REPORT DIGEST
ILLINOIS STATE BOARD OF EDUCATION
FINANCIAL AUDIT
For The Year Ended: June 30, 2010
COMPLIANCE EXAMINATION
For the Two Years Ended: June 30, 2010
Summary of Findings:
Total this audit: 6
Total last audit: 3
Repeated from last audit: 2
Release Date: April 14, 2011
State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL
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(217) 782-6046 or TTY (888) 261-2887
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SYNOPSIS
• The Agency did not have a system in place to identify and
monitor all statutory mandates that are applicable to the Agency.
• The Agency did not take any actions on the schools
identified to have been on academic watch status after three years following
placement in such status.
• The Agency did not audit all major systems of internal
accounting and administrative control as required by the Fiscal Control and
Internal Auditing Act.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
NEED TO IMPROVE CONTROLS OVER STATUTORY REQUIREMENTS
The Agency did not have a system in place to identify and
monitor all statutory mandates that are applicable to the Agency.
Management identified laws enacted during fiscal years 2009
and 2010, but was unable to provide a complete list of all applicable
laws. (Finding 1, page 12)
We recommended the Agency establish procedures to identify,
monitor, and ensure compliance with applicable laws, including designation of
responsible parties.
Agency management agreed with the recommendation and stated
procedures will be established to identify, monitor, and ensure compliance with
applicable laws.
SCHOOLS ON ACADEMIC WATCH LIST
The Agency did not take any actions on the schools
identified to have been on academic watch status after three years following
placement in such status.
We noted 411 schools in FY09 and 471 schools and 42 school
districts in FY10 had been on academic watch status for over three years by the
end of the school year. The Agency had
taken some remedial steps during the first three years on academic watch
status, but had not taken the action required by statute after three years.
Agency personnel stated required actions were not taken due to a lack of
resources. (Finding 4, page 16)
We recommended the Agency identify, seek, or reallocate
resources to ensure compliance with State law.
Agency management agreed with the finding and stated the
mandate is being evaluated with a possibility of seeking a legislative
amendment.
INTERNAL AUDITS NOT COMPLETED
The Agency did not audit all major systems of internal
accounting and administrative control as required by the Fiscal Control and
Internal Auditing Act.
The Agency completed 2 of 11 and 0 of 16 planned audits
during fiscal years 2009 and 2010.
Agency personnel stated the audits were not completed due to lack of sufficient
staffing and significant time required addressing the American Recovery and
Reinvestment Act of 2009. (Finding 6, page 18)
This finding was first reported in 2006.
We recommended the Agency allocate adequate resources to the
Internal Audit Division to ensure audits of major systems are performed
biennially as required.
Agency management agreed with the recommendation and stated
the agency was in the process of allocating adequate resources to ensure
compliance. (For the previous Agency response, see Digest footnote #1.)
OTHER FINDINGS
The remaining findings are reportedly being given attention
by the Agency. We will review the
Agency’s progress towards the implementation of our recommendations in our next
engagement.
AUDITORS’ OPINION
The auditors stated the financial statements of the Illinois State Board of Education were fairly stated in all material respects as of and for the year ended June 30, 2010.
WILLIAM G. HOLLAND
Auditor General
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SPECIAL ASSISTANT AUDITORS
Washington, Pittman & McKeever, LLC were our special
assistant auditors on this engagement.
DIGEST FOOTNOTES
#1 INTERNAL AUDITS NOT COMPLETED – Previous Agency Response
During fiscal year 2008, Internal Audit staffing consisted
of the Chief Internal Auditor, one Principal Auditor, and one support
staff. In accordance with the Fiscal
Control and Internal Auditing Act (30 ILCS 10/2003), Internal Audit submitted a
two-year plan, identifying audits scheduled for the pending fiscal year [2008]
that would allow for audits of major systems of internal accounting and
administrative control conducted on a periodic basis so that all major systems
are reviewed at least once every 2 years.
The 2008 audit plan acknowledges that available staff time was not
adequate to perform all audits in the plan.
In addition to Internal Audits, a considerable portion of
staff time is spent in the role of audit liaison to the Financial and Compliance
auditors, the A-133 auditors, U.S. Department of Education Office of Inspector
General auditors, and U.S. Department of Education program offices performing
follow-up on Agency findings.
An additional Principal Auditor began working for Internal
Audit in October 2008. The addition of
this staff member will assist the Agency in meeting the requirements of the
Fiscal Control and Internal Auditing Act.