REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #46

 

BROWN/CASS/MORGAN/ SCOTT COUNTIES

 

FINANCIAL AND COMPLIANCE AUDIT

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

For the Year Ended:

June 30, 2003

 

Summary of Findings:

 

Total this audit                      7

Total last audit                      1

Repeated from last audit       1

 

Release Date:

February 24, 2004

 

 

 

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 TDD (217) 524-4646

 

This Report Digest is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

SYNOPSIS

 
  • Salary expenses were not always posted to a separate salary expense account designated for a particular grant or program. The Regional Office’s trial balance did not have a separate salary expense account for each grant or program which had salary expenses.
  • The Regional Superintendent of Schools for Regional Office of Education #46 gave the satellite office manager the authority to prepare and sign checks with little or no other approval. The office manager was also preparing monthly bank reconciliations.
  • The Regional Office of Education #46’s general ledger did not include a bank account held by the Regional Office.
  • The Regional Office was not properly monitoring a subrecipient’s spending of funds.

 

 

 

 

 

 

 

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

 

REGIONAL OFFICE OF EDUCATION #46

BROWN/CASS/MORGAN/SCOTT COUNTIES

 

FINANCIAL AND COMPLIANCE AUDIT

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

For The Year Ended June 30, 2003

 

FY 2003

FY 2002

TOTAL REVENUES

$1,349,455

$1,654,897

Local sources

$255,011

$286,491

% of Total Revenues

18.90%

17.31%

State Sources

$1,058,443

$1,175,182

% of Total Revenues

78.43%

71.01%

Federal Sources

$36,001

$193,224

% of Total Revenues

2.67%

11.68%
 

TOTAL EXPENDITURES

$1,319,194

$1,635,082

Salaries and Benefits

$998,274

$1,148,796

% of Total Expenditures

75.67%

70.26%

Purchased Services

$184,289

$213,826

% of Total Expenditures

13.97%

13.08%

All Other Expenditures

$136,631

$272,460

% of Total Expenditures

10.36%

16.66%
     

COST OF PROPERTY AND EQUIPMENT

$190,244

$184,326
 

* Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT

During Audit Period: Honorable Donald Kording (retired April 30, 2003)

Honorable Robert Nicolet (May 1 to May 30, 2003)

Honorable Stephen Breese

Currently: Honorable Stephen Breese

 

 

 

 

 

 

 

Salary expenses were posted to several general salary expense accounts but not always to a separate salary expense account designated for a particular grant or program.

 

 

 

 

 

 

 

 

The Regional Superintendent of Schools for Regional Office of Education #46 gave the satellite office manager the authority to prepare and sign checks with little or no other approval.

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

INADEQUATE POSTING OF SALARIES TO THE GENERAL LEDGER

Salary expenses were posted to several general salary expense accounts but not always to a separate salary expense account designated for a particular grant or program. The Regional Office’s trial balance did not have a separate salary expense account for each grant or program which had salary expenses.

Salaries for each grant or program should be posted to a separate salary expense account for each grant or program. (Finding 03-1, page 13) This finding is repeated from our 2002 audit.

The Regional Office of Education #46 accepted the auditor’s recommendation and has implemented a new computerized general ledger system. (For previous Regional Office response, see Digest Footnote #1.)

 

IMPROPER SEGREGATION OF DUTIES IN THE ACCOUNTING FUNCTION

The Regional Superintendent of Schools for Regional Office of Education #46 gave the satellite office manager the authority to prepare and sign checks with little or no other approval. The office manager was also preparing monthly bank reconciliations.

The Regional Superintendent of Schools is responsible for establishing and maintaining an internal control system to prevent errors and/or irregularities. Inadequate segregation of duties could limit the effectiveness of the internal control system. (Finding 03-3, pages 15-16)

The Regional Office of Education #46 accepted the auditor’s recommendation and will implement a policy where the Regional Superintendent will sign and approve all checks and review all bank statements in detail.

 

 

 

 

 

The Regional Office of Education #46’s general ledger did not include a bank account held by the Regional Office.

 

 

 

 

 

 

 

 

The Regional Office was not properly monitoring a subrecipient’s spending of federal pass-through funds.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANK ACCOUNT OMITTED FROM FINANCIAL STATEMENTS

The Regional Office of Education #46’s general ledger did not include a bank account held by the Regional Office. The account contains interest earned ($20,971) on funds received from the Illinois State Board of Education that the Regional Office then distributed to various entities.

All assets should be reported in the financial statements of the Regional Office of Education #46. (Finding 03-5, page 18)

The Regional Office of Education #46 accepted the auditor’s recommendation and has included this bank account on its general ledger system.

 

LACK OF PROPER MONITORING OF SUBRECIPIENT’S SPENDING

The Regional Office of Education #46 distributes federal pass-through funds for the 21st Century Community Learning Centers grant to the Jacksonville Sherwood Eddy YMCA. In Fiscal Year 2003, the Regional Office distributed almost $1.6 million of funding to the YMCA. The Regional Office was not properly monitoring the subrecipient’s spending of these funds.

The Regional Office of Education #46 is responsible for monitoring the use of federal pass-through funds by subrecipients. (Finding 03-7, page 20)

The Regional Office of Education #46 accepted the auditor’s recommendation and plans on requiring the subrecipient to submit detailed reports disclosing the spending of the grant funds.

 

OTHER FINDINGS

The three remaining findings were less significant and are reportedly being given attention by the Regional Office of Education #46. We will review progress toward the implementation of our recommendations during the next audit.

 

AUDITORS’ OPINION

Our auditors state the Regional Office of Education #46’s financial statements as of June 30, 2003 are fairly presented in all material respects.

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JRB

 

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Estes, Bridgewater & Ogden.

 

DIGEST FOOTNOTES

#1: INADEQUATE POSTING OF SALARIES TO THE GENERAL LEDGER--Previous Regional Office Response

In its prior response in 2002, the Regional Office accepted the finding and agreed to implement a new computerized general ledger system in the next several months.

Complete Regional Office responses to prior findings are available upon request from the Auditor General’s Office.