REPORT DIGEST REGIONAL OFFICE OF EDUCATION #48: PEORIA COUNTY FINANCIAL AUDIT (IN ACCORDANCE WITH THE UNIFORM GUIDANCE) FOR THE YEAR ENDED: JUNE 30, 2016 Release Date: April 12, 2017 FINDINGS THIS AUDIT: 2 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 1 -- 0 -- 1 Category 2: 1 -- 0 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 2 -- 0 -- 2 FINDINGS LAST AUDIT: 0 Category 1: Findings that are material weaknesses in internal control and/or a qualification on compliance with State laws and regulations (material noncompliance). Category 2: Findings that are significant deficiencies in internal control and noncompliance with State laws and regulations. Category 3: Findings that have no internal control issues but are in noncompliance with State laws and regulations. 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, 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 www.auditor.illinois.gov SYNOPSIS • (16-1) The Regional Office of Education #48 did not use time and effort documentation to distribute employees’ salary and benefit costs. • (16-2) The Regional Office of Education #48 did not have any written procedures concerning the determination of allowability of costs. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS SALARIES AND BENEFITS NOT SUPPORTED BY PROPER DOCUMENTATION Employees of the Regional Office of Education No. 48 are required to document their time and effort working on the Mathematics and Science Partnership programs when only a portion of their work is spent on these programs. Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges for salaries and benefits to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. It also requires that records are used to support the distribution of employees’ salary and benefits among specific activities if the employee only works part of the time on a federal award program. It further states that budget estimates alone do not qualify as support for salary and benefit charges to a federal award. The Regional Office of Education No. 48 did not use time and effort documentation to distribute the salary and benefit costs for two administrative employees who partly worked on Mathematics and Science Partnership activities and partly on other Regional Office activities. One of the two employees completed timesheets, but the timesheets only documented the time spent on Mathematics and Science Partnership activities, and these timesheets were not used in the distribution of salary and benefit costs charged to these programs. The salary and benefits charged to the Mathematics and Science Partnership programs for both of these employees were based on an estimate of time worked on program activities. According to the Regional Office of Education No. 48 officials, they were unaware of the time and effort log requirements for administrative personnel. The auditors recommended the Regional Office should use time and effort documentation to distribute salary and benefit costs for employees who partly work on Mathematics and Science Partnership activities as well as other activities in accordance with the Uniform Guidance. The Regional Office of Education No. 48 has begun using time and effort sheets to document time worked on all federal grants, including the Mathematics and Science Partnership grant. REQUIRED WRITTEN PROCEDURES NOT IMPLEMENTED The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), contained in 2 CFR Part 200, became effective for all federal award programs administered by the Regional Office of Education No. 48 that were issued on or after December 26, 2014. Specifically, the Uniform Guidance (2 CFR 200.302(b)(7)) requires the Regional Office to have written procedures 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. The Regional Office of Education No. 48 did not have any written procedures concerning the determination of allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. In lieu of written procedures, the Regional Office utilized informal procedures in which each purchase made or cost allocated to the Mathematics and Science Partnerships was reviewed for allowability by the Program Coordinator. The allowability determinations were based on the amounts included in the budgets for the Mathematics and Science Partnerships approved by the Illinois State Board of Education. The Regional Office of Education No. 48 was unable to dedicate the time needed to fully implement the Uniform Guidance due to competing priorities. The auditors recommended the Regional Office of Education No. 48 implement written procedures 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. The Regional Office of Education No. 48 responded it is developing a written procedure to determine the allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. AUDITORS’ OPINION Our auditors state the Regional Office of Education No. 48’s financial statements as of June 30, 2016 are fairly stated in all material respects. This financial report was conducted by the firm of Doehring, Winders & Co. LLP. AMEEN DADA Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:KJM