REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #3

 

BOND, FAYETTE AND EFFINGHAM COUNTIES

 

FINANCIAL AUDIT

(In Accordance with the

Single Audit Act and OMB Circular A-133)

 

For the Year Ended:

June 30, 2009

 

Summary of Findings:

 

Total this audit                       1

Total last audit                       3

Repeated from last audit        1

 

Release Date:

February 4, 2010

 

 

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

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 is also available on

the worldwide web at

http://www.auditor.illinois.gov

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

·         The Regional Office of Education #3 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

{Expenditures and Revenues are summarized on the reverse page.}

 

 

 

 

 

REGIONAL OFFICE OF EDUCATION #3

BOND, FAYETTE AND EFFINGHAM COUNTIES

 

 

FINANCIAL AUDIT

(In Accordance with the Single Audit Act and OMB Circular A-133)

For The Year Ended June 30, 2009

 

 

 

FY 2009

FY 2008

TOTAL REVENUES

$2,399,439

$2,295,617

Local Sources

$651,950

$948,549

% of Total Revenues

27.17%

41.32%

State Sources

$1,145,791

$935,708

% of Total Revenues

47.75%

40.76%

Federal Sources

$601,698

$411,360

% of Total Revenues

25.08%

17.92%

 

TOTAL EXPENDITURES

$2,416,529

$2,220,687

Salaries and Benefits

$1,455,395

$1,434,324

% of Total Expenditures

60.23%

64.59%

Purchased Services

$652,350

$559,680

% of Total Expenditures

27.00%

25.20%

All Other Expenditures

$308,784

$226,683

% of Total Expenditures

12.78%

10.21%

 

TOTAL NET ASSETS

$712,890

$729,980

 

INVESTMENT IN CAPITAL ASSETS

$60,524

$72,955

 

Percentages may not add due to rounding.

 

 

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Mark A. Drone

Currently:  Honorable Mark A. Drone

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #3 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

Controls Over Financial Statement Preparation

 

         The Regional Office of Education #3 is required to maintain a system of controls over the preparation of financial statements in accordance with generally accepted accounting principles (GAAP).  Regional Office internal controls over GAAP financial reporting should include adequately trained personnel with the knowledge and expertise to prepare and/or thoroughly review GAAP based financial statements to ensure that they are free of material misstatements and include all disclosures as required by the Governmental Accounting Standards Board (GASB).

 

         The Regional Office of Education #3 did not have sufficient internal controls over the financial reporting process.  The Regional Office maintains their accounting records on the cash basis of accounting.  While the Regional Office maintains controls over the processing of most accounting transactions, there are not sufficient controls over the preparation of the GAAP based financial statements for management or employees in the normal course of performing their assigned functions to prevent or detect financial statement misstatements and disclosure omissions in a timely manner.  In their review of the Regional Office’s accounting records, auditors noted that:

 

  • The Regional Office did not have adequate controls over the maintenance of complete records of accounts receivable, accounts payable, capital assets, or deferred revenues. 

  • Numerous adjustments were required to present financial statements in accordance with generally accepted accounting principles.

 

         According to Regional Office officials, they did not have adequate funding to hire and/or train their accounting personnel in order to comply with these requirements. (Finding 09-1, pages 13-14) This finding was first reported in 2007.

         The auditors recommended that, as part of its internal control over the preparation of its financial statements, including disclosures, the Regional Office of Education #3 should implement a comprehensive preparation and/or review procedure to ensure that the financial statements, including disclosures, are complete and accurate.  Such procedures should be performed by a properly trained individual(s) possessing a thorough understanding of applicable generally accepted accounting principles, GASB pronouncements, and knowledge of the Regional Office of Education’s activities and operations.

 

         The Regional Superintendent responded that he agreed with the finding, but believed that the hiring or training of an individual with a thorough understanding of applicable generally accepted accounting principles and GASB pronouncements would be too costly.  However, the Regional Office of Education #3 will continue to seek improvement within their internal controls system. (For previous Regional Office response, see Digest Footnote #1.)

 

 

AUDITORS’ OPINION

 

         Our auditors state the Regional Office of Education       #3’s financial statements as of June 30, 2009 are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:KJM

 

 

SPECIAL ASSISTANT AUDITORS

 

        Our special assistant auditors were West & Company, LLC.

 

 

 

 

DIGEST FOOTNOTES

 

#1: Controls Over Financial Statement Preparation —Previous Regional Office Response

 

In its prior response in 2008, the Regional Office of Education #3 responded that management agreed with the finding.