REPORT DIGEST

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

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  February 8, 2023

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: 3

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

• (20-1) The Regional Office of
Education #13 did not have sufficient
controls over bank reconciliations.

• (20-2) The Regional Office of
Education #13 did not have sufficient
controls over cash receipts.

• (20-3) 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
accurately prepared or reviewed.
Specifically, auditors noted the
previous and ending cash balances
differed for three (13%) monthly
reconciliations, 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 accurate preparation and
review of bank reconciliations. Errors
or differences in the balances should
be investigated and resolved.

Regional Office management stated the
errors noted on the bank
reconciliation were due to staff’s
lack of familiarity in performing a
bank reconciliation and a programming
error in the accounting system.
(Finding 20-001, page 10) This finding
was first reported in 2016.

The auditors recommended as part of
internal control over cash, the ROE
should ensure accurate preparation and
review of its monthly bank
reconciliations.

ROE Response: The ROE No. 13 agrees
with the finding. A new staff member
has been given the task of completing
the bank reconciliation. Also, the ROE
started using a new accounting system
in fiscal year 2021.

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:

• Two (5%) deposit authorization forms
were prepared 9 and 11 days after the
cash receipt dates.
• 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 deposits were 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 20-002, page
11) This finding was first reported in
2018.

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 ROE No. 13 agrees
with the finding. The ROE has
implemented the recommendation and is
documenting when all checks are
received.

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.

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. The ROE has
chosen the cash basis of accounting
for financial reporting.

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 20-003, pages 12 – 13) 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: The ROE No. 13 agrees
with the finding. The ROE has hired an
outside CPA to complete financial
statements in a timely manner.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #13’s financial
statements as of June 30, 2020 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