FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
COMPLIANCE WITH STATUTORY REQUIREMENTS
The Regional
Office of Education #53 did not comply with certain administrative
requirements. The Illinois School
Code (105 ILCS 5/3-6) requires the Regional Superintendent to report, in
writing, to the county board on or before January 1 of each year,
stating: (1) the balance on hand at
the time of the last report, and all receipts since that date, with sources
from which they were derived; (2) the amount distributed to each of the
school treasurers in his or her county; and (3) any balance on hand. According to the Regional Office,
management was unaware they were required to provide the financial
information noted above.
In addition, the Illinois
Administrative Code (23 Ill. Adm. Code 110.115) requires that fees for
conferences, workshops, materials and other costs charged for discretionary
activities not required by law or rule are to be determined on a
cost-recovery basis. Excess funds
resulting from registrations or requests for materials/services beyond the
anticipated cost-recovery basis shall be deposited in an Enterprise Fund to
be used solely to reduce the cost of similar items or to cover costs incurred
due to less-than-anticipated registrations or requests for
materials/services. According to
Regional Office, due to funding cuts for programs, the Mid-Illini Educational
Cooperative charged fees for workshops and services in excess of costs in
some instances. In addition, an Enterprise Fund had not been established for
the excess funds. (Finding 04-1, page 15)
The Regional Office of Education #53 accepted the recommendation
to comply with the requirements of the Illinois Statutes and Illinois
Administrative Code.
EXCLUSION OF SOME REQUIRED 1099’S
The Regional Office of Education #53 did not prepare and submit
Form 1099-MISC for two individuals who provided services and were paid in
excess of $600 in calendar year 2003.
A $50 per 1099 penalty can be assessed by the Internal Revenue Service
for 1099s that are not filed.
According to IRS regulation §1.604-1, the Tazewell County Regional
Office of Education #53 is required to submit information returns (1099-MISC)
to the Internal Revenue Service for all individuals who received business
payments of $600 or more. (Finding 04-2, page 16)
The Regional Office of
Education #53 accepted the auditor’s recommendation to carefully
review disbursements each calendar year and issue timely 1099s for all
individuals who were paid in excess of $600.
INADEQUATE SUBRECIPIENT MONITORING OF
FEDERAL GRANT
The Regional Office of
Education #53 did not perform any subrecipient monitoring of the Regional
Safe School Program. The Regional
Safe School funds of $299,192 passed from the Regional Office of Education to
Illinois Central College to run the program without any oversight.
The Regional Office of Education #53 is required to monitor the
subrecipient of federal money according to the compliance requirements of OMB
Circular A-133. (Finding 04-3, page
17)
The Regional Office of Education #53 accepted the auditor’s
recommendation to monitor the spending of their subrecipient for the Regional
Safe School Program in accordance with OMB Circular A-133 sub-recipient
monitoring requirements.
EXTENDED TIME ELAPSING BETWEEN DRAWDOWN
AND DISBURSEMENT
The Regional Office of Education #53 requested additional drawdowns of
federal funds before funds previously received were exhausted or expenditures
were obligated. On quarterly
expenditure reports, the Regional Office showed all unspent funds as being
obligated, rather than only those funds that had been obligated as of the
report date. The average monthly
balance of unexpended funds was $43,709.
Recipients of federal monies must follow procedures to minimize the
time elapsing between the transfer of funds from the U.S. Treasury and
disbursement, in accordance with OMB Circular A-133. (Finding 04-4, page 18)
The Regional Office of
Education #53 accepted the auditor’s recommendation to only record
obligations for known invoices and commitments on quarterly expenditure
reports.
AUDITORS’ OPINION
Our
auditors state the Regional Office of Education #53’s financial statements as
of June 30, 2004 are fairly presented in all material respects.
_____________________________________
WILLIAM
G. HOLLAND, Auditor General
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SPECIAL ASSISTANT AUDITORS
Our special assistant
auditors were Ginoli & Company, LTD.
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