FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
BANK RECONCILIATIONS NOT COMPLETED PROPERLY AND
TIMELY
The Regional Office of Education #19
has not been preparing bank reconciliations on a timely basis. The June 2004 bank reconciliations were
not completed as of October 15, 2004.
In addition, the general ledger accounts relating to the specific bank
accounts were not identified properly or bank transactions were not recorded
consistently in the general ledger bank accounts.
The Regional Office noted that it
lost a bookkeeper and Business Manager during the year, resulting in a
backlog in many functions, including the bank reconciliations. Also, its computerized general ledger
system used for general fund bank accounts crashed.
Sound internal controls require bank reconciliations to be
performed accurately and promptly.
Reconciling items should be investigated immediately and adjustments
made to the general ledger. (Finding
04-1, pages 12-13) This finding is
repeated from our 2003 audit.
The Regional Office of Education #19
agreed with the auditor’s recommendation. The finance office has upgraded
their computer hardware, begun using the latest version of its financial
software package, and put into place a new tape backup system. The Regional Office has also cross-trained
finance staff. (For previous Regional
Office response, see Digest Footnote #1.)
NONCOMPLIANCE WITH STATE MANDATES
The Regional Office of Education #19 did
not comply with certain administrative mandates. The Illinois School Code (105 ILCS 5/3-12) requires that on or
before January 1 of each year, the Regional Superintendent shall publish in a
newspaper of general circulation published in the region or post in each
school building under his/her jurisdiction, certain information regarding the
Office’s Institute Fund. The Regional
Office did not publish the required report.
The Business Manager, who was in charge of this requirement, left the
Office. There were no other personnel
trained to perform this function.
The Illinois
Administrative Code (23 Ill. Adm. Code 110.115) states that fees for
conferences, workshops, materials and other costs charged for discretionary
activities not required by law or rule are to be determined on a
cost-recovery basis. Excess funds
resulting from registrations or request for materials/services beyond the
anticipated cost-recovery basis shall be deposited in an Enterprise Fund to
be used solely to reduce the cost of similar items or to cover costs incurred
due to less-than-anticipated registrations or requests for materials/services. The Regional Office’s Workshop Fund had a
balance of $778,868 as of June 30, 2004.
Total expenditures from the Fund were $274,625.
According to the Regional
Office, workshop fees were allowed to accumulate and the excess funds were
not used to reduce the cost of future workshops due to an uncertainty about
funding for these activities on a year-to-year basis. Also, the Regional Office was unaware of
the requirement to deposit the excess fees in an Enterprise Fund. (Finding
04-2, pages 14-15)
The Regional Office of Education #19 agreed with auditor’s
recommendation noting that it will take steps to ensure that the standards
required are met and administrative rules are complied with.
LATE SUBMISSION OF QUARTERLY REPORTS
The Regional Office of
Education #19 filed the quarterly expenditure reports for September 30, 2003,
and December 31, 2003, on November 20, 2003 and February 10, 2004,
respectively, for the Regional Safe Schools program. The grant contract for the Regional Safe
Schools program requires quarterly expenditure reports to be submitted at the
end of the month following the quarter.
The Regional Office did not submit a formal request on or before the
due date for an extension time for filing the related reports. (Finding 04-3, pages 16-17)
The Regional Office of
Education #19 agreed with the auditor’s recommendation, noting that staff
have now been trained to ensure that required reports of the grants are
submitted timely or to request a formal extension in the event the reports
cannot be filed on due dates.
AUDITORS’ OPINION
Our
auditors state the Regional Office of Education #19’s financial statements as
of June 30, 2004 are fairly presented in all material respects.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:KJM:ro
SPECIAL ASSISTANT AUDITORS
Our special assistant
auditors were E. C. Ortiz & Co., LLP.
DIGEST FOOTNOTES
#1: BANK
RECONCILIATIONS NOT COMPLETED TIMELY – Previous Regional Office Response
In its prior responses in 2003, the Regional Office
agreed with finding and stated it would implement a process of performing the
bank reconciliation upon receipt of the bank statements.
Complete Regional Office responses to prior findings are available
upon request from the Auditor General’s Office.
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