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, 2022

Release Date:  Aug. 21, 2024

FINDINGS THIS AUDIT: 2

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

FINDINGS LAST AUDIT: 3

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

• (22-1) The Regional Office of Education
#47 did not provide completed financial
statements in an auditable form by the
August 31 deadline.

• (22-2) 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, 2022 deadline. Completed
financial statements were received on
September 29, 2023. The June 30, 2018; June
30, 2019; and June 30, 2020 audits were
released on December 15, 2021; October 19,
2022; and August 30, 2023 respectively.
Additionally, the June 30, 2021 audit was
not released until 2024.

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 22-001, pages 15a –
15b) 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. ROE 47 will ensure the financial
statements will be prepared and available by
August 31st of that year.

SUBRECIPIENT MONITORING

The Regional Office of Education #47 (ROE)
did not have adequate subrecipient
monitoring documentation. Audit procedures
revealed that the ROE was not properly
monitoring subrecipients in accordance with
the Uniform Guidance standards as follows:

McKinney Education for Homeless Children –
for three (3) of three (3) subrecipients
tested, ROE #47:

• Did not evaluate the risk of noncompliance
with Federal statutes, regulations, and the
terms and conditions of the subaward.
• Did not determine whether the subrecipient
met the 2 CFR 200 Subpart F Audit
requirements criteria for a single audit.

COVID-19 ARP – McKinney Education for
Homeless Children – for two (2) of two (2)
subrecipients tested, ROE #47:

• Did not identify the subaward and
applicable requirements in the agreements.
• Did not evaluate the risk of noncompliance
with Federal statutes, regulations, and the
terms and conditions of the subaward.
• Did not conduct subrecipient monitoring
procedures.
• Did not determine whether the subrecipient
met the 2 CFR 200 Subpart F Audit
requirements criteria for a single audit.

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 it had
not been asked to distribute Federal ARP
funds before. All the funds were distributed
to public school districts that are subject
to state audits every year themselves, and
we mistakenly did not follow up to get the
results of their audits.   (Finding 22-002
pages 16a – 16b) 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. Identifying the subaward and applicable
requirements in the agreements;
b. Evaluating the risk of noncompliance with
Federal statutes, regulations, and the terms
and conditions of the subaward;
c. Conducting subrecipient monitoring
procedures; and
d. Determining whether the subrecipient met
the requirement criteria of 2 CFR 200
Subpart F Audit requirements for a single
audit.

ROE Response: Effective April 2024, the
Regional Office will formally identify the
subaward and the applicable requirements in
our agreements. We will conduct subrecipient
monitoring procedures. We will determine if
the subrecipient met the requirement
criteria of 2 CFR 200 Subpart F Audit
requirements for single audit.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #47’s financial statements as of
June 30, 2022 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