FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS
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 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 management, they were unaware of the requirement to submit
these reports to its county boards.
The Illinois School
Code (105 ILCS 5/3-14.11) also 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 management
believed that their review of each school district’s annual report and subsequent
follow-up with those school districts having audit exceptions would be
adequate for compliance with the requirements. (Finding 05-1, pages 12-14)
The Regional Office
of Education #26 accepted the recommendation to comply with 105 ILCS 5/3-6,
noting that the required report was filed for the upcoming audit period. The Regional Office also noted that it
would seek a legislative solution to 105 ILCS 5/3-14.11 and other obsolete
passages.
LACK OF COST ALLOCATION PLAN
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 the provisions of OMB Circular A-87 or be
included in the ROE’s cost allocation plan.
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.
Where an accumulation of indirect costs will ultimately result in
charges to a Federal Award, a cost allocation plan is required as described
in Attachments C, D and E of OMB Circular A-87, Cost Principles for State,
Local, and Indian Tribal Governments.
(Finding 05-2, pages 15-16).
This finding was first reported in 2003.
The Regional Office of Education #26 accepted the
recommendation and has contacted a local certified public accounting firm to
address cost allocations. (For
previous Regional Office response, see Digest Footnote #1.)
FAILURE TO ALLOCATE INTEREST EARNED
The Regional Office of Education #26 did not allocate
interest earned from their commingled bank account to each source of funds.
The
Regional Office of Education Accounting Manual states that if
dollars from two or more sources of funds (SOF) are combined in one bank
account and/or fund, the ROE must allocate, no less than monthly, a portion
of the interest earned on that bank account or fund to each SOF. (Finding 05-3, pages 17-19)
The Regional Office of Education #26 accepted the
recommendation, noting that it is in the process of determining an interest
allocation plan whereby they can eliminate the commingling of cost accounts.
LACK OF AUTHORIZED APPROVAL ON TIMESHEETS
The Regional Office of Education #26 did not require that
all employees’ timesheets be approved by their supervisor during the fiscal
year. The Regional Office paid two
employees $11,352 during the fiscal year based off timesheets submitted by
the applicable employee. One employee
is hourly and timesheets are required for each day worked. The other employee is paid for 35 hours
each week and anything over that amount is required to be tracked via
timesheet. These timesheets were not
reviewed and approved by their supervisor before submission to the payroll
department.
Good business practice dictates that employee timesheets
should be reviewed and approved by the employee’s supervisor. Unapproved timesheets may result in
incorrect compensation for services provided. (Finding 05-4, pages 20-21)
The Regional Office of Education #26 accepted the
recommendation and has instructed all supervisors to review and approve all
timesheets by signing the timesheets.
AUDITORS’ OPINION
Our auditors state the
Regional Office of Education #26’s financial statements as of June 30, 2005
are fairly presented in all material respects.
_____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KJM:ro
SPECIAL
ASSISTANT AUDITORS
Our
special assistant auditors were Sikich LLP.
DIGEST
FOOTNOTE
#1: LACK OF COST
ALLOCATION PLAN – Previous Regional Office Response
In
its prior response in 2004, the Regional Office accepted the recommendation,
responding it was in the process of developing a cost allocation plan in
accordance with OMB Circular A-87, which addresses allowable 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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