REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #39

MACON AND PIATT COUNTIES

FINANCIAL AUDIT

(In Accordance with the
Single Audit Act and OMB Circular A-133)

For the Year Ended:

June 30, 2006

Summary of Findings:

Total this audit                          2

Total last audit                          1

Repeated from last audit           1

Release Date:

May 24, 2007

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

http://www.auditor.illinois.gov

SYNOPSIS

• The Regional Office of Education #39 did not comply with certain statutory administrative requirements.

• During the year, the amount on deposit at a financial institution exceeded the amount pledged as collateral by $258,091.

{Expenditures and Revenues are summarized on the reverse page.}

FY 2006

FY 2005

TOTAL REVENUES

$8,785,653

$9,068,103

Local Sources

$1,321,243

$1,099,479

% of Total Revenues

15.04%

12.12%

State Sources

$5,814,844

$5,993,697

% of Total Revenues

66.19%

66.10%

Federal Sources

$1,649,566

$1,974,927

% of Total Revenues

18.78%

21.78%

TOTAL EXPENDITURES

$8,659,355

$9,028,453

Salaries and Benefits

$6,702,628

$7,486,451

% of Total Expenditures

77.40%

82.92%

Purchased Services

$1,574,652

$1,238,658

% of Total Expenditures

18.18%

13.72%

All Other Expenditures

$382,075

$303,344

% of Total Expenditures

4.41%

3.36%

TOTAL NET ASSETS

$1,484,445

$1,358,147

INVESTMENT IN CAPITAL ASSETS

$127,027

$103,651

              Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Richard Shelby

Currently:  Honorable Richard Shelby

The Regional Office of Education #39 did not comply with certain statutory administrative requirements.

During the year, the amount on deposit at a financial institution exceeded the amount pledged as collateral by $258,091.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS

The Illinois School Code (105 ILCS 5/3-14.11) requires the Regional Superintendent to examine at least once each year all books, accounts, and vouchers of every school treasurer in his educational service region, and if he finds any irregularities in them, to report them at once, as directed by the School Code. 

The Regional Office of Education #39 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in the educational service region.  The Regional Office officials noted they believe this mandate is outdated and that they are satisfying the intent of the statute by other reviews they undertake.   This mandate has existed in its current form since at least 1953.

The Illinois School Code (105 ILCS 5/3-14.5) requires the Regional Superintendent to visit each public school in the county at least once a year, noting the methods of instruction, the branches taught, the textbooks used, and the discipline, government and general condition of the schools.  This mandate has existed in its current form since at least 1953.

The Regional Superintendent performs compliance inspections for each public school in his region on a rotational basis every four years.  While the Illinois Public School Accreditation Process Compliance Component document completed at these inspections includes many of the items delineated in 105 ILCS 5/3-14.5, it does not include a review of the methods of instruction and the textbooks used in the district.          

Finally, the Illinois School Code (105 ILCS 5/3-5) requires the Regional Superintendent to present under oath or affirmation to the county board at its meeting in September and as nearly quarterly thereafter as it may have regular or special meetings, a report of all his acts as county superintendent, including a list of all the schools visited with the dates of visitation.  This mandate has existed in its current form since at least 1953.

The Regional Office did not present at the September county board meeting, and as nearly quarterly thereafter, a report of all his acts including a list of all the schools visited and dates of visitation.  (Finding 06-01, pages 13-15)

The Regional Office accepted the recommendation to comply with the statutory requirements.  The Regional Office responded that with regards to compliance with 105 ILCS 5/3-14.11 and 105 ILCS 5/3-14.5, the Illinois Association of Regional Superintendents of Schools and the Illinois State Board of Education have agreed to seek legislation to remove duplicative and/or obsolete sections of the Illinois School Code.  Both parties believe that 105 ILCS 5/3-7 of the Illinois School Code and 23 Ill. Adm. Code 1.20, respectively, contain more current, thorough, and comprehensive requirements concerning a public school district’s financial transactions and visitation of public schools by the Regional Superintendent.  As a result, the two parties working together will seek legislation to repeal these two sections of the Illinois School Code.  

In regards to 105 ILCS 5/3-5, the Regional Superintendent will present a report of official acts in September and ask to be placed on both Macon and Piatt County Boards’ agenda for quarterly meetings thereafter to present future reports.

CASH COLLATERAL

The Public Funds Deposit Act (30 ILCS 225/1) gives the authorization for deposits in excess of the federally insured limit to be covered by pledged collateral held by the financial institutions’ trust departments in the Regional Office of Education #39’s name.

During the year, the amount on deposit at a financial institution exceeded the amount pledged as collateral by $258,091. (Finding 06-02, page 16)

The Regional Office of Education #39 accepted the recommendation to increase the amount of collateral pledged by the financial institution to cover all deposits.  In addition, the Regional Office will work with its financial institution to monitor the amount of pledged collateral held to ensure that sufficient collateral is being maintained.

AUDITORS’ OPINION

Our auditors state the Regional Office of Education #39’s financial statements as of June 30, 2006 are fairly presented in all material respects.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JB

SPECIAL ASSISTANT AUDITORS

        Our special assistant auditors were West & Company, LLC.