REPORT DIGEST

REGIONAL OFFICE OF EDUCATION: #17
DEWITT, LIVINGSTON, LOGAN AND MCLEAN
COUNTIES

FINANCIAL AUDIT (IN ACCORDANCE WITH
THE UNIFORM GUIDANCE)
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  June 15, 2022

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 2

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

SYNOPSIS

• (21-1) 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
(ROE) did not have sufficient internal
controls over the financial reporting
process.

Effective June 25, 2021, Public Act
102-0025 allowed a Regional Office of
Education or Educational Service
Center 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 to utilize the GAAP
basis of accounting for financial
statement reporting.

The Regional Office is required to
maintain a system of controls over the
preparation of financial statements.
The ROE’s 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 financial statements submitted for
audit contained errors and
inaccuracies related to pension
transactions as follows:

• The ROE reported an asset for its
proportionate share of the net pension
asset for the Illinois Municipal
Retirement Fund (IMRF) pension plan
amounting to $409,843. However, this
net pension asset was not separately
reported from the net pension
liability for the Teacher’s Retirement
System (TRS) in the financial
statements, causing the net position
restricted for educational purposes to
be understated by $409,843.
• The ROE’s proportionate share of the
net pension liability for the TRS
pension plan was $145,052, but the ROE
erroneously reported and disclosed TRS
net pension liability to $120,565,
which actually represents the amount
of member contributions in Fiscal Year
2021.
• Deferred inflows for assumption
changes for IMRF amounting to $45,747
were not included in the deferred
inflows reported and disclosed or in
the amortization worksheet for
deferred inflows/outflows.
• Contributions for IMRF disclosed in
the notes to the financial statements
amounting to $91,896 did not agree to
the contributions reported in the
Required Supplementary Schedule of
Employer Contributions of $111,685.
• The target allocation disclosed for
IMRF used the prior year information
and was not updated to reflect the
current year’s information.

As a result of the above errors, the
related pension adjustments in the
government-wide financial statements
were inaccurately calculated and
reported. The ROE subsequently revised
its financial statements to adjust the
pension related accounts in the
financial statements and updated the
notes to the financial statements.

Regional Office management indicated
this was an oversight. (Finding
21-001, pages 15 – 16)

The auditors recommended the ROE
should implement comprehensive
preparation and/or review procedures
as part of their internal control over
the preparation of financial
statements to ensure the financial
statements, including disclosures, are
complete and accurate. These
procedures should be performed by a
properly trained individual(s)
possessing a thorough understanding of
the applicable GAAP, GASB
pronouncements, and knowledge of the
ROE’s activities and operations.
Additionally, the ROE’s management
should consider Public Act 102-0025 to
determine if changing to the cash or
modified cash basis would be allowable
or beneficial to the ROE and users of
the ROE’s financial statements.

ROE Response: The Regional Office is
working with their accounting firm to
prepare accurate financial statements
and disclosures.
In addition, the Regional Office will
be converting to a modified cash basis
for financial reporting beginning in
FY22.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #17’s financial
statements as of June 30, 2021 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of Adelfia LLC.

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