REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #21
FRANKLIN, JOHNSON, MASSAC AND WILLIAMSON
COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2023

Release Date:  July 17, 2024

FINDINGS THIS AUDIT: 2

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

FINDINGS LAST AUDIT: 0

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

• (23-1) The Regional Office of Education
#21 did not have adequate internal controls
over the preparation of the Schedule of
Expenditures of Federal Awards.


• (23-2) The Regional Office of Education
#21 did not have sufficient internal
controls over financial statement
preparation.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER THE
PREPARATION OF THE SCHEDULE OF EXPENDITURES
OF FEDERAL AWARDS

During review of the Regional Office of
Education #21’s (ROE’s) Schedule of
Expenditures of Federal Awards (SEFA), it
was noted the ROE did not have sufficient
internal controls over the preparation of
the SEFA to ensure all federal expenditures
during the fiscal year were reported in the
SEFA and information in the SEFA was
accurately reported.

The ROE is required to maintain a system of
controls over the preparation of the SEFA.
The ROE’s internal controls over SEFA
preparation should include adequately
trained personnel with the knowledge and
expertise to prepare and/or thoroughly
review the SEFA to ensure that they are free
of material misstatements and include all
disclosures as required by federal
guidelines.

Auditors noted the following in the
originally submitted SEFA:

• Federal expenditures from the New
Principal Mentoring Program of $63,495;
Partners to LEAD-PTL2 of $82,894; Leading
while Learning Program of $29,966; and The
Bridge Project of $11,479 were reported in
the SEFA. Auditors verified that the sources
are not coming from Federal sources.
• Assistance Listing Number 84.425D, Social
Emotional Learning and Trauma Response
passed-through to subrecipients amount of
$613,124 was not included in the SEFA.
• Expenditures amounting to $8,262 were
incorrectly reported on the SEFA as
Assistance Listing Number 97.036 Public
Assistance Program.

The ROE subsequently revised its SEFA to
correct these errors.

Regional Office management indicated this
was an oversight. (Finding 23-001, pages 16
– 18)

The auditors recommended the ROE should
implement comprehensive preparation and/or
review procedures as part of their internal
control over the preparation of the SEFA to
ensure the SEFA, including disclosures, are
complete and accurate. These procedures
should be performed by a properly trained
individual(s) possessing a thorough
understanding of the applicable federal
guidelines and knowledge of the ROE’s grant
programs and activities.

ROE Response: Following the issuance of this
finding, ROE No. 21 has engaged a new
accounting firm to provide consultation on
new grant agreements and ensure accuracy of
ROE No. 21 reporting procedures. In
addition, with reference to ROE No. 21 being
cited solely for inaccuracies in financial
statement preparation, new reconciliation
procedures have been implemented to ensure
accurate reporting of ROE No. 21 activity by
outsourced services. ROE No. 21 is currently
transitioning to a new service provider that
meets our stringent accuracy standards and
has the resources to closely collaborate
with ROE No. 21 staff to ensure precise
reporting of ROE No. 21 activity.

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #21 (ROE)
did not have sufficient internal controls
over financial statement preparation.

105 ILCS 5/2-3.17a allows 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 financial statements for audit. The
ROE has chosen to utilize the cash basis of
accounting for financial reporting.

The ROE is required to maintain a system of
controls over the preparation of financial
statements, in accordance with its selected
basis of accounting. The ROE’s internal
controls over financial reporting should
include adequately trained personnel with
the knowledge and expertise to prepare and/
or thoroughly review financial statements to
ensure that they are free of material
misstatements and include all disclosures as
required by the Governmental Accounting
Standards Board (GASB).

During review of the ROE’s financial
information, it was noted the ROE did not
have sufficient internal controls over the
financial reporting process to ensure
financial statement transactions were
accurately reported as follows:

• During the auditors’ review of grant
agreements, auditors noted the program
revenue that was passed-through Regional
Office of Education #19 for New Principal
Mentoring Program of $58,762 and Partners to
LEAD-PTL2 of $76,610 and Passed-through
Regional Office of Education #17 Leading
While Learning Program of $28,270 were
verified to be vendor contract agreements
instead of subgrants. These revenues should
have bene reported as local sources instead
of federal sources. Expenditures related to
these programs should not be reported on the
Schedule of Expenditures of Federal Awards
(SEFA).

• During review of pension contributions to
the Defined Benefit Pension Plan pooled
under the Illinois Municipal Retirement Fund
(IMRF) and the Teacher’s Retirement System
of the State of Illinois (TRS), the amount
reported as pension expense in the financial
statements was overstated by $30,828 and
should have been included in the salaries
and benefits expense. In addition, Other
Post-Employment Benefits (OPEB) expense in
the financial statements was understated by
$958.

• Changes from the first two bullets above
resulted in adjustments to the balances of
various programs’ cash account, revenue, and
expenditure line items, as well as the
corresponding Budget Comparison Schedules.

• Financial statement notes did not disclose
a vehicle amounting to $11,673 or copy
machine leases amounting to $12,230 as
annual expenses.

The ROE subsequently revised its financial
statements to correct these errors.

Regional Office management indicated this
was an oversight. (Finding 23-002, pages 19
– 20)

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 basis of accounting
selected for financial statements, GASB
pronouncements, and knowledge of the ROE’s
activities and operations.

ROE Response: Following the issuance of this
finding, ROE No. 21 has engaged a new
accounting firm to provide consultation on
new grant agreements and ensure accuracy of
ROE No. 21 reporting procedures. In
addition, with reference to ROE No. 21 being
cited solely for inaccuracies in financial
statement preparation, new reconciliation
procedures have been implemented to ensure
accurate reporting of ROE No. 21 activity by
outsourced services. ROE No. 21 is currently
transitioning to a new service provider that
meets our stringent accuracy standards and
has the resources to closely collaborate
with ROE No. 21 staff to ensure precise
reporting of ROE No. 21 activity.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #21’s financial statements as of
June 30, 2023 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:JMM