REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #35:
LASALLE, MARSHALL AND PUTNAM COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2020

Release Date:  February 24, 2021

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 0

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

• (20-1) The Regional Office of Education
#35 failed to fully insure and
collateralize cash balances.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FAILURE TO FULLY INSURE AND COLLATERALIZE
CASH BALNCES

As of June 30, 2020, the Regional Office
of Education #35 (ROE) had four cash and
investment accounts with bank balances
totaling $1,351,444 at one financial
institution. The Federal Deposit
Insurance Corporation (FDIC) covers up to
a maximum of $250,000. The ROE had
pledged securities for an additional
$1,024,126. The ROE did not have
depository insurance or collateral for
the remaining $77,318.

The Public Funds Deposit Act (30 ILCS
225/1) gives the ROE the authorization to
request financial institutions to pledge
collateral for deposits in excess of the
federally insured limit. In addition,
prudent business practice requires that
all cash and investments held by
financial institutions for the ROE be
adequately covered by depository
insurance or collateral.

Regional Office officials indicated the
financial institution determines the
amount of pledged securities that will be
needed at month end for each entity
during the third week of that month. In
addition, the ROE failed to monitor the
sufficiency of the pledged securities.
(Finding 20-001, pages 11 – 12)

The auditors recommended the ROE should
monitor the bank balances on all accounts
and work with the financial institution
to either provide adequate collateral or
move to an insured cash sweep account to
ensure adequate coverage.

ROE Response: The ROE plans to keep in
contact with the financial institution
regarding the amount of collateralization
and pledged securities. In addition to
the collateralization system and
procedures set in place in 2018, the ROE
has implemented a sweep account. The bank
will perform a daily analysis and sweep
balances over $250,000 into the sweep
account. This will ensure that
collateralization will always be at the
appropriate levels.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #35’s financial statements as
of June 30, 2020 are fairly presented in
all material respects.

This financial audit was conducted by the
firm of MCK CPAs & Advisors.

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:BAO