REPORT DIGEST REGIONAL OFFICE OF EDUCATION #17 DEWITT, LIVINGSTON, AND MCLEAN 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 1 Total last audit 1 Repeated from last audit 1 Release Date: July 8, 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 #17 did not have sufficient internal controls over the financial reporting process. {Expenditures and Revenues are summarized on the reverse page.}

REGIONAL OFFICE OF EDUCATION #17

DEWITT, LIVINGSTON, AND MCLEAN COUNTIES

FINANCIAL AUDIT

(In Accordance with the Single Audit Act and OMB Circular A-133)

For The Year Ended June 30, 2008

	FY 2008	FY 2007
TOTAL REVENUES	$5,693,647	$5,597,204
Local Sources	$2,772,902	$2,893,855
% of Total Revenues	48.70%	51.70%
State Sources	$2,425,581	$2,197,146
% of Total Revenues	42.60%	39.25%
Federal Sources	$495,164	$506,203
% of Total Revenues	8.70%	9.04%
TOTAL EXPENDITURES	$5,591,669	$5,533,544
Salaries and Benefits	$3,104,001	$2,911,513
% of Total Expenditures	55.51%	52.62%
Purchased Services	$2,056,138	$2,311,031
% of Total Expenditures	36.77%	41.76%
All Other Expenditures	$431,530	$311,000
% of Total Expenditures	7.72%	5.62%
TOTAL NET ASSETS	$2,049,428	$1,947,450
INVESTMENT IN CAPITAL ASSETS	$552,923	$498,065
Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT

During Audit Period: Honorable G. Lawrence Daghe

Currently: Honorable Mark Jontry

The Regional Office of Education #17 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 #17 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 #17 did not have sufficient internal controls over the financial reporting process. The Regional Office maintains their 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. During their review of the Regional Office’s accounting records, auditors noted that 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, there were not entries made by the ROE to reconcile their grant activity, such as posting grant receivables and deferred revenues. The Regional Office’s financial information required numerous adjusting entries to present financial statements in accordance with generally accepted accounting principles. 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 08-1, pages 12-13) The auditors recommended that, as part of its internal control over the preparation of its financial statements, including disclosures, the Regional Office of Education #17 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 #17 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 will continue to seek professional accounting expertise. The Regional Office noted that it will ensure that staff with financial oversight is adequately trained to use the full range of current financial technology. Bookkeepers shall attend training conducted by expert consultant(s) in the preparation of financial statements as well as training conducted by IARSS consultants. AUDITORS’ OPINION Our auditors state the Regional Office of Education #17’s financial statements as of June 30, 2008 are fairly presented in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:KJM SPECIAL ASSISTANT AUDITORS Our special assistant auditors were Clifton Gunderson, LLP.