REPORT DIGEST ILLINOIS STATE BOARD OF EDUCATION FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2017 Release Date: January 9, 2018 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 1 -- 0 -- 1 Category 2: 0 -- 0 -- 0 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 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 INTRODUCTION This report contains only results pertaining to the Financial Statement Audit and agreed- upon procedures for the Illinois State Board of Education (Agency) for the year ended June 30, 2017. Our next engagement will include a financial audit for the year ended June 30, 2018 and a compliance examination for the two years ending June 30, 2018. SYNOPSIS • (17-001) The Agency’s financial statements were materially misstated due to an overaccrual of liabilities. FINDING, CONCLUSION, AND RECOMMENDATION FINANCIAL STATEMENT REPORTING ERROR The Illinois State Board of Education’s financial statements were materially misstated due to an overaccrual of liabilities. The $94.2 million misstatement related to fiscal year 2018 expenditures for grant programs that were incorrectly included in the fiscal year 2017 liability. Agency personnel corrected the misstatement after it was identified during the audit. (Finding 1, pages 52-53) We recommended the Agency exercise due care when performing internal control procedures to assess the risk of material misstatements of the Agency’s financial statements and to identify such misstatements during the financial statement preparation and review process. Management agreed with the finding and responded they will incorporate questions into the detailed checklists utilized when preparing and reviewing Agency GAAP packages. AUDITOR’S OPINION The auditors stated the financial statements of the Agency as of and for the year ended June 30, 2017 are fairly stated in all material respects. This financial audit was conducted by Kerber, Eck & Braeckel LLP. JANE CLARK Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:lkw