REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #9

 

CHAMPAIGN AND FORD COUNTIES

 

FINANCIAL AND COMPLIANCE AUDIT

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

 

For the Year Ended:

June 30, 2003

 

Summary of Findings:

 

Total this audit                 4

Total last audit                 8

Repeated from last audit  1

 

Release Date:

January 28, 2004

 

 

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 TDD (217) 524-4646

 

This Report Digest is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

SYNOPSIS
  • The Regional Office of Education #9 did not disburse $240,774 of distributive funds in a timely manner.
  • The Regional Office of Education #9’s general ledger did not balance. The general ledger was out of balance by a total of $425,992 which was the cumulative effect of all receivables, payables, and deferred revenue from the previous year.
  • The Regional Office of Education #9’s expenditure reports to the Illinois State Board of Education (ISBE) reported 110% of budgeted expenditures less budgeted salaries as obligated funds even though the related services or goods had not been received, ordered or otherwise obligated as defined in ISBE’s State and Federal Grant Administration Policy and Fiscal Requirements and Procedures.

 

 

 

 

 

 

 

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

 

 

                     REGIONAL OFFICE OF EDUCATION #9

                       CHAMPAIGN AND FORD COUNTIES

 

                      FINANCIAL AND COMPLIANCE AUDIT

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

                             For The Year Ended June 30, 2003

 

FY 2003

FY 2002

TOTAL REVENUES

$6,144,250

$5,504,052

Local sources

$1,596,717

$1,390,402

% of Total Revenues

25.99%

25.26%

State Sources

$3,001,112

$2,597,674

% of Total Revenues

48.84%

47.20%

Federal Sources

$1,546,421

$1,515,976

% of Total Revenues

25.17%

27.54%

TOTAL EXPENDITURES

$6,097,295

$5,484,975

Salaries and Benefits

$3,799,206

$2,975,245

% of Total Expenditures

62.31%

54.24%

Purchased Services

$1,534,137

$1,405,517

% of Total Expenditures

25.16%

25.62%

All Other Expenditures

$763,952

$1,104,213

% of Total Expenditures

12.53%

20.13%
     

COST OF PROPERTY AND EQUIPMENT

$534,373

$465,354
 

* Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT

During Audit Period: Honorable Martin Barrett

Currently: Honorable Judith Pacey

 

 

 

 

 

 

The Regional Office of Education #9 did not distribute $240,774 of distributive funds in a timely manner.

 

 

 

 

 

 

 

 

 

The Regional Office of Education #9’s general ledger was out of balance by a total of $425,992.

 

 

 

 

 

 

 

 

The Regional Office of Education #9 submitted inaccurate expenditure reports to the Illinois State Board of Education in order to maintain cash flows.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

DISBURSEMENT OF DISTRIBUTIVE FUNDS

The Regional Office of Education #9 had distributive funds totaling $240,774 deposited in its Illinois Funds account. The funds remained in the account for 38 days before being distributed to the Rural Champaign County Special Education Cooperative.

Funds received as an agent for individuals, private organizations, other governmental units, and/or other funds of the Regional Office of Education should be distributed to the appropriate entity within a reasonable amount of time. (Finding 03-2, page 13)

The Regional Office of Education #9 accepted the recommendation to print and review statements of the Illinois Funds cash account weekly to ensure that funds are being distributed to the proper recipients in a timely manner.

 

GENERAL LEDGER DOES NOT BALANCE

The Regional Office of Education #9 had 15 individual funds that did not balance. The general ledger was out of balance by a total of $425,992 which was the cumulative effect of all receivables, payables, and deferred revenue from the previous year. The Regional Office did not close out the prior year accounting records correctly.

Generally Accepted Accounting Principles require debits to equal credits in the individual funds and in total. (Finding 03-3, page 14)

The Regional Office of Education #9 accepted the recommendation to review financial information to ensure that debits equal credits at all times. The Regional Office of Education #9 will also ensure that accounting records are properly closed at the end of each fiscal year.

STATE EXPENDITURE REPORTS AND CASH MANAGEMENT

The Regional Office of Education #9’s expenditure reports to the Illinois State Board of Education reported 110 % of budgeted expenditures less budgeted salaries as obligated funds even though the related services or goods had not been received, ordered or otherwise obligated as defined in the Illinois State Board of Education’s State and Federal Grant Administration Policy and Fiscal Requirements and Procedures. (Finding 03-4, page 15) This finding is repeated from our 2002 audit.

The Regional Office of Education #9 disagreed with the recommendation to report only liabilities actually incurred but not paid as obligated funds on Illinois State Board of Education expenditure reports. The Regional Office stated they completed expenditure reports using the 110% formula at the suggestion of the Illinois State Board of Education to maintain cash flow. The Regional Office also stated they will continue to use the formula until funding from the State is prompt for all programs. (For previous Regional Office response, see Digest Footnote #1.)

Illinois State Board of Education internal audit and fiscal personnel told the auditors that the State Board has not authorized any Regional Office to inflate expenditure reports. Expenditure reports should include only actual expenditure amounts plus outstanding obligations.

AUDITORS’ OPINION

Our auditors state the Regional Office of Education #9’s financial statements as of June 30, 2003 are fairly presented in all material respects.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Kemper CPA Group, LLP.

 

 

DIGEST FOOTNOTES

#1: STATE EXPENDITURE REPORTS AND CASH MANAGEMENT – Previous Regional Office Response

In its prior response in 2002, the Regional Office disagreed with the finding. The Regional Office stated they completed expenditure reports using the stated formula at the suggestion of the Illinois State Board of Education and would continue to use the formula until funding from the State was prompt for all programs.

Complete Regional Office responses to prior findings are available upon request from the Auditor General’s Office.