REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #49: ROCK
ISLAND COUNTY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date: March 3, 2022

FINDINGS THIS AUDIT:  2

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

FINDINGS LAST AUDIT: 1

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

• (21-1) The Regional Office of
Education #49 lacked sufficient
internal controls over the financial
reporting process.

• (21-2) The Regional Office of
Education #49 lacked sufficient
internal controls over timely
expenditure report submission.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #49
(ROE) lacked 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 the generally accepted
accounting principles (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.

Effective June 25, 2021, Public Act
102-0025 allowed a Regional Office of
Education or Educational Service
Center to utilize a cash basis,
modified cash basis, or GAAP basis of
accounting to prepare the financial
statements for audit. The ROE has
chosen to utilize the GAAP basis of
accounting for financial statement
reporting. The ROE is required to
maintain a system of controls over the
preparation of financial statements.
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).

During review of the Regional Office’s
financial information prepared by the
ROE, it was noted the ROE did not have
adequate controls to ensure financial
statement balances were accurate.
While the ROE did maintain records to
indicate the balances of financial
statement accounts, the following
audit adjustments were proposed in
order to ensure those balances were
accurate:

• An entry was proposed to increase
accounts payable and capital assets in
the proprietary funds for $4,250;
• An entry was proposed to increase
cash and revenue in the institute fund
for $1,000; and
• An entry was proposed to increase
local on-behalf revenue and
expenditures for $6,578.

Regional Office officials indicated
they did not effectively detect all of
the adjustments needed in order to
present financial statements in
accordance with GAAP. (Finding
2021-001, pages 11 – 12) This finding
was first reported in 2007.

The auditors recommended that the ROE
should implement comprehensive
preparation and/or review procedures
as part of their internal control over
the preparation of financial
statements to ensure that the
financial statements, including
disclosures, are complete and
accurate. These procedures should be
performed by a properly trained
individual(s) possessing a thorough
understanding of applicable GAAP, GASB
pronouncements, and knowledge of the
ROE’s activities and operations.
Additionally, the ROE management
should consider Public Act 102-0025 to
determine if changing to the cash or
modified cash basis would be allowable
or beneficial to the ROE and users of
the ROE’s financial statements.

ROE Response: The ROE will acquire the
necessary information and training in
order to ensure the financial
statement balances are accurate and
eliminate the need for numerous
material audit adjustments.
Additionally, the ROE obtained
services from an auditing firm to
conduct financial statement
preparation for the audit process in
fiscal years 2018-2019, 2019-2020, and
2020-2021 and will continue to do so
for the 2021-2022 fiscal year.
Additionally, subsequent support has
been sought by an accounting firm to
lend support for review of records and
financial information to prepare
further for the financial statement
preparation.

CONTROLS OVER TIMELY EXPENDITURE
REPORT SUBMISSION

The Regional Office of Education #49’s
(ROE) internal controls over
expenditure report submission were not
effective. Six of thirteen expenditure
reports for Illinois State Board of
Education (ISBE) grants selected for
testing were not submitted timely.
Specifically, the following
expenditure reports were not submitted
timely:

Program  —  Quarter Ended  —  Submit
Date  —  Days Late

Title IV – 21st Century John Deere
Middle School  —  6/30/2021  —
9/8/2021  —  50
Title IV – 21st Century Wilson Middle
School  —  6/30/2021  —  9/8/2021  —
50
Regional Safe Schools Program  —
6/30/2021  —  7/21/2021  —  1
Early Childhood – Emergency Funds  —
3/31/2021  —  5/11/2021  —  21
Early Childhood – Governor’s Emergency
Education Relief  —  6/30/2021  —
8/3/2021  —  14
Early Childhood – Preschool for All
Expansion  —  6/30/2021  —  8/3/2021
—  14

The Illinois Grant Funds Recovery Act
(30 ILCS 705/4) requires State grant
recipients with awards in excess of
$25,000 to submit quarterly
expenditure reports to reflect the
progress of the grant program. The
ISBE requires all grant recipients
regardless of amount awarded, to
submit quarterly expenditure reports.
The State and Federal Grant
Administration Policy, Fiscal
Requirements, and Procedures of the
ISBE Division of Funding and
Disbursement Services requires
expenditure reports to be filed within
20 calendar days of the end of each
reporting quarter.

Regional Office officials indicated
they did not effectively detect that
the expenditure reports had not been
submitted prior to the due dates.
(2021-002, pages 13 – 14)

The auditors recommended the ROE
should take appropriate steps to
ensure the expenditure reports are
filed within the prescribed guidelines
set forth by ISBE.

ROE Response: The Regional
Superintendent will meet with the
bookkeeper and applicable grant
program personnel prior to the due
dates of the expenditure reports to
review the information and ensure that
all necessary information to the
expenditure report is readily
available and identify a date for
submittal of each report prior to the
due dates.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #49’s financial
statements as of June 30, 2021 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of Winkel, Parker & Foster,
CPA 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