REPORT DIGEST

REGIONAL OFFICE OF EDUCATION # 54:
VERMILION COUNTY

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  February 8, 2023

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 3

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

• (22-1) The Regional Office of
Education #54 did not have sufficient
internal controls over the financial
reporting process.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

CONTROLS OVER FINANCIAL STATEMENT
PREPARATION

The Regional Office of Education #54
(ROE) did not have sufficient internal
controls over the financial reporting
process. The financial statements
required material audit adjustments in
order to ensure the balances were
accurate for the basis of accounting
selected for financial statement
presentation.

The School Code (105 ILCS 5/2-3.17a)
allows a Regional Office of Education
or Educational Service Center to
utilize a cash basis, modified cash
basis, or generally accepted
accounting principles (GAAP) basis of
accounting to prepare financial
statements for audit. The ROE has
chosen to utilize the modified cash
basis of accounting for financial
statement reporting. The ROE is
required to maintain a system of
controls over the preparation of
financial statements in accordance
with its selected basis of accounting.
The ROE’s internal controls over
financial reporting should include
adequately trained personnel with the
knowledge, skills, and experience to
prepare financial statements and
include all related disclosures as
required by the Governmental
Accounting Standards Board (GASB).

The financial statements submitted for
audit contained the following errors
and inaccuracies:

• The ROE’s fiduciary fund statements
included activity related to the ROE
in the distributive fund, which is not
a fiduciary relationship under GASB
Statement No. 84. Numerous adjustments
were required to report accurate
balances.
• Cash and cash equivalents were
understated by $38,071 and due from
other governments were overstated by
$38,071 in the governmental fund
statements and the government-wide
Statement of Activities due to the
adjustments related to the
distributive fund.
• In addition, National school lunch
and breakfast receipts totaling
$54,943 were reported in the Fiduciary
Fund activities and not in the
governmental activities. Accordingly,
federal source revenues and
expenditures were understated by
$54,943.
• Revenues were not properly
classified as local, State, and
federal sources in the governmental
funds, or as program revenues from
operating grants and local sources in
the governmental activities.

The ROE subsequently revised its
financial statements to correct the
errors noted above.

The Regional Office management
indicated this was an oversight.
(Finding 22-01, pages 11 – 13)

The auditors recommended that as part
of internal control over the
preparation of financial statements,
the ROE should implement comprehensive
preparation procedures to ensure the
financial statements and disclosures
are complete and accurate. These
procedures should be performed by a
properly trained individual(s)
possessing a thorough understanding of
the basis of accounting selected for
financial statements, GASB
pronouncements, and knowledge of the
ROE’s activities and operations.

ROE Response: The Regional Office will
work with its accounting firm to
ensure its financial statements and
disclosures are prepared accurately in
accordance with modified cash basis of
accounting.

AUDITORS’ OPINION

Our auditors state the Regional Office
of Education #54’s financial
statements as of June 30, 2022 are
fairly presented in all material
respects.

This financial audit was conducted by
the firm of Adelfia LLC.

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:BAO