REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #31: KANE COUNTY

FINANCIAL AUDIT
For the Year Ended June 30, 2014

Release Date:  January 29, 2015

FINDINGS THIS AUDIT:  1

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

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
WILLIAM G. HOLLAND, 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

SYNOPSIS

• (14-1) The Regional Office of Education #31
did not have sufficient internal controls over
the financial reporting process.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT PREPARATION

The Regional Office of Education #31 is
required to maintain a system of controls over
the preparation of financial statements in
accordance with generally accepted accounting
principles (GAAP).  The Regional Office’s
internal controls over GAAP financial
reporting should include adequately trained
personnel with the knowledge, skills and
experience to prepare GAAP based financial
statements and include all disclosures as
required by the Governmental Accounting
Standards Board (GASB).

The Regional Office of Education #31 did not
have sufficient internal controls over the
financial reporting process.  While the
Regional Office maintains controls over the
processing of most accounting transactions,
there were 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 and correct
financial statement misstatements and
disclosure omissions in a timely manner.

During review of the Regional Office of
Education #31’s financial information prepared
by the Regional Office, auditors noted that
the Regional Office did not have adequate
controls over the maintenance of records of
cash, accounts receivable, accounts payable,
and unavailable revenue.  While the Regional
Office did maintain records to indicate the
balances of cash, accounts receivable,
accounts payable, and unavailable revenue,
material audit adjustments were proposed in
order to ensure financial statement balances
were materially accurate.

Regional Office of Education #31 management
did not effectively detect all of the material
adjustments needed in order to present
financial statements in accordance with GAAP
in a timely manner.  (Finding 2014-001, pages
11-12) This finding was first reported in
2010.

The auditors recommended that, as part of
internal control over the preparation of
financial statements, including disclosures,
the Regional Office of Education #31 should
implement a comprehensive preparation and/or
review procedure to ensure that the financial
statements, including disclosures, are
complete and accurate.  These procedures
should be performed by a properly trained
individual possessing a thorough understanding
of applicable generally accepted accounting
principles, GASB pronouncements, and knowledge
of the Regional Office’s activities and
operations.

The Regional Office of Education #31 responded
that the Business Office will provide to the
Superintendent and Cabinet members regular and
timely financial reports. These reports
include but are not limited to grant
reporting, bank reconciliations, monthly
financial reporting, expense comparisons, and
any other report needed for discussion of the
Regional Office’s financial well-being.  (For
previous Regional Office response, see Digest
Footnote #1.)

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #31’s financial statements as of
June 30, 2014 are fairly presented in all
material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:KJM

AUDITORS ASSIGNED:  Winkel, Parker & Foster,
CPA PC were our special assistant auditors.

DIGEST FOOTNOTE

#1: Controls Over Financial Statement
Preparation - Previous Regional Office
Response

In its prior response in 2013, the Regional
Office of Education #31 responded that the
Business Office will provide to the
Superintendent and Cabinet members regular and
timely financial reports. These reports
include but are not limited to grant
reporting, bank reconciliations, monthly
financial reporting, expense comparisons, and
any other report needed for discussion of the
Regional Office’s financial well-being.