REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #34: LAKE COUNTY

FINANCIAL AUDIT (In accordance with the Single
Audit Act and OMB Circular A-133)
For the Year Ended: June 30, 2013


Release Date:   May 15, 2014

Summary of Findings:
Total this audit: 1
Total last audit:  5
Repeated from last audit: 1

State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL

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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

The Regional Office of Education #34 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 #34 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 #34 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 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
and correct financial statement misstatements
and disclosure omissions in a timely manner.

During review of the Regional Office of
Education #34’s financial information prepared
by the Regional Office, auditors noted that the
Regional Office did not have adequate controls
to ensure financial statement balances were
accurate.  While the Regional Office did
maintain records to indicate the balances of
financial statement accounts, numerous material
audit adjustments were proposed in order to
ensure those balances were accurate. (Finding
2013-001, pages 13-14) 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 #34 should
implement comprehensive preparation procedures
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 of Education #34’s activities and
operations.

The Regional Office of Education #34 responded
that it agrees with the finding and will
continue to implement comprehensive preparation
and review procedures to insure that financial
statements including disclosures are complete
and accurate.  The Regional Office stated that
included in the corrective activities are
continued consulting services and training to
Lake ROE finance staff regarding preparation of
financial statements (including review for
completeness and accuracy).  In addition, the
Lake ROE has conducted additional training
regarding successful use of the Lake ROE’s
financial management software and has contracted
with a part-time business consultant who
continues to review Lake ROE business procedures
and controls.  Finally, in an effort to
streamline preparation of comprehensive
financial statements, the Lake ROE will
consolidate multiple installations of the
financial management software during April 2014.
This merged data system will be tested and
validated by the end of Fiscal Year 2014. (For
previous Regional Office response, see Digest
Footnote #1.)

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #34’s financial statements as of June
30, 2013 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 2012, the Regional
Office of Education #34 responded that it agrees
with the finding and will continue to implement
comprehensive preparation and review procedures
to insure that financial statements including
disclosures are complete and accurate.  The
Regional Office stated that included in the
corrective activities are continued consulting
services and training to Lake ROE finance staff
regarding preparation of financial statements
(including review for completeness and
accuracy).  In addition, the Lake ROE has
conducted additional training regarding
successful use of the Lake ROE’s financial
management software and has contracted with a
part-time business consultant who is reviewing
Lake ROE business procedures and controls.
Finally, in an effort to streamline preparation
of comprehensive financial statements, the Lake
ROE has begun consolidating multiple
installations of the financial management
software into one cohesive system by the end of
Fiscal Year 2013.