REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #32:
IROQUOIS AND KANKAKEE COUNTIES

FINANCIAL AUDIT (IN ACCORDANCE WITH
THE UNIFORM GUIDANCE)
FOR THE YEAR ENDED JUNE 30, 2019

Release Date:  AUGUST 24, 2021

FINDINGS THIS AUDIT:  2

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

SYNOPSIS

• (19-1) The Regional Office of
Education #32 did not have sufficient
internal controls over the financial
reporting process.

• (19-2) The Regional Office of
Education #32 did not have adequate
subrecipient monitoring documentation.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #32
(ROE) did not have sufficient internal
controls over the financial reporting
process. The ROE maintained its
accounting records on the cash basis
of accounting during the fiscal year
and posted year-end accrual and other
applicable entries for financial
statement purposes. While the ROE
maintained controls over the
processing of most accounting
transactions, there were not
sufficient controls over the
preparation of the generally accepted
accounting principles (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 errors
and omissions in a timely manner.

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

During review of the ROE’s financial
information prepared by the ROE,
auditors noted the ROE’s financial
information required a material
adjusting entry in order to present
its financial statements in accordance
with GAAP.

Regional Office management indicated
the complex requirements of GASB
statements will require additional
time and training before the ROE can
fully implement the requirements on
its own. (Finding 19-001, pages 13 –
14)

The auditors recommended that the ROE
should implement comprehensive
preparation and/or review procedures
as a part of its internal control over
the preparation of financial
statements to ensure the financial
statements, including disclosures, are
complete and accurate. These
procedures should be performed by a
properly trained individual(s)
possessing a thorough understanding of
the applicable GAAP, GASB
pronouncements, and knowledge of the
ROE’s activities and operations.

ROE Response: The ROE will train I-KAN
Staff to improve skills in
implementing comprehensive preparation
and/or review procedures as part of
internal control over the preparation
of financial statements.

NONCOMPLIANCE WITH SUBRECIPIENT
MONITORING

During the audit, auditors noted that
although the Regional Office of
Education #32 (ROE) provided
information to subrecipients regarding
the Teen REACH subaward, it did not
provide all of the data elements noted
in Title 2 U.S. Code of Federal
Regulations Part 200, Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards (Uniform Guidance),
such as the name of the federal
awarding agency, the federal award
date, and the Catalog of Federal
Domestic Assistance (CFDA) Number.
Auditors also noted the ROE was
providing the certification to the
Illinois Department of Human Services,
the funding agency for Teen REACH,
when required.  However, auditors
noted the certification was not
obtained from the subrecipients of
this program. In addition, auditors
noted that although the ROE had
procedures to monitor such
subrecipients based on a high risk
assessment, there was no formal
documentation of the assessed level of
risk of noncompliance for each
subrecipient as required by the
Uniform Guidance.

As an agency within the granting
hierarchy, the ROE is required to be
in compliance with requirements set
forth in the Uniform Guidance. The
Uniform Guidance (2 CFR 200.332(a))
requires the ROE to clearly identify
the subaward to the subrecipient,
noting specific data elements. The
Uniform Guidance (2 CFR 200.415(a))
requires the ROE to provide a specific
certification to funding agencies on
all annual and final fiscal reports or
vouchers requesting payment and,
conversely, requires the ROE to obtain
such certification from its
subrecipients. The Uniform Guidance (2
CFR 200.332(b)) also requires the ROE
to evaluate each subrecipient’s risk
of noncompliance with federal
statutes, regulations, and terms and
conditions of the subaward for
purposes of determining the
appropriate subrecipient monitoring.

Regional Office management indicated
the I-KAN ROE was not aware the
subrecipient monitoring procedures
applied to the non-governmental
subrecipients of the Teen REACH
program. (Finding 19-002, pages 15 –
16)

The auditors recommended the ROE
develop policies and procedures to
ensure all annual and final fiscal
reports or vouchers requesting payment
received from subrecipients of federal
awards include the certification
required by 2 CFR 200.415(a). It was
also recommended the ROE review the
required data elements noted in the
Uniform Guidance (2 CFR 200.332(a))
and ensure that all information is
provided to the subrecipients. In
addition, the ROE should formalize, in
writing, its subrecipient risk
assessment procedures as required and
described in 2 CFR 200.332(b).

ROE Response: Procedures have been
developed and implemented to ensure
all annual and final fiscal reports or
vouchers requesting payment received
from subrecipients of federal and
state awards include the certification
required by 2 CFR 200.415(a). The
procedures include elements to ensure
all required information is provided
to subrecipients. Additionally, the
procedures provide for written
documentation of the required risk
assessment of subrecipients.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #32’s financial
statements as of June 30, 2019 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of West & Company, LLC.

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:JRB