Regional Office of Education #3 does not maintain adequate records to account for all fixed assets. Generally Accepted Accounting Principles require that entities maintain a General Fixed Asset Account Group. Because the Regional Office of Education # 3 omitted this account group, the audit opinion on the general-purpose financial statements was qualified (Finding 02-5, pages 19 and 20).

The Regional Office of Education # 3 accepted the recommendation to ensure that all fixed assets are inventoried according to source of funds and recorded at cost and tagged with serial numbers. The ROE also agreed to adopt a capitalization threshold policy.

The Regional Office of Education #3 is a three county ROE. By statute the Regional Office of Education #3 is a separate entity under the financial oversight of the Illinois State Board of Education. The three counties that make up the Regional Office of Education #3 directly pay various expenses on behalf of the ROE. Reasonable accounting practices require centralized accounting records (Finding 02-6, page 21).

The Regional Office of Education #3 accepted the recommendation to prepare a budget of anticipated expenses to be paid through county support. Each county would remit its proportionate share of support directly to the ROE. Expenditures from the funds would then be under the general disbursement controls and financial reporting of the Regional Office of Education #3. The ROE is waiting on approval from one county.

The Regional Office of Education #3 did not maintain appropriate internal controls over the following accounting functions:

Generally accepted auditing standards require management to maintain adequate internal controls.

Regional Office of Education #3 is not immediately endorsing checks "for deposit only" when opening the mail, mail receipts are not listed by the person opening the mail and then subsequently comparing the list to the deposit, and cash receipts are deposited monthly and are kept in an unlocked drawer (Finding 02-1, pages 13 and 14).

Regional Office of Education #3’s purchasing procedures also lack certain controls. Purchase orders are not used consistently. Invoices are not mark "paid" when paid. Statements are not marked "statement" to prevent duplicate payment. Finally, evidence of receipt of goods in accordance with the ROE’s needs and instructions are not maintained (Finding 02-3, pages 16 and 17).

Regional Office of Education #3’s controls over payroll lack procedures for maintenance of time cards for hourly employees. The ROE should ensure that all employees paid by either days or hours submit signed timesheets. Signed timesheets would prevent payment for hours not worked (Finding 02-4, page 18).

The Regional Office of Education # 3 accepted the recommendation to implement the above mentioned controls over cash receipts, purchases, and payroll to prevent unauthorized transactions and loss of resources.