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 did not examine at
least once each year all books, accounts, and vouchers of every school
treasurer in the educational service region.
Regional Office officials noted they believe the mandate is outdated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. (Finding 05-01, pages 13-14)
The Regional Office accepted the
recommendation, noting it will seek a legislative solution to this and other
obsolete passages.
INADEQUATE
REVIEW OF JOURNAL ENTRIES
Program directors prepare “Debit and/or
Credit Authorization” forms directing the bookkeeping staff to make general
journal entries allocating expenditures between various programs. While the Regional Superintendent spot
checks some general journal entries, not all are reviewed and approved. Adequate controls over compliance with
laws, regulations, contracts, and grant agreements require supervisory review
of expenditures charged to grant programs. (Finding 05-02, page 15)
The Regional Office accepted the
recommendation, noting that upon notification of the finding, it established
internal controls and provided training to all appropriate departments.
INADEQUATE
INTERNAL CONTROLS OVER DISBURSEMENT PROCESS
The
Regional Superintendent is responsible for establishing and maintaining an
internal control system. During
testing of 60 disbursements, the following was noted:
·
Authorization forms were not signed for
mileage in 4 instances;
·
Supporting documentation did not show the
mileage calculation for payments to students attending classes in 2
instances;
·
Contract information was missing for 1
employee;
·
The date was missing on a handwritten check in
1 instance; and
·
Required payroll forms were missing for 1
employee. (Finding 05-03, pages 16-17)
The Regional Office accepted the
recommendation, noting it has taken action to address the exceptions noted,
including fully completing authorization forms, reviewing employee files to
make sure all payroll information is properly documented, and fully
completing all handwritten checks.
EXPENDITURE REPORT DID NOT AGREE TO THE
GENERAL LEDGER
A comparison of expenditure reports to the Regional Office
of Education #40’s general ledger revealed an instance where the totals on
the final 2004 expenditure report did not agree with the Regional Office of
Education #40’s books by $121, resulting in an inaccurate expenditure report.
Expenditure reports submitted to the
Illinois State Board of Education should agree with the expenditures reported
on the Regional Office of Education #40’s general ledger. (Finding 05-04,
pages 18-19) This finding was first reported in 2003.
The Regional Office of Education #40
accepted the recommendation to have personnel responsible for the reports
compare the total expenditures to the general ledger accounts. The Regional Office noted that it has
contacted the State Board of Education and has resubmitted the required
expenditure reports. (For previous
Regional Office response, see Digest Footnote #1.)
EXPENDITURE
REQUIREMENTS FOR A GRANT WERE NOT FOLLOWED
A review of the 2005 expenditure report
for Adult Education and Family Literacy grant identified that the Regional Office of Education #40
exceeded the portion of expenditures allowed for program support. The requirement for the Adult Education and
Family Literacy grant was that program support expenditures could not exceed
28% of adjusted total expenditures or $15,467.
The Regional Office of
Education #40 reported program support expenditures of $15,996, which was
over the allowable amount by $529.
(Finding 05-05, pages 20-21)
The Regional Office
of Education #40 accepted the recommendation, noting it will require the
director to submit a percentage breakdown of the budget to the bookkeeping
department, which will allow another person to do a check on the budget.
AUDITORS’ OPINION
Our
auditors state the Regional Office of Education #40’s financial statements as
of June 30, 2005 are fairly presented in all material respects.
____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JRB
SPECIAL
ASSISTANT AUDITORS
Our
special assistant auditors were West & Company, LLC.
DIGEST
FOOTNOTE
#1: AN EXPENDITURE REPORT FOR A SPECIAL
REVENUE FUND DOES NOT AGREE TO THE GENERAL LEDGER--Previous Regional Office
Response
In its prior response in 2004, the Regional Office accepted the finding stating that
the director was trying to get the expenditure reports to agree with the
budget. The Regional Office stated the
expenditure report was corrected according to the general ledger.
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