FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
NO GENERAL FIXED ASSET ACCOUNT GROUP
The 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 03-1, pages 13 and 14). This finding is repeated from our 2002 audit.
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 is in the process of searching for software to track their fixed assets. (For previous Regional Office response, see Digest Footnote #1.)
REVENUE CLASSIFICATION
The Regional Office of Education #3 segregates its source of revenue by grant income rather than as local, State, or federal revenue. In addition, within the Standards Aligned Classroom program, the ROE netted its revenue against the expenditures. The Regional Office of Education #3 is required to maintain their accounting systems utilizing the Illinois State Board of Education accounting manual which requires the Regional Office of Education #3 to track funding sources as local, State, or federal revenue. (Finding 03-3, page 17).
The Regional Office of Education #3 accepted the recommendation to identify its revenues as local, State or federal revenue. In addition, the Regional Office of Education #3 will segregate revenue from expenditures in the Standards Aligned Classroom program.
INTERNAL CONTROLS OVER DISBURSEMENTS AND PURCHASES
The Regional Superintendent of Schools is responsible for establishing and maintaining an internal control system over the disbursement and purchasing process.
The Regional Office of Education #3’s purchasing procedures lacked certain controls. Evidence of receipt of goods or services, e.g., packing slips, are not maintained. Invoices are not marked "paid" when paid. The Regional Superintendent initials as "paid" the "authorization form" and not the actual invoice. Finally, the evidence of receipt was not matched with the invoice and all items agreed prior to payment. (Finding 03-2, pages 15 and 16). This finding is repeated from our 2002 audit.
The Regional Office of Education #3 accepted the recommendation to implement the above mentioned controls over disbursements and purchases. (For previous Regional Office response, see Digest Footnote #2.)
AUDITORS’ OPINION
Our auditors state the Regional Office of Education #3’s financial statements as of June 30, 2003 are fairly presented in all material respects except for the effect of the omission of the General Fixed Asset Account Group. The General Fixed Asset Account Group should be included in order to conform with Generally Accepted Accounting Principles.
__________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KJM:ro
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors were Kemper CPA Group LLP.
DIGEST FOOTNOTES
#1: NO GENERAL FIXED ASSET ACCOUNT GROUP – Previous Regional Office Response
In its prior response in 2002, the Regional Office accepted the finding and agreed to implement corrective action.
#2: INTERNAL CONTROLS OVER DISBURSEMENTS AND PURCHASES – Previous Regional Office Response
In its prior response in 2002, the Regional Office accepted the finding and agreed to implement corrective action.
Complete Regional Office responses
to prior findings are available upon request from the Auditor General’s Office.
