REPORT DIGEST ILLINOIS STATE BOARD OF EDUCATION FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2018 Release Date: April 4, 2019 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 1 -- 1 Category 2: 0 -- 0 -- 0 Category 3: 0 -- 0 -- 0 TOTAL: 0 -- 1 -- 1 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 INTRODUCTION This report contains only results pertaining to the Financial Statement Audit for the Illinois State Board of Education (Agency) for the year ended June 30, 2018. The Agency’s Compliance Examination covering the two years ended June 30, 2018 will be issued in a separate report at a later date. SYNOPSIS • (18-1) The Agency’s financial statements and financial reporting forms were materially misstated due to an understatement of liabilities related to federal grants. FINDING, CONCLUSION, AND RECOMMENDATION FINANCIAL STATEMENT REPORTING ERROR The Agency’s financial statements and financial reporting forms were materially misstated due to an understatement of liabilities related to federal grants. The Agency understated deferred inflows of resources for unavailable revenues in the amount of $14.2 million. The Agency improperly reduced the unavailable revenue calculation for receipts of current year receivables over 60 days after year-end. The misstatement was identified during the financial audit and subsequently corrected by Agency personnel. (Finding 1, pages 61-62) We recommended the Agency document the procedures for calculating available revenue, compare the amounts on the financial reporting forms to supporting calculations, and exercise due care during the financial statement preparation and review process to ensure accurate financial reporting. The Agency agreed with the finding and stated they will perform a comprehensive review of the GAAP package preparation checklists specific to their significant funds in order to reduce the likelihood of future misstatements. We will review the Agency’s progress towards implementation of our recommendation in our next financial audit. AUDITOR’S OPINION The auditors stated the financial statements of the Agency as of and for the year ended June 30, 2018 are fairly stated in all material respects. This financial audit was conducted by Kerber, Eck and 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