FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
NONCOMPLIANCE WITH STATE MANDATES
The Regional
Office of Education #26 did not comply with certain statutory administrative
requirements. 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 School Code (105
ILCS 5/3-12) also requires that on or before January 1 of each year, the
Regional Superintendent shall publish in a newspaper of general circulation
published in the region or post in each school building under his/her
jurisdiction, certain information regarding the Office’s Institute Fund. According to Regional Office management,
they were unaware of these requirements and had not submitted the required
reports. (Finding 04-1, pages
12-13).
The Regional Office
of Education #26 accepted the recommendation stating it would submit the
required reports before January 1, 2005.
The Regional Office published a copy of the Institute Fund activity in
the December 2004 newsletter.
NO FISCAL POLICIES AND PROCEDURES MANUAL
The Regional Office of Education #26 did not maintain a
fiscal policies and procedures manual.
A sound system of internal control requires that the Regional Office
maintain a current fiscal policies and procedures manual. (Finding 04-2, pages 14-15) This finding is repeated from our 2003
audit.
The Regional Office of Education #26 accepted the recommendation
stating it developed a fiscal policies and procedures manual that addresses
accounting functions and internal controls for all programs. (For previous Regional Office response,
see Digest Footnote #1.)
COST ALLOCATION PLAN FOR FEDERAL AWARDS
The Regional
Office of Education #26 did not maintain a cost allocation plan in accordance
with OMB Circular A-87 for indirect costs.
The Regional Office invoices the various grants and programs it
administers for central service activities, including support salaries and
related benefits, accounting and secretarial services, and space rent, based
on the grant’s budgeted costs (rather than as part of a Cost Allocation
Plan). Such salaries and benefits are
allowable under Circular A-87, however, where employees work on multiple
activities or cost objectives, a distribution of their salaries or wages is
required to be documented in accordance with provisions of Circular A-87 or
be included in the ROE’s cost allocation plan. Rent costs are also an allowable expenditure, subject to
limitations included in Circular A-87.
Grants, cost reimbursement contracts and other agreements
with the federal government should bear their fair share of costs recognized
under principles established by the federal Office of Management and Budget
(OMB). Costs are allocable to federal
awards if the goods or services involved are chargeable or assignable to the
award in accordance with the relative benefits received. (Finding 04-3, pages 16-18). This finding is repeated from our 2003
audit.
The Regional Office of Education #26 accepted the
recommendation, stating it is in the process of developing a cost allocation
plan that addresses allowable indirect costs to all applicable programs. (For
previous Regional Office response, see Digest Footnote #2.)
AUDITORS’ OPINION
Our auditors state the Regional
Office of Education #26’s financial statements as of June 30, 2004 are fairly
presented in all material respects.
_____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KJM:ro
SPECIAL
ASSISTANT AUDITORS
Our
special assistant auditors were Sikich Gardner & Co., LLP.
DIGEST
FOOTNOTES
#1: NO FISCAL POLICIES AND
PROCEDURES MANUAL-- Previous Regional Office Response
In the prior response in
2003, the Regional Superintendent accepted the recommendation, responding the
Regional Office was in the process of developing a fiscal policies and
procedures manual that addresses accounting functions and internal controls.
#2: LACK OF COST
ALLOCATION PLAN – Previous Regional Office Response
In
its prior response in 2003, the Regional Superintendent accepted the
recommendation, responding it was in the process of developing a cost
allocation plan that addresses allowable indirect costs to all applicable
programs.
Complete
Regional Office responses to prior findings are available upon request from
the Auditor General’s Office.
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