REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #11

 

CLARK, COLES, CUMBERLAND, DOUGLAS, EDGAR, MOULTRIE AND SHELBY 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                       2

Repeated from last audit        1

 

Release Date:

February 11, 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) 82-6046 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 #11 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

REGIONAL OFFICE OF EDUCATION #11

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

SHELBY 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

$2,674,178

$2,503,521

Local Sources

$516,209

$544,298

% of Total Revenues

19.30%

21.74%

State Sources

$1,403,257

$1,333,057

% of Total Revenues

52.47%

53.25%

Federal Sources

$754,712

$626,166

% of Total Revenues

28.22%

25.01%

 

TOTAL EXPENDITURES

$2,722,838

$2,477,053

Salaries and Benefits

$1,504,961

$1,364,438

% of Total Expenditures

55.27%

55.08%

Purchased Services

$472,559

$371,522

% of Total Expenditures

17.36%

15.00%

All Other Expenditures

$745,318

$741,093

% of Total Expenditures

27.37%

29.92%

 

TOTAL NET ASSETS

$704,293

$752,953

 

INVESTMENT IN CAPITAL ASSETS

$8,781

$13,535

 

Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable John McNary

Currently:  Honorable Nik Groothuis

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #11 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 #11 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 #11 did not have sufficient internal controls over the financial reporting process.  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.  For example, auditors, in their review of the Regional Office’s accounting records, noted the following:

 

  • The Regional Office did not have adequate controls over the maintenance of complete records of accounts receivable, accounts payable, or deferred revenues.  While the Regional Office did maintain records of accounts payable, accounts receivable, and deferred revenues, not all entries were made by the ROE to reconcile their grant activity, such as posting grant receivables and deferred revenues. 

 

  • The Regional Office’s financial information required numerous adjusting entries to present the financial statements in accordance with generally accepted accounting principles.  This included the Regional Office not recording multiple adjusting entries from the prior year audit.

 

         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 09-01, pages 12a-12b) 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 #11 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 Office of Education #11 responded that it understands the nature of this finding and believes that this circumstance is not unusual in an organization of its size.  The Regional Office accepts the degree of risk associated with the condition and believes that seeking additional accounting expertise in the form of another accounting firm or appropriately trained individual to prepare and/or review financial statements would reduce funds available to provide educational services for the schools in the region.  To help address the lack of “sufficient internal controls over the financial reporting process,” the Regional Office will seek appropriate training for its bookkeeping staff. (For previous Regional Office response, see Digest Footnote #1.)

 

 

 

 

 

AUDITORS’ OPINION

 

          Our auditors state the Regional Office of Education #11’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 Kemper CPA Group, LLP.

 

 

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

 

In its prior response in 2008, the Regional Office of Education #11 responded it understands the nature of this finding and believes that this circumstance is not unusual in an organization of its size.  The Regional Office accepts the degree of risk associated with the condition and believes that seeking additional accounting expertise in the form of another accounting firm or appropriately trained individual to prepare and/or review financial statements would reduce funds available to provide educational services for the schools in the region.  To help address the lack of “sufficient internal controls over the financial reporting process,” the Regional Office will seek appropriate training for its bookkeeping staff.