REPORT DIGEST

INTERMEDIATE SERVICE CENTER #4: SOUTH
COOK

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  February 22, 2023

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  1 -- 0 -- 1
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


SYNOPSIS

• (22-1) The Intermediate Service
Center #4 did not have sufficient
internal controls over the financial
reporting process.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Intermediate Service Center #4
(ISC) did not have sufficient internal
controls over the financial reporting
process. During review of the ISC’s
financial information, it was noted
the ISC did not have adequate controls
to ensure financial statement balances
and disclosures were accurate. While
the ISC maintained records to indicate
the balances of financial statement
accounts, material audit adjustments
and changes to the related disclosures
were proposed in order to ensure those
balances and disclosures were accurate
and appropriate for the basis of
accounting selected for financial
statement presentation. The ISC
implemented Governmental Accounting
Standards Board (GASB) Statement No.
87, Leases, for Fiscal Year 2022. The
ISC failed to identify a lease
contract that qualifies as a lease
under GASB Statement No. 87, thus
causing an omission of a disclosure
considered necessary to achieve a fair
presentation of the ISC’s financial
statements.

The School Code (105 ILCS 5/2-3.17a)
allows a Regional Office of Education
or Educational Service Center to
utilize a cash basis, modified cash
basis, or generally accepted
accounting principles (GAAP) basis of
accounting to prepare financial
statements for audit. The ISC has
chosen to utilize the cash basis of
accounting for financial statement
reporting. The ISC is required to
maintain a system of controls over the
preparation of financial statements in
accordance with its selected basis of
accounting.

The ISC’s internal controls over
financial reporting should include
adequately trained personnel with the
knowledge, skills, and experience to
prepare financial statements and
include all related disclosures as
required by the GASB. GASB Statement
No. 87, Leases, provides guidance
regarding properly identifying lease
contracts, determining contracts that
qualify as a lease under leasing
arrangements, payments, cancellation
clauses and other disclosures similar
to GAAP to the extent applicable to
the ISC.

The Regional Office management
indicated they did not effectively
detect all of the material adjustments
needed in order to present financial
statements in accordance with the cash
basis of accounting as well as the
disclosures required in implementing
the new standard. (Finding 22-001,
pages 10 – 11)

The auditors recommended the ISC
should implement comprehensive
preparation and/or review procedures
as part of its internal controls over
the preparation of financial
statements to ensure the financial
statements, including disclosures, are
complete and accurate. These
procedures should be performed by a
properly trained individual possessing
a thorough understanding of the basis
of accounting selected for financial
statements, GASB pronouncements, and
knowledge of the ISC’s activities and
operations.

ROE Response: The South Cook
Intermediate Service Center #4 agrees
with the recommendation and will
improve its current financial
statement preparation procedures to
include a more comprehensive review
especially when there are new GASB
pronouncements implemented.

AUDITORS’ OPINION

Our auditors state the Intermediate
Service Center #4’s financial
statements as of June 30, 2022 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of Roth & Co., LLP.

JOE BUTCHER
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:JRB