REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #13:
CLINTON, JEFFERSON, MARION AND
WASHINGTON COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2019

Release Date:  June 29, 2022

FINDINGS THIS AUDIT:  3

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  0 -- 2 -- 2
Category 3:  0 -- 1 -- 1
TOTAL:  0 -- 3 -- 3

FINDINGS LAST AUDIT: 6

Category 1: Findings that are material
weaknesses in internal control and/or
a qualification on compliance with
State laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, 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
www.auditor.illinois.gov

INTRODUCTION

SYNOPSIS

• (19-1) The Regional Office of
Education #13 did not have sufficient
controls over bank reconciliations.

• (19-2) The Regional Office of
Education #13 did not have sufficient
controls over cash receipts.

• (19-3) The Regional Office of
Education #13 did not provide
completed financial statements in an
auditable form by the August 31
deadline.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

CONTROLS OVER BANK RECONCILIATIONS

The Regional Office of Education #13
(ROE) did not have adequate controls
over the preparation and review of
bank reconciliations. During review of
the ROE’s monthly bank reconciliations
for its two bank accounts, auditors
noted bank reconciliations were not
prepared or reviewed in a timely
manner. Specifically, auditors noted
the following:

•One (4%) monthly reconciliation was
prepared 36 days after month end.
•One (4%) monthly reconciliation was
reviewed 35 days after month end.
•For five (21%) monthly
reconciliations, the previous and
ending cash balances differed but were
still approved and initialed.

The ROE is responsible for
establishing and maintaining a system
of internal controls over cash to
prevent errors and fraud. This
includes timely preparation and review
of bank reconciliations. Bank
reconciliations should be performed
within a month of the closing date on
the bank statement.

Regional Office management stated the
delay in the preparation and review of
bank reconciliations was due to not
clearly assigning duties to perform
the bank reconciliations. The errors
noted on the bank reconciliation was
due to staff’s lack of familiarity in
performing a bank reconciliation and a
programming error in the accounting
system. (Finding 19-001, pages 10 –
11) This finding was first reported in
2016.

The auditors recommended as part of
internal control over cash, the ROE
should prepare and review the monthly
bank reconciliations within a month of
the closing date on the bank
statement. The review should ensure
the reconciliation is completed
accurately.

ROE Response: As of July of 2019, bank
statements are currently and will
continue to be properly prepared by a
newly employed staff member and then
reviewed and dated by the Regional
Superintendent.

CONTROLS OVER CASH RECEIPTS

The Regional Office of Education #13
(ROE) did not have adequate controls
over cash receipts. During review of
40 cash receipts, auditors noted the
following:

•One (3%) deposit authorization form
was prepared more than 19 days after
the date on the cash receipt.
•Four (10%) cash receipts had no
documentation of when checks were
received. As a result, we were unable
to determine if cash was deposited in
a timely manner.

The ROE is responsible for
establishing and maintaining an
accurate system of internal controls
over cash to prevent errors and fraud.
This includes timely preparation and
review of cash receipts and deposits.
Deposit authorization forms and cash
deposits should be performed timely,
and evidence of review should be
documented.

Regional Office management stated the
untimely deposit was due to oversight,
and the lack of documentation when
checks were received was due to lack
of procedures on proper documentation
of check receipt dates. (Finding
19-002, pages 12 – 13)

The auditors recommended the ROE
should document when all cash receipts
are received, prepare and review the
deposit authorization form timely, and
compare it to the deposit slip and
deposit cash receipts in a timely
manner.

ROE Response: The date in which a
check is written (dated) is out of the
control of ROE No. 13. Moving forward,
payments received will be stamped the
day they arrive at the bookkeeping
office.

DELAY OF AUDIT

The Regional Office of Education #13
(ROE) did not provide completed
financial statements in an auditable
form within the required timeframe. An
outside accounting firm was hired by
the ROE to assist in the preparation
of financial statements and related
disclosures. For FY 2019, the ROE
utilized the cash basis of accounting
in presenting its financial
statements.

The ROE is subject to 105 ILCS
5/2-3.17a which requires the
Auditor General’s office to cause an
audit to be made, as of
June 30th of each year, of the
financial statements of all accounts,
funds and other moneys in the care,
custody, or control of the regional
superintendent of schools of each
educational service region in the
State and of each educational service
center established in the School Code.
The audit is to be conducted in
accordance with Generally Accepted
Government Auditing Standards (GAGAS).
A Regional Office of Education or
Educational Service Center is to
utilize a cash basis, modified cash
basis, or generally accepted
accounting principles (GAAP) basis of
accounting to prepare the financial
statements for audit.

In accordance with 105 ILCS 5/2-3.17a,
the Auditor General has promulgated
administrative rules and regulations
to govern this process. Those rules,
74 Ill. Adm. Code 420.320 (c) (2),
state that for audit purposes, each
regional office of education and
educational service center shall make
available to the Auditor General or
his designee all books and records
deemed necessary to make and complete
the required audits. The records shall
be in auditable form by August 15 of
the succeeding fiscal year. Financial
reports are to be available no later
than August 31 in order for the annual
audit to be completed by an
independent auditor selected by the
Auditor General.

In addition, prudent business
practices and transparency require
timely preparation and completion of
financial statements.

Regional Office management indicated
they contracted with a local CPA firm
to assist them with preparing the
financial statements. The ROE
submitted the necessary information to
the local CPA after the August 31
deadline. The ROE then worked within
the local CPA firm’s timeline to
finalize the financial statements.
(Finding 19-003, pages 14 – 15) This
finding was first reported in 2016.

The auditors recommended the ROE
should implement procedures to ensure
compliance with 105 ILCS 5/2-3.17a and
74 Ill. Adm. Code 420.320 (c) (2).
Annual financial statements need to be
presented to the Auditor General’s
independent auditors for audit by the
August 31 deadline.

ROE Response: We have hired and worked
with an outside accounting firm to
prepare the financial statements and
have the reports available in a timely
manner moving forward.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #13’s financial
statements as of June 30, 2019 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of Roth & Co., LLP.

JOE BUTCHER
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:BAO