REPORT DIGEST REGIONAL OFFICE OF EDUCATION #24 GRUNDY
AND KENDALL COUNTIES FINANCIAL AUDIT (In Accordance with the For the Year Ended: June 30, 2004 Summary of Findings: Total this audit 3 Total last audit 3 Repeated from last audit 2 Release Date: July 27, 2005
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 is also
available on the worldwide web at http://www.state.il.us/auditor |
SYNOPSIS · The Regional Office of Education #24 documentation for receipts and disbursements should be improved. · The Regional Office of Education #24 did not have adequate segregation of duties for accounting in the local and distributive funds. · The Regional Office of Education #24 did not submit required information to the county by the January 1, 2004 deadline.
{Expenditures and Revenues are summarized on the reverse page.} |
REGIONAL
OFFICE OF EDUCATION #24
FINANCIAL AUDIT
For
The Year Ended June 30, 2004
|
FY 2004 |
FY 2003 |
TOTAL REVENUES |
$3,417,335 |
$2,714,691 |
Local Sources |
$343,942 |
$257,084 |
% of Total Revenues |
10.06% |
9.47% |
State Sources |
$1,027,194 |
$2,046,664 |
% of Total Revenues |
30.06% |
75.39% |
Federal Sources |
$2,046,199 |
$410,943 |
% of Total Revenues |
59.88% |
15.14% |
|
||
TOTAL EXPENDITURES |
$3,220,280 |
$2,804,419 |
Salaries and Benefits |
$2,168,173 |
$1,951,648 |
% of Total Expenditures |
67.33% |
69.59% |
Purchased Services |
$643,578 |
$399,037 |
% of Total Expenditures |
19.99% |
14.23% |
All Other Expenditures |
$408,529 |
$453,734 |
% of Total Expenditures |
12.69% |
16.18% |
|
|
|
TOTAL NET ASSETS1 |
$345,467 |
$142,955 |
|
|
|
INVESTMENT IN
CAPITAL ASSETS1 |
$43,862 |
$38,405 |
|
||
1
In fiscal year 2004,
Regional Offices of Education implemented Government Accounting Standards
Board (GASB) Statement No. 34 which established a new financial reporting
model for state and local governments.
Government-wide financial statements are prepared using full accrual
accounting that reports Total Net Assets.
The fiscal year 2003 ending general fixed assets have been restated to
reflect the changes required as part of the implementation of GASB Statement
No. 34. Percentages may not add due
to rounding. |
REGIONAL
SUPERINTENDENT |
During Audit Period: Honorable Thomas J. Centowski Currently: Honorable Thomas J. Centowski |
The Regional Office
of Education #24’s documentation for receipts and disbursements should be
improved.
The Regional Office of Education #24 did
not have adequate segregation of duties for accounting in the local and
distributive funds. The Regional Office
of Education #24 did not submit required information to the county by the
January 1, 2004 deadline. |
FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
INSUFFICIENT DOCUMENTATION FOR RECEIPTS AND DISBURSEMENTS In testing of receipts for the local funds, 2 of 20 items (10%) sampled totaling $1,256 did not have the copy of the check received nor any supporting documents to identify the nature and source of the amount received. In addition, the actual receipt dates were not evident on the available supporting receipts documents. In testing of disbursements and expenditures for the local funds, 1 of 20 items (5%) sampled totaling $242 did not have complete supporting documents. Also, for all 20 items sampled, only the invoice was presented to initiate processing of the check payment, and approval for the disbursement was not evident on the invoices. Sound internal controls over cash receipts require that
receipts be adequately supported to identify the actual date of receipt and
nature and source of the receipt in order to monitor timeliness and accuracy
of deposits as well as the accuracy of revenue recording. In addition, sound internal controls over
cash disbursements require all disbursements to be adequately supported,
approved by authorized personnel, and have supporting documents properly
canceled at time of signature to prevent duplicate payment. (Finding 04-1,
pages 12-13) This finding is repeated from our 2003 audit. The Regional Office of Education #24 accepted the recommendation, responding that changes have already been implemented. Approvals for payment will be noted on each invoice/supporting document. Copies of the invoices/supporting documents submitted to the county(ies) will be made and kept on file. (For previous Regional Office response, see Digest Footnote #1.) INADEQUATE SEGREGATION OF DUTIES The Regional Office of Education #24 did not have adequate segregation of duties for accounting in the local and distributive funds. The bookkeeper for the local and distributive funds performs the disbursement functions of invoice processing, check preparation, custodian of blank checks, recording transactions, and bank reconciliations. The bookkeeper also performs the functions of collecting cash and depositing and recording of cash receipts. Sound internal controls require adequate segregation of duties to ensure that effective checks and balances are in place to minimize the risk of loss. (Finding 04-2, page 14) This finding is repeated from our 2003 audit. The Regional Office of Education #24 accepted the recommendation, noting that the Regional Office has limited staff to provide for adequate segregation of duties. However, supervisory controls will be revised to include, where practical, the recommendations of the auditors. (For previous Regional Office response, see Digest Footnote #2.) NONCOMPLIANCE WITH STATE MANDATE
The Regional Office of Education #24 did not comply with a statutory administrative requirement. The Illinois School Code (105 ILCS 5/3-6)
requires the Regional Superintendent to report, in writing, to the county
board on or before January 1 of each year, stating: (1) the balance on hand at the time of the last report, and all
receipts since that date, with the sources from which they were derived; (2)
the amount distributed to each of the school treasurers in his or her county;
and (3) any balance on hand.
The Regional Superintendent is also required to submit, in writing, to
the county board a statement of the condition of the Institute Fund and of
any other funds in his or her care, custody or control. According to the Regional Office, the
annual report was submitted on January 13, 2004 due to the delay in
processing information supporting the report. (Finding 04-3, page 15). The Regional Office of Education #24 accepted the recommendation to submit the required report on time. AUDITORS’ OPINION Our auditors state the Regional Office of Education #24’s
financial statements as of June 30, 2004 are fairly stated 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: INSUFFICIENT DOCUMENTATION FOR DISBURSEMENTS -- Previous Regional Office Response
In
the prior response in 2003, the Regional Superintendent accepted the
recommendation, responding that the Regional Superintendent will approve all
invoices before payment is processed.
Invoices will be marked with the check number or stamped “paid”
subsequent to payment. #2: INADEQUATE SEGREGATION OF DUTIES -- Previous Regional Office Response In the prior response in
2003, the Regional Superintendent accepted the recommendation, responding that the Regional Office has limited staff
to provide for adequate segregation of duties. Under current work requirements, the Regional Office stated it
is not possible to assign additional duties to staff members nor is it
practicable to assign other duties to the bookkeeper. Consequently, supervisory controls will be
strengthened by implementing periodic checks on cash receipts and deposits as
well as disbursements. Complete Regional Office responses to prior findings are available upon request from the Auditor General’s Office. |