REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #46

BROWN/CASS/MORGAN/ SCOTT COUNTIES

FINANCIAL AUDIT

(In Accordance with the

Single Audit Act and OMB Circular A-133)

For the Year Ended:

June 30, 2005

Summary of Findings:

Total this audit                          3

Total last audit                          2

Repeated from last audit           1

Release Date:

July 12, 2006 

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.state.il.us/auditor

SYNOPSIS

• The Regional Office of Education #46 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region.

• The Regional Office of Education #46 included $156 that was related to the 2004 Truants Alternative and Optional Education grant on the 2005 grant expenditure report.

• The Regional Office of Education #46 did not have sufficient collateral in place to insure their cash balances against possible loss. 

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

FY 2005

FY 2004

TOTAL REVENUES

$2,014,390

$3,145,857

Local Sources

$235,968

$221,221

% of Total Revenues

11.71%

7.03%

State Sources

$1,026,894

$839,301

% of Total Revenues

50.98%

26.68%

Federal Sources

$751,528

$2,085,335

% of Total Revenues

37.31%

66.29%

TOTAL EXPENDITURES

$1,922,635

$3,123,842

Salaries and Benefits

$1,543,483

$936,253

% of Total Expenditures

80.28%

29.97%

Purchased Services

$249,375

$178,311

% of Total Expenditures

12.97%

5.71%

All Other Expenditures

$129,777

$2,009,278

% of Total Expenditures

6.75%

64.32%

TOTAL NET ASSETS

$979,327

$892,763

INVESTMENT IN CAPITAL ASSETS

$11,480

$16,058

Percentages may not add due to rounding.

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Stephen Breese

Currently:  Honorable Stephen Breese

The Regional Office of Education #46 did not examine at least once each year all books, accounts, and vouchers of every school treasurer in its educational service region.

The Regional Office of Education #46 included $156 that was related to the 2004 Truants Alternative and Optional Education grant on the 2005 grant expenditure report. 

The Regional Office of Education #46 did not have sufficient collateral in place to insure their cash balances against possible loss.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

COMPLIANCE WITH STATUTORY REQUIREMENTS

          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 05-1, pages 12-13)

          The Regional Office accepted the recommendation, noting they will seek a legislative solution to this and other obsolete passages.  

INACCURATE EXPENDITURE REPORT

       The Regional Office of Education #46 included $156 that was related to the 2004 Truants Alternative and Optional Education grant on the 2005 grant expenditure report.  Consequently, the expenditure report submitted did not accurately reflect the activity of the period.  (Finding 05-2, page 14)  This finding was first reported in 2003.

      The Regional Office of Education #46 accepted the recommendation, stating it will amend the report to accurately reflect the grant activity at June 30, 2005. (For previous Regional Office response, see Digest Footnote #1.)

UNDERCOLLATERALIZATION OF BANK ACCOUNTS

       The Regional Office of Education #46 did not have sufficient collateral in place to insure their cash balances against possible loss.  At year end, $261,081 of the Regional Office of Education #46’s bank balance of $1,115,485 was exposed to custodial credit risk.  (Finding 05-3, page 15)

      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 #46’s name.  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.

      The Regional Office of Education #46 accepted the recommendation, stating it will monitor its bank balances on a monthly basis to make sure there is adequate collateralization to protect its cash and investments from possible loss.

AUDITORS’ OPINION

      Our auditors state the Regional Office of Education #46’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 Clifton Gunderson LLP.

DIGEST FOOTNOTES

#1: INACCURATE EXPENDITURE REPORT--Previous Regional Office Response

In its prior response in 2004, the Regional Office accepted the finding and stated they will amend the expenditure report to accurately reflect the grant activity.

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