FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
CONTROLS OVER COMPLIANCE WITH LAWS AND
REGULATIONS
The Illinois School Code (105 ILCS
5/3-14.11) requires the Regional Superintendent to examine at least once each
year all books, accounts, and vouchers of every school treasurer in his
educational service region, and if he finds any irregularities in them, to
report them at once, as directed by the School Code.
The Regional Office did not examine at
least once each year all books, accounts, and vouchers of every school
treasurer in the educational service region.
Regional Office officials noted they believe the mandate is outdated
and that they are satisfying the intent of the statute by other reviews they
undertake. For example, the Regional Superintendent has been examining school
district financial statements on an annual basis. This mandate has existed in its current form
since at least 1953.
The Illinois School Code (105 ILCS 5/3-5)
requires the Regional Superintendent to present under oath or affirmation to
the county board at its meeting in September, and as nearly quarterly
thereafter as it may have regular or special meetings, a report of all his
acts as county superintendent, including a list of all the schools visited
with the dates of visitation. This
mandate has existed in its current form since at least 1953.
The Regional Office did not
present at the September county board meeting, and as nearly quarterly
thereafter, a report of all his acts including a list of all the schools
visited and dates of visitation. The
Regional Superintendent submitted to the county board his annual report. The annual report included statistics on
major areas of activities of the ROE, including the inspections of school
buildings within its region. Details
of the dates of visits and other statistics are provided to the board upon
request.
The Illinois School Code (105 ILCS
5/3-14.5) requires the Regional Superintendent to visit each public school in
the county at least once a year, noting the methods of instruction, the
branches taught, the textbooks used, and the discipline, government and
general condition of the schools. This
mandate has existed in its current form since at least 1953.
The Regional Superintendent performs
compliance inspections for each public school in his region on a rotational
basis every five years instead of annually.
The Illinois Public School Accreditation Process Compliance Component
document completed at these visits includes many of the items delineated in
105 ILCS 5/3-14.5, but does not include a review of the methods of
instruction and the textbooks used in the district.
Finally,
the Illinois School Code 105 ILCS 5/3-7 states that each school district
shall, as of June 30 each year, cause an audit to be made of its
accounts. Each school district shall
on or before October 15 of each year, submit an original and one copy of such
audit to the Regional Superintendent.
If any school district fails to supply a copy of such audit report on
or before October 15, or within such time extended by the Regional
Superintendent from that date, not to exceed 60 days, then it shall be the
responsibility of the Regional Superintendent to cause such audit to be made.
The Regional Office of
Education #24 had 4 school districts that did not submit their audited
reports by October 15, 2005 and there were no extension forms on file or
approved by the Superintendent. According to the Regional Superintendent,
requests for extensions were received by phone and approved by him. (Finding 06-1, pages 12-15)
The Regional Office accepted the
recommendation to comply with the statutory requirements. The Regional Office responded that with
regards to compliance with 105 ILCS 5/3-14.11 and 105 ILCS 5/3-14.5, the
Illinois Association of Regional Superintendents of Schools and the Illinois
State Board of Education have agreed to seek legislation to remove
duplicative and/or obsolete sections of the Illinois School Code. Both parties believe that 105 ILCS 5/3-7 of
the Illinois School Code and 23 Ill.
Adm. Code 1.20, respectively, contain more current, thorough, and
comprehensive requirements concerning a public school district’s financial
transactions. As a result, the two
parties working together will seek legislation to repeal these two sections
of the Illinois School Code.
Regarding 105 ILCS 5/3-5, the Regional Superintendent,
having served as Assistant Regional Superintendent for 24 years, followed
previous practice within the region.
When possible, the Regional Superintendent will, in addition to the
annual report and monthly meetings with the county’s oversight committee,
attempt to comply with a law which appears to be duplicative of the legal
requirement for an annual report.
With regards to 105 ILCS 5/3-7, the
Regional Superintendent will inform the school districts that all requests for
extensions of time shall be submitted in writing. The Regional Superintendent will document
approvals/disapprovals of all requests.
In cases where the extensions requested exceed the 60-day time
element, consultation with the Illinois State Board of Education will be made
and so documented.
FAILURE TO FULLY SECURE AND COLLATERALIZE CASH
BALANCE IN EXCESS OF $100,000
The Regional Office of Education #24’s
amount of funds deposited at a financial institution exceeded the amount
pledged as collateral by $29,558 at June 30, 2006. As of June 30, 2006, cash account balances
of two accounts with one bank totaled $220,240. The Federal Deposit Insurance Corporation
(FDIC) covers up to a maximum of $100,000.
Additional collateral totaling $90,682 was received as of June 30,
2006. No additional collateral was
obtained for the balance of $29,558.
The Public Funds Deposit Act (30 ILCS 225/1) gives the authorization
for deposits in excess of the federally insured limit to be covered by
pledged collateral held by the financial institutions’ trust department in
the Regional Office of Education #24’s name.
In addition, prudent business practice requires that all cash and
investments held by financial institutions for the ROE be adequately covered
by depository insurance or collateral.
(Finding 06-2, pages 16-17)
The Regional Office of Education #24
agreed with the recommendation and has made arrangements with the bank to
automatically pledge securities for any deposit amounts in excess of the FDIC
insured amount. The Regional Office also stated that the two accounts in
question are separate and that the finding is a result of an oversight and
unusual cash flow balances.
INACCURATE TIMESHEETS
The Regional Office of Education #24 had
inaccuracies in employee timesheets.
From the sample selected, four employees’ total hours worked per
detailed timesheet did not agree to the total hours worked indicated in the
timesheet summary in five pay periods.
The differences ranged from 5.5 more hours on the time sheet summary
than on the detailed timesheet, to 2.5 hours more on the detailed time sheet
than on the summary. According to ROE
management, the number of hours as indicated in the timesheet summary is the
correct number of hours worked. The
timesheets were approved by the respective supervisors and program directors
and the summary portion is used to calculate the payroll.
Sound internal controls also require that
timesheets be accurately reported and payroll computed based on accurate timesheets. Timecards/Attendance records should be
checked for computations of payroll period hours and appropriate control
totals should be
maintained in the
timesheets for reconciliation with timecards/attendance records. (Finding
06-3, pages 18-19)
The Regional Office of
Education #24 agreed with the recommendation stating the procedures for
timesheets have already been revised. The Regional Office stated that at the
Management Team meeting of November 13, 2006, all coordinators were trained
in the new time sheet procedures. All
coordinators in turn were to train their respective staff members in the new
time sheet procedures and all time sheets were to be accurate by December 1,
2006.
AUDITORS’ OPINION
Our auditors state the Regional
Office of Education #24’s financial statements as of June 30, 2006 are fairly
stated in all material respects.
_____________________________________
WILLIAM
G. HOLLAND, Auditor General
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SPECIAL ASSISTANT AUDITORS
Our special assistant
auditors were E.C. Ortiz & Co., LLP.
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