAP and thoroughly reviewed prior
to presentation to the Auditor General’s
independent auditors for audit by the
August 31 deadline.

ROE Response: Due to a move to a new
accounting system and the loss of a
person involved in several areas of the
financial statement preparation, the ROE
was unable to submit a completed
financial statement that needed no
updates by the August 31 deadline date.
We will secure the services of a CPA to
prepare financial records in an auditable
form along with complete financial
statements prior to the August 31 date.

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #48
(ROE) did not have sufficient internal
controls over the financial reporting
process. While the ROE maintained
controls over the processing of most
accounting transactions, there were not
sufficient controls over the preparation
of generally accepted accounting
principles (GAAP) based financial
statements for management or employees in
the normal course of performing their
assigned functions to prevent and detect
and correct financial statement
misstatements and disclosure omissions in
a timely manner.

The ROE is required to maintain a system
of controls over the preparation of
financial statements in accordance with
GAAP. The ROE’s internal controls over
GAAP financial reporting should include
adequately trained personnel with the
knowledge, skills and experience to
prepare GAAP based financial statements
and include all disclosures as required
by the Governmental Accounting Standards
Board (GASB).

Auditors noted the following deficiencies
in the financial statements provided to
auditors by the ROE:
• The Statement of Net Position, General
Fund, Education Fund, a proprietary fund
and two of the five non-major funds were
out of balance.
• The statement of activities beginning
net position for governmental activities
did not agree to the ending net position
at 6/30/19 but equaled the net position
at 6/30/18.
• Internal balances between the
governmental activities and business-type
activities did not match on the statement
of net position.

Revised financial statements provided to
auditors by the ROE on October 27, 2020,
contained numerous errors requiring
auditors to propose material audit
adjustments to the financial statements
and various corrections to the note
disclosures in order for the statements
to be in an auditable format.

The Regional Office management indicated
that a combination of difficulties in
implementing a new accounting system, the
loss during the year of an employee who
handled grant and other financial
responsibilities, and COVID 19 resulted
in insufficient time to prepare and
review the financial statements. (Finding
20-002, pages 12 – 13)

The auditors recommended that as part of
internal control over the preparation of
financial statements, including
disclosures, the ROE should implement a
comprehensive preparation and/or review
procedure to ensure that 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 applicable GAAP,
GASB pronouncements and knowledge of the
ROE’s activities and operations.

ROE Response: The ROE will once again
secure the services of an outside CPA,
familiar with the ROE, for assisting in
preparing and reviewing a compilation of
their financial statements and notes in
accordance with GAAP and GASB
pronouncements.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #48’s financial statements as
of June 30, 2020 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:RSH