REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #51

 

SANGAMON COUNTY

 

FINANCIAL AUDIT

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

 

For the Year Ended:

June 30, 2004

 

Summary of Findings:

Total this audit                            3

Total last audit                            0

Repeated from last audit             0

 

Release Date:

March 24, 2005 

 

 

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 is also available on

the worldwide web at

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

 

 

 

 

 

 

 

SYNOPSIS

 

·        The Regional Office of Education #51 did not comply with certain statutory administrative requirements.

 

·        The Regional Office of Education #51 does not maintain a cost allocation plan or an approved indirect cost rate to allocate indirect costs in accordance with OMB Circular A-87.

 

·        The Regional Office of Education #51’s accounting system allows for one-sided entries and does not properly post certain entries, which resulted in 11 fund trial balances being out-of-balance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 


REGIONAL OFFICE OF EDUCATION #51

SANGAMON COUNTY

 

FINANCIAL AUDIT

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

For The Year Ended June 30, 2004

 

 

FY 2004

FY 2003

TOTAL REVENUES

$2,254,448

$2,447,378

Local Sources

$413,597

$526,799

% of Total Revenues

18.35%

21.52%

State Sources

$806,204

$1,434,378

% of Total Revenues

35.76%

58.61%

Federal Sources

$1,034,647

$486,201

% of Total Revenues

45.89%

19.87%

 

TOTAL EXPENDITURES

$2,123,041

$2,285,332

Salaries and Benefits

$1,353,158

$1,637,185

% of Total Expenditures

63.74%

71.64%

Purchased Services

$573,871

$578,369

% of Total Expenditures

27.03%

25.31%

All Other Expenditures

$196,012

$69,778

% of Total Expenditures

9.23%

3.05%

 

 

 

TOTAL NET ASSETS1

$1,242,139

$1,110,732

 

 

 

INVESTMENT IN CAPITAL ASSETS1

 

$30,465

 

$35,876

 

1         In fiscal year 2004, Regional Offices of Education implemented Government Accounting Standards Board (GASB) Statement No. 34 which established a new financial reporting model for state and local governments.  Government-wide financial statements are prepared using full accrual accounting that reports Total Net Assets.    The fiscal year 2003 ending general fixed assets have been restated to reflect the changes required as part of the implementation of GASB Statement No. 34.

              Percentages may not add due to rounding.

 

REGIONAL SUPERINTENDENT 

During Audit Period:  Honorable Helen Tolan

Currently:  Honorable Helen Tolan


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #51 did not comply with certain statutory administrative requirements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #51 does not maintain a cost allocation plan or an approved indirect cost rate to allocate indirect costs in accordance with OMB Circular A-87.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Regional Office of Education #51’s accounting system allows for one-sided entries and does not properly post certain entries, which resulted in 11 fund trial balances being out-of-balance.

 

 

 

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

 

 

COMPLIANCE WITH STATUTORY REQUIREMENTS

 

        The Regional Office of Education #51 did not comply with certain statutory administrative requirements.  For example, the Illinois School Code (105 ILCS 5/3-6) requires the Regional Superintendent to report, in writing, to the county board on or before January 1 of each year, stating:  (1) the balance on hand at the time of the last report, and all receipts since that date, with the sources from which they were derived; (2) the amount distributed to each of the school treasurers in his or her county; and (3) any balance on hand.  Regional Office officials submitted their annual report prior to January 1, 2004.  However, the report provides only a listing of services provided by the Regional Office.  The Regional Office relies on their audit report, which was not completed by January 1, to provide the detailed balance information. Regional Office management believed that their annual report, along with the filing of the audit report when completed, would be adequate.

 

        The School Code (105 ILCS 5/3-12) also requires that on or before January 1 of each year, the Regional Superintendent shall publish in a newspaper of general circulation published in the region or post in each school building under his/her jurisdiction, certain information regarding the Office’s Institute Fund.  According to Regional Office management, they were unaware of this requirement and had not submitted the required report.

 

        Finally, the Illinois Administrative Code (23 Ill. Adm. Code 110.115) requires that fees for conferences, workshops, materials and other costs charged for discretionary activities not required by law or rule are to be determined on a cost-recovery basis.  Excess funds resulting from registrations or requests for materials/ services beyond the anticipated cost-recovery basis shall be deposited in an Enterprise Fund to be used solely to reduce the cost of similar items or to cover costs incurred due to less-than-anticipated registrations or requests for materials/services.  According to Regional Office management, they were unaware of the requirement to deposit excess fees into an Enterprise Fund (Finding 04-1, pages 11-13).

 

       The Regional Office of Education #51 accepted the recommendation to comply with the requirements of the Illinois Statutes and Illinois Administrative Code.

 

 

IMPROPER ALLOCATION OF COSTS

 

       The Regional Office of Education #51 does not maintain a cost allocation plan or an approved indirect cost rate to allocate indirect costs in accordance with OMB Circular A-87.  The Regional Office charges a program it administers for support salaries.  Such salaries are allowable expenditures under OMB Circular A-87.  However, where employees work on multiple activities or cost objectives, a distribution of their salaries or wages is required to be documented in accordance with the provisions of OMB Circular A-87 or be included in the ROE’s cost allocation plan.

 

       When an accumulation of indirect costs will ultimately result in charges to a Federal Award, a cost allocation plan or approved indirect cost rate is required. (Finding 04-2, pages 14-15)

 

       The Regional Office of Education accepted the recommendation, responding that it will maintain a cost allocation plan in accordance with OMB Circular A-87.

 

 

COMPUTERIZED ACCOUNTING SYSTEM DEFICIENCIES

 

       The Regional Office of Education #51’s accounting system allows for one-sided entries, and according to ROE management, did not post certain entries properly, which resulted in 11 fund trial balances being out-of-balance.  Eight of the 11 funds offset each other and were resolved.  The three remaining out-of-balance funds resulted in a total un-located difference of $2,000.  Additionally, the accounting system omitted two checks dated June 30, 2004 from the June 30, 2004 bank reconciliation report for unknown reasons.

 

       According to the Regional Office of Education (ROE) Accounting Manual, an ROE’s management is responsible for establishing and maintaining a system of internal controls that provides reasonable assurance about the reliability of its financial statements, operational compliance with legal and contractual provisions, safeguarding ROE assets, and the effectiveness and efficiency of ROE operations.  At the core of the system of internal controls is the accounting system.  (Finding 04-3, pages 16-18)

 

       The Regional Office of Education accepted the recommendation and noted that the Office’s accounting system has been upgraded which should eliminate the database problems experienced in Fiscal Year 2004.

 

 

AUDITORS’ OPINION

 

        Our auditors state the Regional Office of Education #51’s financial statements as of June 30, 2004 are fairly presented in all material respects.

 

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KJM:ro

 

SPECIAL ASSISTANT AUDITORS

 

        Our special assistant auditors were Sikich Gardner & Co., LLP, CPAs.