REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #13

 

CLINTON/MARION/ WASHINGTON COUNTIES

 

FINANCIAL AUDIT

 

For the Year Ended:

June 30, 2009

 

Summary of Findings:

 

Total this audit                      1

Total last audit                      1

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) 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 #13 did not have sufficient internal controls over the financial reporting process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

REGIONAL OFFICE OF EDUCATION #13

CLINTON/MARION/WASHINGTON COUNTIES

 

 

FINANCIAL AUDIT

For The Year Ended June 30, 2009

 

 

 

FY 2009

FY 2008

TOTAL REVENUES

$2,874,337

$2,991,671

Local Sources

$577,238

$637,344

% of Total Revenues

20.08%

21.30%

State Sources

$1,938,791

$2,189,365

% of Total Revenues

67.45%

73.18%

Federal Sources

$358,308

$164,962

% of Total Revenues

12.47%

5.51%

 

TOTAL EXPENDITURES

$3,092,949

$3,106,237

Salaries and Benefits

$2,470,796

$2,428,788

% of Total Expenditures

79.88%

78.19%

Purchased Services

$456,587

$459,604

% of Total Expenditures

14.76%

14.80%

All Other Expenditures

$165,566

$217,845

% of Total Expenditures

5.35%

7.01%

 

TOTAL NET ASSETS

$1,290,490

$1,509,102

 

INVESTMENT IN CAPITAL ASSETS

$55,474

$68,421

 

Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Keri Garrett

Currently:  Honorable Keri Garrett

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #13 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 #13 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 #13 did not have sufficient internal controls over the financial reporting process.  The Regional Office maintains its accounting records on the cash basis of accounting.  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’s financial information required numerous adjusting entries to present the financial statements in accordance with generally accepted accounting principles.

 

  • 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 to indicate the balances of accounts payable, accounts receivable, and deferred revenues, no entries were provided to reconcile the ROE’s grant activity, such as posting grant receivables and deferred revenues.

 

         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, page 10a-10b)  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 #13 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 #13 responded that it understands the nature of this finding and realizes that this circumstance is not unusual in an organization of this size.  The Regional Office accepts the degree of risk associated with this condition because the added expense of seeking additional expertise to prepare and/or review financial statements would take away from the funds available to provide educational services for the schools in the region. 

 

         The Regional Office noted that in an attempt to correct this finding, it sent the ROE Controller to various trainings to better understand accrual accounting and reporting under generally accepted accounting principles (GAAP).  (For previous Regional Office response, see Digest Footnote #1.)

 

 

 

 

 

 

 

 

AUDITORS’ OPINION

 

         Our auditors state the Regional Office of Education #13’s financial statements as of June 30, 2009 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.

 

 

DIGEST FOOTNOTES

 

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

 

In its prior response in 2008, the Regional Office of Education #13 responded that it understands the nature of this finding and realizes that this circumstance is not unusual in an organization of this size.  The Regional Office accepts the degree of risk associated with this condition because the added expense of seeking additional expertise to prepare and/or review financial statements would take away from the funds available to provide educational services for the schools in the region.  The Regional Office noted that in an attempt to correct this finding, it sent the ROE Controller to various trainings to better understand accrual accounting and reporting under generally accepted accounting principles (GAAP).