REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #56: WILL
COUNTY

FINANCIAL AUDIT (IN ACCORDANCE WITH THE
UNIFORM GUIDANCE)
FOR THE YEAR ENDED JUNE 30, 2018

Release Date:  August 28, 2019

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: 1

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

• (18-1) The Regional Office of Education
#56 failed to fully insure and
collateralize cash balances.


• (18-2) The Regional Office of Education
#56 did not record salary obligations at
year end as a liability.


FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FAILURE TO FULLY INSURE AND COLLATERALIZE
CASH BALANCES

As of June 30, 2018, the Will County
Regional Office of Education #56 (ROE) had
a total of four cash accounts between the
ROE and its Professional Development
Alliance (PDA) with bank balances totaling
$4,405,577 at one financial institution.
The Federal Deposit Insurance Corporation
(FDIC) covers up to a maximum of $250,000
per entity. The ROE had pledged securities
for an additional $3,738,152. The ROE did
not have depository insurance or collateral
for the remaining $167,425.

The Public Funds Deposit Act (30 ILCS
225/1) gives the ROE the authorization to
request financial institutions to pledge
collateral for deposits in excess of the
federally insured limit. In addition,
prudent business practice requires that all
cash and investments held by financial
institutions for the ROE be adequately
covered by depository insurance or
collateral.

According to ROE officials, the accounts
for the PDA were coded as non-profit by the
bank and were not included under the
collateral report for FY18. (Finding
18-001, page 13)

The auditors recommended the ROE should
monitor bank balances on all accounts and
work with the financial institution to
provide collateral or enter into an
agreement with the financial institution to
have the cash balances monitored for
adequate collateral periodically and
adjusted as necessary.

ROE Response: The accounts for the PDA were
coded as non-profit by the bank and were
not included under the collateral report
for FY18. The bank now has included the PDA
under the ROE’s collateral report. The ROE
has contacted the bank to request a
monthly, quarterly, and yearly Letters of
Collateral for all bank accounts to ensure
adequate collateral.

RECORDING OBLIGATIONS

The Will County Regional Office of
Education #56 (ROE) prepared and recorded
electronic fund transfers for its July 15,
2018, July 31, 2018, and August 15, 2018
pay periods prior to June 30, 2018, but did
not disburse the funds to the employees
until the appropriate pay dates. The ROE
posted the payroll expenditures for these
pay periods to its general ledger prior to
June 30, 2018, as a reduction of cash and
as an expenditure.

Generally Accepted Accounting Principles
require obligations at year end to be
recorded as a liability to the entity.

According to ROE officials, they were not
aware that they had reported obligated
salaries incorrectly at year end. (Finding
18-002, page 14)

The auditors recommended the ROE should
report obligated salaries at year end as a
liability and record the actual payroll
disbursements at the end of the appropriate
pay period.

ROE Response: The ROE will report obligated
salaries at year end as a liability and
record the actual payroll disbursements at
the end of the appropriate pay period.


AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #56’s financial statements as of
June 30, 2018 are fairly stated in all
material respects.

This financial audit was conducted by the
firm of McGreal & Company, PC.

JEANNE MICHAUD
Audit Manager

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:JMM