REPORT DIGEST REGIONAL OFFICE OF EDUCATION #27 FINANCIAL AUDIT For the Year Ended: June 30, 2009 Summary of Findings: Total this audit 2 Total last audit 2 Repeated from last audit 2 Release Date: March 3, 2010
State of Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL
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Report are also available on the worldwide web at http://www.auditor.illinois.gov
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SYNOPSIS
{Expenditures
and Revenues are summarized on the reverse page.} |
REGIONAL OFFICE OF
EDUCATION #27
FINANCIAL AUDIT
For The Year Ended June
30, 2009
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FY 2009
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FY 2008
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TOTAL REVENUES |
$2,263,244 |
$2,406,025 |
Local Sources |
$526,148 |
$586,815 |
% of Total Revenues |
23.25% |
24.39% |
State Sources |
$1,583,793 |
$1,755,836 |
% of Total Revenues |
69.98% |
72.98% |
Federal Sources |
$153,303 |
$63,374 |
% of Total Revenues |
6.77% |
2.63% |
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TOTAL EXPENDITURES |
$2,231,264 |
$2,308,967 |
Salaries and Benefits |
$1,170,306 |
$1,170,643 |
% of Total Expenditures |
52.45% |
50.70% |
Purchased Services |
$397,720 |
$336,728 |
% of Total Expenditures |
17.82% |
14.58% |
All Other Expenditures |
$663,238 |
$801,596 |
% of Total Expenditures |
29.72% |
34.72% |
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TOTAL NET ASSETS |
$403,547 |
$371,567 |
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INVESTMENT IN
CAPITAL ASSETS |
$0 |
$0 |
Percentages
may not add due to rounding. |
REGIONAL
SUPERINTENDENT |
During Audit Period: Honorable Jodi L. Scott Currently: Honorable Jodi L. Scott |
The Regional Office
of Education #27 did not have sufficient internal controls
over the financial reporting process.
The Regional Office of Education #27 did not disburse
to other funds some of the monies it received into the Distributive Fund. |
FINDINGS, CONCLUSIONS AND RECOMMENDATIONSControls
Over Financial Statement Preparation
The Regional Office of Education #27
is required to maintain a system of controls over the preparation of
financial statements, including disclosures, in accordance with generally
accepted accounting principles (GAAP).
The ROE internal controls over GAAP financial reporting should include
adequately trained personnel with the knowledge and expertise to prepare
and/or thoroughly review GAAP based financial statements to ensure that they are
free of material misstatements and include all disclosures as required by the
Governmental Accounting Standards Board (GASB). The Regional Office of Education #27
did not have sufficient internal controls over the financial reporting
process. The Regional Office maintains
their accounting records on the cash basis of accounting. While the Regional Office maintains controls
over the processing of most accounting transactions, there are not sufficient
controls over the preparation of the GAAP based financial statements for
management or employees in the normal course of performing their assigned
functions to prevent or detect financial statement misstatements and
disclosure omissions in a timely manner. For example, auditors, in their review of
the ROE’s accounting records, noted the following:
According to ROE officials, they did
not have adequate funding to hire and/or train their accounting personnel in
order to maintain a system of internal control over the preparation of
financial statements in accordance with GAAP. (Finding 09-1, pages 10-11) This
finding was first reported in 2007. The auditors recommended that, as
part of its internal control over the preparation of its financial
statements, including disclosures, the Regional Office of Education #27
should implement a comprehensive preparation and/or review procedure to
ensure that the financial statements, including disclosures, are complete and
accurate. Such procedures should be
performed by a properly trained individual(s) possessing a thorough
understanding of applicable generally accepted accounting principles, GASB
pronouncements, and knowledge of the Regional Office of Education’s
activities and operations. The
Regional Office of Education #27 responded that it understands the nature of this finding and realizes that this
circumstance is not unusual in an organization of this size. The Regional Office management is currently
confident with the abilities of the accounting staff to prepare cash basis
financial information as needed throughout the year. Management will review year end reporting
controls annually and investigate the cost of training staff to reach an
appropriate level of expertise to do a comprehensive preparation and/or
review of financial statements.
Management will pursue additional training when it is considered cost
beneficial since training costs would take away from the funds available to
provide educational services for the schools in the region. (For
previous Regional Office response, see Digest Footnote #1.) INADEQUATE CONTROLS OVER THE DISTRIBUTIVE ACCOUNT The Regional Office of Education #27 did
not disburse to other entities or funds some of the monies it received into
the Distributive Fund. The ROE Accounting
Manual states that distributive monies are those that flow from the Illinois
State Board of Education (ISBE) to the ROE to be disbursed for use by other
entities and/or ROE programs.
Distributed monies only include State and federal funds. Use of the Distributive Fund should be
limited to accounting for the inflow and outflow of funds held in an agency
capacity for other entities and/or funds. As of June 30, 2008, there was a total of $39,546 that was received into the Distributive account, but not disbursed to the appropriate fund. During the year ended June 30, 2009, the ROE distributed $32,174 of this amount, leaving $7,372 still to be disbursed. Due to the ROE’s previous practice of paying various purchased services out of the Distributive account, there were no longer monies available in the Distributive account to disburse the remaining $7,372 received in prior years. These purchased services should have been paid with monies from the General Fund; therefore, the General fund owes $7,372 to the respective funds. Adjustments were necessary to make the financial statements for fiscal year 2009 properly reflect the activity of the ROE. Entries totaling $7,372 were required to reflect amounts due to other funds. The
Regional Office lacked internal controls over the Distributive account and
therefore monies that were received were not immediately disbursed. (Finding
09-2, pages 12-13) The auditors recommended that the
Regional Office of Education #27 should develop internal control procedures
to ensure that all monies received into the Distributive Fund are immediately
disbursed to the appropriate entity or fund.
The Regional Office of Education #27 responded that all funds have been distributed to the appropriate accounts or agency at this time. They noted that the ROE now has internal controls in place to ensure that all monies received into the Distributive account are disbursed in a timely manner. AUDITORS’ OPINION Our
auditors state the Regional Office of Education #27’s financial statements as
of June 30, 2009 are fairly presented in all material respects. _____________________________________ WILLIAM
G. HOLLAND, Auditor General WGH:KJM SPECIAL ASSISTANT AUDITORS Our special assistant auditors were Sulaski
& Webb CPAs. DIGEST FOOTNOTES
#1: Controls Over Financial
Statement Preparation - Previous Regional Office Response In its prior response in
2008, the Regional Office of Education #27 responded that it understands the
nature of this finding and realizes that this circumstance is not unusual in
an organization of this size. The
Regional Office management is currently confident with the abilities of the
accounting staff to prepare cash basis financial information as needed for
reporting throughout the year.
Management will review year end reporting controls annually and
investigate the cost of training staff to reach an appropriate level of
expertise to do a comprehensive preparation and/or review of financial
statements. Management will pursue
additional training when it is considered cost beneficial since training
costs would take away from the funds available to provide educational
services for the schools in the region. |
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