REPORT DIGEST ILLINOIS STATE BOARD OF EDUCATION COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2018 Release Date: June 20, 2019 FINDINGS THIS AUDIT: 11 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 1 -- 1 Category 2: 7 -- 3 -- 10 Category 3: 0 -- 0 -- 0 TOTAL: 7 -- 4 -- 11 FINDINGS LAST AUDIT: 8 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 digest covers our State Compliance Examination of the Illinois State Board of Education (Agency) for the two years ended June 30, 2018. A separate Financial Audit as of and for the year ended June 30, 2018, was previously released on April 4, 2019. In total, this report contains 11 findings, one of which was reported in the Financial Audit. SYNOPSIS • (18-3) The Agency did not process applications to determine and entitle eligible school districts for school construction project grants. • (18-7) The Agency did not develop and establish a heroin and opioid drug prevention pilot program or comply with reporting requirements in relation to the pilot program. • (18-8) The Agency did not develop a 5- year strategic plan for Evidence Based Funding. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INSUFFICIENT CONTROLS OVER SCHOOL CONSTRUCTION PROJECTS The Agency failed to process applications to determine and entitle eligible districts for school construction project grants. We noted the Agency had not reviewed the 282 applications it received from school districts since Fiscal Year 2003 to determine whether the district was eligible and should have been entitled to receive a school construction grant. The process for program grants requires applications from districts with populations not exceeding 500,000 to be submitted, then the Agency is required to review for eligibility, calculate grant indexes, issue entitlements and submit a priority ranking for grants when funds are appropriated. Agency officials stated due to the lack of an appropriation at the Capital Development Board for school construction grants, they did not find it appropriate or efficient to review applications and entitle districts. The Agency did seek legislative remedy but the Agency’s responsibilities to review and approve applications have not been eliminated. (Finding 3, pages 22-23) We recommended the Agency review applications for school construction projects to calculate grant indexes, issue entitlements, and submit a priority ranking to the Capital Development Board, unless legislation becomes effective that eliminates such responsibility. The Agency agreed with the finding and stated they have introduced legislative language in the past to amend the entitlement language in the statute but it was not acted on in past legislative sessions; however, they have introduced language again for the 2019 session. NONCOMPLIANCE WITH THE SCHOOL CODE ON HEROIN AND OPIOID DRUG PREVENTION PILOT PROGRAM The Agency did not develop and establish a heroin and opioid drug prevention pilot program or comply with reporting requirements in relation to the program. The Agency and the Department of Human Services (DHS) were required to develop and establish a 3-year heroin and opioid drug prevention pilot program by January 1, 2017. The Agency assumed DHS would lead the development of the 3-year program and therefore, never acted on developing this program. (Finding 7, pages 29-30) We recommended the Agency, in conjunction with the Department of Human Services, develop and establish the heroin and opioid drug prevention pilot program and begin submitting the required annual reports to the General Assembly. The Agency agreed with the finding and stated they will work with DHS regarding the viability of a pilot program in conjunction with other funded substance use prevention programs already administered by the Department within schools. FAILURE TO DEVELOP EVIDENCE BASED FUNDING 5-YEAR STRATEGIC PLAN The Agency did not develop and submit to the Governor and General Assembly a 5-year strategic plan for all school districts receiving funding under evidence based funding. The strategic plan is intended to help in planning for adequacy funding and was required to be submitted to the Governor and the General Assembly no later than January 1, 2018. (Finding 8, pages 31-32) We recommended the Agency submit the 5-year strategic plan to the Governor and General Assembly as soon as possible, or seek legislative remedy. The Agency agreed with the finding and stated they will continue to develop a plan that addresses the statutory requirements. OTHER FINDINGS The remaining findings relate to a financial statement reporting error, noncompliance with requirements for bullying prevention, various reporting requirements, publishing the evidence based funding distribution schedule, timely notification to the retirement system of felony convictions and insufficient controls over the Illinois Teaching Excellence Program. These findings are reportedly being given attention by Agency personnel. We will review the Agency’s progress towards the implementation of our recommendations in our next compliance examination. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Agency for the two years ended June 30, 2018, as required by the Illinois State Auditing Act. The accountants qualified their report on State compliance for Finding 2018-001. Except for the noncompliance described in this finding, the accountants stated the Agency complied, in all material respects, with the requirements described in the report. This compliance examination 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