REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #20: EDWARDS,
GALLATIN, HAMILTON, HARDIN, POPE, SALINE,
WABASH, WAYNE, AND WHITE COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  June 28, 2018

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 4

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

• (17-1) The Regional Office of Education
#20 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 #20 (ROE)
did not have sufficient internal controls
over the financial reporting process. While
the ROE maintained controls over the
processing of most accounting transactions,
there were not sufficient controls over the
preparation of generally accepted
accounting principles (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.

The ROE is required to maintain a system of
controls over the preparation of financial
statements in accordance with GAAP. The
Regional Office’s internal controls over
GAAP financial reporting should include
adequately trained personnel with the
knowledge, skills, and experience to
prepare GAAP based financial statements and
include all disclosures as required by the
Governmental Accounting Standards Board
(GASB).

During review of the Regional Office’s
financial information, auditors noted the
ROE’s financial information required
material adjusting entries to accounts
receivable, accounts payable, accrued
payroll, interfund loans, and unavailable
revenue in order to present its financial
statements in accordance with GAAP. In
addition, the ROE did not have adequate
controls to record and report net accrued
pension liabilities, deferred outflows of
resources, deferred inflows of resources,
and pension expenses in accordance with
GAAP. Proposed adjusting entries were
approved and accepted by ROE management.

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 2017-001, pages 11a-11b) This
finding was first reported in 2011.

The auditors recommended that as part of
internal control over the preparation of
financial statements, the ROE should
implement comprehensive preparation
procedures to ensure that the financial
statements are complete and accurate. These
procedures should be performed by a
properly trained individual possessing a
thorough understanding of applicable GAAP,
GASB pronouncements, and knowledge of the
ROE’s activities and operations.

ROE Response: The Regional Office accepts
the auditor’s recommendation.

Prior Year ROE Response: The Regional
Office accepts the auditor’s
recommendation. The ROE will work with
other ROEs for professional development and
necessary training to ensure that the
proper employees possess the knowledge
required to compile the necessary GAAP
based financial statements.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #20’s financial statements as of
June 30, 2017 are fairly presented in all
material respects.

This financial report was conducted by the
firm of Doehring, Winders & Co., LLP.

KELLY MITTELSTAEDT
Audit Manager

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:JRB