REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #55: WHITESIDE
COUNTY

FINANCIAL AUDIT
For the Year Ended:  June 30, 2013

Release Date:  August 27, 2014

Summary of Findings:
Total this audit: 1
Total last audit: 1
Repeated from last audit: 1

State of Illinois, Office of the Auditor
General
WILLIAM G. HOLLAND, AUDITOR GENERAL

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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

• The Regional Office of Education #55 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 #55 is
required to maintain a system of controls over
the preparation of financial statements in
accordance with generally accepted accounting
principles (GAAP).  Regional Office internal
controls over GAAP financial reporting should
include adequately trained personnel with the
knowledge, skills and experience to prepare
GAAP based financial statements and include
all disclosures as required by the
Governmental Accounting Standards Board
(GASB).

The Regional Office of Education #55 did not
have sufficient internal controls over the
financial reporting process.  While the
Regional Office maintains controls over the
processing of most accounting transactions,
there are not sufficient controls over the
preparation of the GAAP based financial
statements for management or employees in the
normal course of performing their assigned
functions to prevent or detect and correct
financial statement misstatements and
disclosure omissions in a timely manner.

During review of the Regional Office of
Education #55’s financial information prepared
by the Regional Office, auditors noted that
the Regional Office did not have adequate
controls to ensure financial statement
balances were accurate.  While the Regional
Office did maintain records to indicate the
balances of financial statement accounts,
numerous material audit adjustments were
proposed in order to ensure those balances
were accurate.

Management did not effectively detect all of
the material adjustments needed in order to
present financial statements in accordance
with GAAP. (Finding 2013-001, pages 11-12)
This finding was first reported in 2009.

The auditors recommended that, as part of
internal control over the preparation of
financial statements, including disclosures,
the Regional Office of Education #55 should
implement comprehensive preparation procedures
to ensure that the financial statements,
including disclosures, are complete and
accurate.  These procedures should be
performed by a properly trained individual
possessing a thorough understanding of
applicable generally accepted accounting
principles, GASB pronouncements, and knowledge
of the Regional Office of Education’s
activities and operations.

The Regional Office of Education #55 responded
that it will continue to maintain its
accounting records on the cash basis of
accounting.  The Regional Office noted that,
at the present time, the additional cost to
the Regional Office of hiring or contracting
the services outweighs the benefits.  If
additional financial resources are made
available through the County or State of
Illinois, the Regional Office will consider
seeking the services of an accountant to
review the financial statements and related
disclosures for completeness and accuracy.
(For previous Regional Office response, see
Digest Footnote #1.)

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #55’s financial statements as of
June 30, 2013 are fairly presented in all
material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:KJM

AUDITORS ASSIGNED:  Winkel, Parker & Foster,
CPA PC were our special assistant auditors.

DIGEST FOOTNOTE

#1: Controls Over Financial Statement
Preparation - Previous Regional Office
Response

In its prior response in 2012, the Regional
Office of Education #55 responded that it will
continue to maintain its accounting records on
the cash basis of accounting.  The Regional
Office noted that, at the present time, the
additional cost to the Regional Office of
hiring or contracting the services outweighs
the benefits.  If additional financial
resources are made available through the
County or State of Illinois, the Regional
Office will consider seeking the services of
an accountant to review the financial
statements and related disclosures for
completeness and accuracy.