REPORT DIGEST

REGIONAL OFFICE OF EDUCATION # 11

CLARK, COLES, CUMBERLAND, DOUGLAS, EDGAR, MOULTRIE AND SHELBY COUNTIES

FINANCIAL AUDIT

For the Year Ended:
June 30, 2002

Summary of Findings:

Total this audit 2
Total last audit 5
Repeated from last audit 2

Release Date:
February 19, 2003

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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
Attn: Records Manager
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 # 11 does not have proper segregation of duties in the accounting function.
  • The Regional Office of Education # 11 prepares its financial statements on the cash basis of accounting. The ROE is not maintaining records of its accounts receivable, accounts payable, and deferred revenue in order to efficiently and effectively convert their financial statements from a cash basis to the modified accrual basis of accounting.

 

 

 

 

{Expenditures and Activity Measures are summarized on the reverse page.}

REGIONAL OFFICE OF EDUCATION # 11
CLARK, COLES, CUMBERLAND, DOUGLAS, EDGAR, MOULTRIE AND SHELBY COUNTIES
FINANCIAL AUDIT
For The Year Ended June 30, 2002

FY 2002

FY 2001
TOTAL REVENUES

1$1,721,319

$1,788,430

Local sources

$529,862

$565,937

% of Total Revenues

30.78%

31.64%

State Sources

1$1,091,665

$1,121,793

% of Total Revenues

63.42%

62.73%

Federal Sources

$99,792

$100,700

% of Total Revenues

5.80%

5.63%
TOTAL EXPENDITURES

1$1,713,308

$1,664,159

Salaries and Benefits

1$1,199,422

$948,105

% of Total Expenditures

70.01%

56.97%

Purchased Services

$295,986

$352,131

% of Total Expenditures

17.28%

21.16%

All Other Expenditures

$217,900

$363,923

% of Total Expenditures

12.72%

21.87%
COST OF PROPERTY AND EQUIPMENT

$366,206

$359,830

Note: Fiscal Year 2001 data was obtained from audits of ROEs conducted under the direction of the Illinois State Board of Education.
1 Fiscal Year 2002 amounts include on-behalf payments ($172,269). These on-behalf payments were not included in Fiscal Year 2001.
* Percentages may not add due to rounding.
REGIONAL SUPERINTENDENT
During Audit Period: Honorable John McNary
Currently: Honorable John McNary
 

 

 

 

 

The Regional Office of Education # 11 does not have proper segregation of duties in its accounting funcition.

 

 

 

 

 

 

 

 

The Regional Office of Education # 11 prepares its financial statements on the cash basis of accounting.

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

LACK OF SEGREGATION OF DUTIES

The Regional Office of Education # 11 does not have proper segregation of duties in the accounting function. For example, the same person is preparing deposit slips, recording receipts, and reconciling the bank statements in the cash receipts function. In the disbursement function, the same person that records cash disbursements and reconciles the bank statements is also mailing the signed checks.

A proper segregation of duties is required in the accounting function to reduce the risk that errors or fraud in the financial statements are not detected by employees in the normal course of performing their assigned functions. (Finding 02-1, pages 10 and 11)

The Regional Office of Education # 11 responded to the recommendation that due to a limited number of staff available, it is not economically feasible to maintain a proper segregation of duties over the accounting function, but that management would continue to closely supervise monthly financial reports and transactions.

ACCOUNTING RECORDS MAINTAINED ON CASH BASIS

The Regional Office of Education # 11 prepares its financial statements on the cash basis of accounting. The ROE is not maintaining records of its accounts receivable, accounts payable, and deferred revenue in order to efficiently and effectively convert their financial statements from a cash basis to the modified accrual basis of accounting.

Generally accepted accounting principles require general-purpose financial statements to be prepared on the modified accrual basis of accounting. (Finding 02-2, page 12)

The Regional Office of Education # 11 accepted the recommendation to begin maintaining subsidiary records of accounts receivable, accounts payable, and deferred revenue balances. The Regional Office of Education responded that in order to make the conversion to the modified accrual basis of accounting they would seek technical assistance from a Regional Financial Consultant who is an employee of the Illinois State Board of Education. The ROE also stated they would seek training workshops sponsored by the Illinois State Board of Education on the use of the Regional Accounting Program system to utilize the modified accrual system.

AUDITORS’ OPINION

Our auditors state that the Regional Office of Education # 11’s financial statements as of June 30, 2002 are fairly presented in all material respects.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Clifton Gunderson LLP.