REPORT DIGEST
REGIONAL OFFICE OF EDUCATION #20:
EDWARDS, HARDIN, GALLATIN, POPE, SALINE, WABASH, WAYNE
AND
WHITE COUNTIES
Financial Audit
For the Year Ended June 30, 2010
Summary of Findings:
Total this audit: 2
Total last audit: 2
Repeated from last audit: 0
Release Date: March 22, 2011
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 www.auditor.illinois.gov
____________________________
SYNOPSIS
• The Regional Office of Education #20 did not have
sufficient internal controls over payroll.
• The Regional Office of Education #20 did not have
sufficient internal controls over compliance with laws and regulations.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
INTERNAL CONTROL OVER PAYROLL
The Regional Office of Education #20 did not have sufficient
internal controls over payroll. The
Regional Superintendent of Schools is responsible for establishing and
maintaining an internal control system over the payroll process to prevent
errors and fraud.
During testing of internal controls, auditors noted gross
salary for 3 out of 40 employees had increased without documented authorization
of the Regional Superintendent.
Unauthorized changes in payroll rates could result in employees
receiving incorrect payment for their services.
(Finding 10-1, page 12a)
Auditors recommended that as part of its internal control
over payroll, the Regional Superintendent should authorize all changes in
salary. This can be accomplished with a
new contract or a pay increase authorization signed by the Regional
Superintendent.
The Regional Office of Education #20 responded that
management will prepare and sign a document indicating any and all changes in
salary.
CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS
The Regional Office of Education #20 did not have sufficient
internal controls over compliance with laws and regulations. The statutory requirements of 105 ILCS
5/17-19 for establishing a line of credit by Regional Superintendents requires
the following:
• The Regional Superintendent must approve the borrowing by
Executive Order prior to obtaining any financing;
• The Regional Office of Education must obtain a letter from
the Illinois State Board of Education documenting the amount of funding that is
due to the Regional Office of Education; and
• Any loans taken out must be repaid within 60 days of
receiving the funding from the Illinois State Board of Education.
The Regional Office of Education #20 obtained a line of
credit on November 17, 2009 and on May 17, 2010. The Regional Office of Education did not
prepare an executive order to approve the borrowing nor had the Regional Office
received a letter from the Illinois State Board of Education documenting the
amount the State owed the Regional Office for the line of credit obtained on
May 17, 2010. In addition, the amounts
borrowed on the lines of credit were not repaid within 60 days of receiving
funding from the Illinois State Board of Education. (Finding 10-2, page 12b)
The auditors recommended the Regional Office of Education
#20 implement a policy for ensuring the Regional Office complies fully with all
new regulations and mandates.
The Regional Office of Education #20 responded that it will
(1) prepare an Executive Order prior to obtaining any financing, (2) be certain
to obtain a letter from the Illinois State Board of Education documenting the
amount of funding that is due to the Regional Office of Education, and (3)
repay loans within 60 days of receiving the funding from the Illinois State Board
of Education.
AUDITORS’ OPINION
Our auditors state the Regional Office of Education #20’s
financial statements as of June 30, 2010 are fairly presented in all material
respects.
WILLIAM G. HOLLAND
Auditor General
WGH:JRB
AUDITORS ASSIGNED: Kemper CPA Group, LLC were our special assistant auditors.