REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #30:
ALEXANDER, JACKSON, PERRY, PULASKI,
AND UNION COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  September 7, 2022

FINDINGS THIS AUDIT:  2

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  1 -- 1 -- 2
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 1 -- 2

FINDINGS LAST AUDIT: 1

Category 1: Findings that are material
weaknesses in internal control and/or
a qualification on compliance with
State laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, 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 and Full Report are
also available on the worldwide web at
www.auditor.illinois.gov

INTRODUCTION

• (20-1) The Regional Office of
Education #30 did not properly
recognize and disclose postemployment
benefits other than pensions as
required by Governmental Accounting
Standards Board Statement No. 75.

• (20-2) The Regional Office of
Education #30’s salaries and benefits
were not supported by proper time and
effort documentation.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

DEPARTURE FROM U.S. GENERALLY ACCEPTED
ACCOUNTING PRINICPLES

The Regional Office of Education #30
(ROE) did not properly recognize and
disclose postemployment benefits other
than pensions (OPEB) as required by
Governmental Accounting Standards
Board (GASB) Statement No. 75 in its
financial statements or notes.

The ROE participates in a defined
benefit plan, the Jackson County
Health Insurance Plan, which provides
OPEB to its employees in exchange for
employee services rendered. This plan
is administered by the Jackson County
government which obtains the actuarial
valuation of the OPEB. The ROE is
included in this actuarial valuation;
however, the ROE has not been
segregated from the rest of the
Jackson County government in the
actuarial valuation. As such, the
assets, liabilities, deferred outflows
of resources, deferred inflows of
resources, and/or expenditures of the
Jackson County Health Insurance plan
related to the ROE, as required by
GASB Statement No. 75, could not be
determined.

The Illinois Administrative Code (74
Ill. Adm. 420.320 (c) (1)) requires
that each Regional Office of Education
maintain the accounting records on the
cash or accrual basis of accounting.
Additionally, 105 ILCS 5/2-3.17a
allows that a Regional Office of
Education or Educational Service
Center may utilize a cash basis,
modified cash basis, or generally
accepted accounting principles (GAAP)
basis of accounting to prepare the
financial statements for audit.

GASB Statement No. 75 – Accounting and
Financial Reporting for Postemployment
Benefits Other Than Pensions (OPEB),
requires that employers recognize and
disclose OPEB expense. Net OPEB
obligations, if any, should be
reported as liabilities (or assets if
overfunded) in the financial
statements. For financial reporting
purposes, an actuarial valuation,
prepared in accordance with GASB
Statement No. 75, is required to
measure and disclose the annual OPEB
cost. In certain circumstances, an
alternative measurement method can be
applied instead of obtaining an
actuarial valuation.

Regional Office management indicated
their actuarial valuation information
was not segregated from the rest of
the Jackson County government in the
actuarial plan that was obtained for
the Jackson County Health Insurance
Plan as of November 30, 2019. (Finding
2020-001, pages 11a – 11b) This
finding was first reported in 2018.

The auditors recommended the ROE
should convey the requirements of GASB
Statement No. 75 to the Jackson County
government and work to obtain the
information needed to comply.
Additionally, Regional Office
management should determine if
changing to the cash basis or modified
cash basis would be allowable or
beneficial to the ROE and users of its
financial statements.

ROE Response: The Regional Office
agrees with the finding and corrective
actions are being implemented.

SALARIES AND BENEFITS NOT SUPPORTED BY
PROPER TIME AND EFFORT DOCUMENTATION

The Regional Office of Education #30
(ROE) did not have formal written
policies related to proper time and
effort documentation. As such, proper
time and effort documentation was not
always maintained or complete.

The Illinois State Board of Education
(ISBE) State and Federal Grant
Administration Policy, Fiscal
Requirements and Procedures requires
that auditable “time and effort”
documentation should be written, after
the fact (not estimated or budgeted)
documentation of how the time was
spent. Time and effort reports
totaling 100 percent among all
projects should be prepared by any
staff with salary charged (1) directly
to a federal award, (2) directly to
multiple federal or State awards, or
(3) directly to any combination of a
federal award or other federal, State,
or local funds. Additionally, all time
and effort sheets and other supporting
documentation must be retained at the
local level and be available for
review or audit any time within three
years after termination of the project
or until the local entity is notified
in writing from ISBE that the records
are no longer needed for audit or
review.

Regional Office management indicated
this was an oversight. (Finding
20-002, page 11c)

The auditors recommended the ROE
should implement written policies and
procedures over time and effort
reporting to ensure proper
documentation is being obtained and/or
maintained in all instances to
properly distribute salary and benefit
costs for employees who work in whole
or in part on grant program activity
in accordance with the ISBE State and
Federal Grant Administration Policy,
Fiscal Requirements and Procedures.
This would include having the
documentation reviewed and formally
approved by a supervisor.

ROE Response: The Regional Office
agrees with the finding and corrective
actions are being implemented.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #30’s financial
statements as of June 30, 2020 are
fairly stated in all material
respects, except for the effects of
not recognizing or disclosing
postemployment benefits other than
pensions for the Jackson County Health
Insurance Plan in the Statement of Net
Position and Statement of Activities.

This financial audit was conducted by
the firm of Kemper CPA Group LLP.

JOE BUTCHER
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:JMM