REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #47: LEE, OGLE
AND WHITESIDE COUNTIES

FINANCIAL AUDIT (IN ACCORDANCE WITH THE
UNIFORM GUIDANCE)
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  Aug. 21, 2024

FINDINGS THIS AUDIT: 3

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

FINDINGS LAST AUDIT: 4

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

• (21-1) The Regional Office of Education
#47 did not provide completed financial
statements in an auditable form by the
August 31 deadline.

• (21-2) The Regional Office of Education
#47 lacked written policies for federal
grants.

• (21-3) The Regional Office of Education
#47 did not have adequate subrecipient
monitoring documentation.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

DELAY OF AUDIT

The Regional Office of Education #47 (ROE)
did not provide completed financial
statements in an auditable form by the
August 31, 2021 deadline. Completed
financial statements were received on
December 8, 2021. The June 30, 2018 and June
30, 2019 audits were released on December
15, 2021 and October 19, 2022, respectively.
Additionally, the June 30, 2020 audit was
not released until August 30, 2023.

The ROE is subject to 105 ILCS 5/2-3.17a
which requires the Auditor General’s office
to cause an audit to be made, as of June
30th of each year, of the financial
statements of all accounts, funds, and other
moneys in the care, custody, or control of
the regional superintendent of schools of
each educational service region in the State
and of each educational service center
established in the School Code. The audit is
to be conducted in accordance with Generally
Accepted Government Auditing Standards. The
Regional Office of Education or Educational
Service Center may utilize a cash basis,
modified cash basis, or generally accepted
accounting principles (GAAP) basis of
accounting to prepare the financial
statements for audit.

In accordance with 105 ILCS 5/2-3.17a, the
Auditor General has promulgated
administrative rules and regulations to
govern this process. Those rules, 74 Ill.
Adm. Code 420.320 (c) (2), state that for
audit purposes, each regional office of
education and educational service center
shall make available to the Auditor General
or his designee all books and records deemed
necessary to make and complete the required
audits.
The records shall be in auditable form by
August 15 of the succeeding fiscal year.
Financial reports are to be available no
later than August 31 in order for the annual
audit to be completed by an independent
auditor selected by the Auditor General.

In addition, prudent business practices and
transparency require timely preparation and
completion of financial statements.

Regional Office management indicated they
did not provide their books to their outside
accountant in time to fully adjust and
prepare their financial statements in an
auditable form. (Finding 21-001, pages 14a –
14b) This finding was first reported in
2018.

The auditors recommended the ROE should
implement procedures to ensure compliance
with 105 ILCS 5/2-3.17a and 74 Ill. Adm.
Code 420.320 (c) (2). Regional Office
management should establish policies and
procedures which set forth closing
schedules, deadline, and accountability for
the timely generation of financial
statements. These financial statements need
to be presented to the Auditor General’s
independent auditors for audit by the August
31 deadline.

ROE Response: Management agrees with the
finding.

LACK OF WRITTEN POLICIES FOR FEDERAL GRANTS

The Regional Office of Education #47 (ROE)
as of April 2021, had developed, but not
implemented written procedures concerning
cash management, the determination of
allowability of costs in accordance with
Subpart E – Cost Principles of the Title 2
of the U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance) and the
terms and conditions of the federal award.
For the period of July 2020 through March
2021, the ROE utilized informal procedures
in which each purchase made or cost
allocated to the Individuals with
Disabilities Education Act (IDEA) –
Improvement Grant – Part D was reviewed for
allowability by an individual with knowledge
of the budget, allowable costs and
activities, and the cash management
requirements. The allowability
determinations were based on the amounts
included in the budgets for the IDEA –
Improvement Grant – Part D approved by, and
the grant periods set by, the Illinois State
Board of Education (ISBE).

The Uniform Guidance, contained in 2 CFR
Part 200, became effective for all federal
award programs administered by the ROE that
were issued on or after December 26, 2014.
Specifically, the Uniform Guidance (2 CFR
200.302(b)(7)) requires the ROE to have
written procedures related to cash
management and for determining the
allowability of costs in accordance with
Subpart E – Cost Principles of the Uniform
Guidance and the terms and conditions of the
federal award.

Regional Office management indicated they
developed the written procedures late into
the fiscal year, and were unable to fully
implement the Uniform Guidance during the
full fiscal year. (Finding 21-002, pages 15a
– 15b) This finding was first reported in
2017.

The auditors recommended the ROE implement
written procedures to comply with the
requirements related to cash management for
determining the allowability of costs in
accordance with Subpart E – Cost Principles
of the Uniform Guidance and the terms and
conditions of the federal award.

ROE Response: Effective April 2021, the
Regional Office has developed written
policies and procedures related to the
Uniform Guidance.

SUBRECIPIENT MONITORING

The Regional Office of Education #47 (ROE)
did not have effective internal controls
over subrecipient monitoring. Furthermore,
the ROE was not properly monitoring
subrecipients in accordance with Title 2 of
the U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance) standards.
During audit testing procedures it was
determined that the ROE:

a. Did not evaluate the risk of
noncompliance with Federal statutes,
regulations, and the terms and conditions of
the subaward. Number of Subrecipients: 2 of
2

b. Did not conduct subrecipient monitoring
procedures. Number of Subrecipients: 2 of 2

c. Did not determine whether the
subrecipient met the 2 CFR 200 Subpart F
Audit requirements criteria for a single
audit. Number of Subrecipients: 2 of 2

The Uniform Guidance requires the Regional
Office to ensure any subrecipient monitoring
using federal funds be consistent with the
standards set forth in the Uniform Guidance
at 2 CFR 200.332. Additionally, the Uniform
Guidance section 200.303 Internal Controls
states the following : “The non-Federal
entity must:

a. Establish and maintain effective internal
control over the Federal award that provides
reasonable assurance that the non-Federal
entity is managing the Federal award in
compliance with Federal statutes,
regulations, and the terms and conditions of
the Federal award.”

Regional Office management indicated the ROE
experienced staff turnover and did not
formally document policies and procedures
that provide controls and structures to
ensure all of its subrecipient monitoring
accountabilities are conducted and complied
with. (Finding 21-003, pages 15c – 15d) This
finding was first reported in 2017.

The auditors recommended the ROE establish
and maintain effective internal control over
federal awards to ensure subrecipients are
properly monitored as required by 2 CFR
200.332. This includes:

a. Evaluating the risk of noncompliance with
Federal statutes, regulations, and the terms
and conditions of the subaward;
b. Conducting subrecipient monitoring
procedures; and
c. Determining whether the subrecipient met
the requirement criteria of 2 CFR 200
Subpart F Audit requirements for a single
audit.

ROE Response: Management agrees with this
finding.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #47’s financial statements as of
June 30, 2021 are fairly presented in all
material respects.

This financial audit was conducted by the
firm of Prado & Renteria Certified Public
Accountants.

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:JMM