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The
Regional Office of Education #13 had one program with an excess cash balance
at June 30, 2006 that had not been obligated and the balance was not refunded
to the granting agency by August 15, 2006.
The excess cash balance was $53,388.
The Regional Office of Education #13 also had interest income earned
from federal funding in excess of $100 that was due back to the grantor
agency for several programs. The
interest income due back totaled $2,241.
The Regional
Office of Education #13 did not comply with certain statutory administrative
requirements.
The Regional Office of Education #13 classified $15,067 in capital
outlay expenditures as supply and material expenditures.
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FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
UNEXPENDED GRANT FUNDS AND INTEREST INCOME
The Regional Office of Education #13 had one
program with an excess cash balance at June 30, 2006 that had not been
obligated and the balance was not refunded to the granting agency by August
15, 2006. The excess cash balance was
$53,388.
The Regional Office of Education #13 also had
interest income earned from federal funding in excess of $100 that was due
back to the grantor agency for several programs. The interest income due back totaled
$2,241.
The Illinois Grant Funds Recovery Act (30 ILCS
705/5) requires that all grant funds that have not been expended or obligated
by the end of the grant period be returned to the granting agency within 45
days after the end of the period. The
Act also states that all interest earned on grant funds held by a grantee
shall become part of the grant principal when earned and be treated accordingly
for all purposes unless the grant agreement provides otherwise.
In addition,
the Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments (34 Code of Federal Regulations
Part 80.21) requires that interest earned on federal fund balances in excess
of $100 be remitted back to the federal granting agency. (Finding 06-1, page 12a).
The Regional Office of Education #13 accepted the
auditor’s recommendation and responded it will return the unspent funds to the
granting agencies.
CONTROLS
OVER COMPLIANCE WITH LAWS AND REGULATIONS
The Illinois School Code
(105 ILCS 5/3-14.11) requires the Regional Superintendent to examine at least
once each year all books, accounts, and vouchers of every school treasurer in
her educational service region, and if she finds any irregularities in them,
to report them at once, as directed by the School Code.
The Regional Office of Education #13 did not
examine at least once each year all books, accounts, and vouchers of every school
treasurer in the educational service region.
Regional Office officials noted they believe the mandate is outdated
and that they are satisfying the intent of the statute by other reviews they
undertake. This mandate has existed in
its current form since at least 1953.
The Illinois School Code (105 ILCS 5/3-14.5) also
requires the Regional Superintendent to visit each public school in the
county at least once a year, noting the methods of instruction, the branches
taught, the textbooks used, and the discipline, government and general
condition of the schools. This mandate
has existed in its current form since at least 1953.
The Regional Superintendent performs compliance
inspections for each public school in her region on a rotational basis every
three years instead of annually. The
Illinois Public School Accreditation Process Compliance Component document
completed at these visits includes many of the items delineated in 105 ILCS
5/3-14.5, but does not include a review of the methods of instruction and the
textbooks used in the district.
(Finding 06-2, pages 12b-12c)
The Regional Office of Education #13 responded that
with regards to compliance with 105 ILCS 5/3-14.11 and 105 ILCS 5/3-14.5, the
Illinois Association of Regional Superintendents of Schools and the Illinois
State Board of Education have agreed to seek legislation to remove
duplicative and/or obsolete sections of the Illinois School Code. Both parties believe that 105 ILCS 5/3-7 of
the Illinois School Code and 23 Ill. Adm. Code 1.20, respectively, contain
more current, thorough, and comprehensive requirements concerning a public
school district’s financial transactions and visitation of public schools by
the Regional Superintendent. As a
result, the two parties working together will seek legislation to repeal
these two sections of the Illinois School Code.
IMPROPER
EXPENDITURE CLASSIFICATION
The Regional Office of
Education #13 classified $15,067 in capital outlay expenditures as supply and
material expenditures instead of classifying capital outlay expenditures in
excess of their established capitalization threshold, in the correct account
code, and including those items on their capital outlay listing.
The Regional Office of
Education #13 is required by the Illinois State Board of Education to
classify expenditures in the appropriate functional category. In addition, the Regional Office of
Education #13 is required by Generally Accepted Accounting Principles to
capitalize capital asset purchases that meet or exceed their established
capitalization policy and expense the capital asset over its estimated useful
life. (Finding 06-3, page 12d)
The Regional Office of Education #13 accepted the
auditor’s recommendation.
AUDITORS’ OPINION
Our auditors state the Regional Office of
Education #13’s financial statements as of June 30, 2006 are fairly presented
in all material respects.
_____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JRB
SPECIAL ASSISTANT AUDITORS
Our special
assistant auditors were Kemper CPA Group LLP.
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