REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #12

CLAY/CRAWFORD/ JASPER/LAWRENCE/ RICHLAND COUNTIES

FINANCIAL AUDIT

(In accordance with the

Single Audit Act and

OMB Circular A-133)

For the Year Ended:

June 30, 2008

Summary of Findings:

Total this audit                     2

Total last audit                     0

Repeated from last audit      0

Release Date:

May 14, 2009

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

are also available on

the worldwide web at

http://www.auditor.illinois.gov

SYNOPSIS

• The Regional Office of Education #12 loaned $10,217 from the Institute Fund to the Technology for Success Fund which is not allowed by the Illinois School Code (105 ILCS 5/3-12).

·         The Regional Office of Education #12 had an amount on deposit at a bank that exceeded the federally insured limit and amount pledged as collateral by $83,612.

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

The Regional Office of Education #12 loaned $10,217 from the Institute Fund to the Technology for Success Fund which is not allowed by the Illinois School Code (105 ILCS 5/3-12).

The Regional Office of Education #12 had an amount on deposit at a bank that exceeded the federally insured limit and amount pledged as collateral by $83,612.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

USE OF INSTITUTE FUNDS

         The Regional Office of Education #12 loaned $10,217 from the Institute Fund to the Technology for Success Fund (Technology Fund) which is not allowed by the Illinois School Code (105 ILCS 5/3-12).  The Illinois School Code states that the Regional Superintendent shall use the Institute Fund to defray expenses incidental to teacher institutes, workshops or meetings of a professional nature that are designed to promote the professional growth of teachers, or for the purpose of defraying the expense of any general or special meeting of teachers or school personnel of the region. 

         Various funds of the Regional Office share a pooled bank account.  When expenditures for the Technology Fund came due, they were paid out of the pooled bank account.  While the bank account had enough cash to cover the expenditures, it did not have enough of the Technology Fund’s money for the payments.  This created a loan from other funds that had cash in the account.  The only fund with sufficient cash to pay such expenditures was the Institute Fund.  (Finding 08-01, page 12)

         Auditors recommended that the Regional Office of Education #12 should monitor payments from pooled cash accounts to be sure that the particular fund paying expenditures has sufficient funds to cover the payments and should use Institute Funds only for purposes delineated by 105 ILCS 5/3-12.

         The Regional Office of Education #12 responded that it will closely monitor individual fund balances to ensure that sufficient funds exist to cover expenditure payments.  In addition, Regional Office of Education #12 will use Institute Funds only for purposes delineated by 105 ILCS 5/3-12.

UNINSURED DEPOSITS IN BANK

         The Regional Office of Education #12 had an amount on deposit at a bank that exceeded the federally insured limit and amount pledged as collateral by $83,612. The Public Funds Deposit Act (30 ILCS 225/1) gives the authorization for deposits in excess of the federally insured limit to be covered by pledged collateral held by the financial institutions’ trust departments in the Regional Office of Education #12’s name.  In addition, prudent business practice requires that all deposits held by financial institutions for the Regional Office of Education #12 be adequately covered by depository insurance or collateral.

         At June 30, 2008, the Regional Office of Education #12 had $83,612 of deposits in a bank which exceeded the Federal Deposit Insurance Corporation (FDIC) insured limit and insufficient collateral was obtained from the bank regarding the amount in excess of the FDIC insured limit.  Uninsured deposits could cause a loss to the Regional Office of Education #12 if the bank failed.

         The Regional Office of Education #12 had an agreement with the bank that the bank would monitor the cash balance to make sure that collateral was sufficient to cover any balance that exceeded the amount insured by FDIC.  At times during the month of June 2008, the bank balance exceeded the amount insured by FDIC, but the collateral was not increased until July 1, 2008.  (Finding 08-02, page 13)

         The auditors recommended that the Regional Office of Education #12 should periodically monitor the amount of collateral held on deposit to ensure that an adequate amount is maintained.

         The Regional Office of Education #12 responded it will monitor on a monthly basis the amount of collateral held on deposit to ensure that an adequate amount is maintained.

AUDITORS’ OPINION

         Our auditors state the Regional Office of Education #12’s financial statements as of June 30, 2008 are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JRB

SPECIAL ASSISTANT AUDITORS

         Our special assistant auditors were West & Company, LLC.