REPORT DIGEST

REGIONAL OFFICE OF EDUCATION #3: BOND,
CHRISTIAN, EFFINGHAM, FAYETTE, AND
MONTGOMERY COUNTIES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2025

Release Date:  February 18, 2026

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: 1

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

• (25-1) The Regional Office of Education
#3 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 #3 (ROE)
did not have sufficient internal controls
over the financial reporting process. While
the ROE maintains controls over the
processing of most accounting transactions,
there are not sufficient controls over the
preparation of the cash basis financial
statements for management or employees in
the normal course of performing their
assigned functions to prevent or detect
financial statement misstatements and
disclosure errors and omissions in a timely
manner.

The School Code 105 ILCS 5/2-3.17a allows a
ROE 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 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.

During review of the ROE’s financial
information prepared by the ROE, it was
noted the ROE did not have adequate
controls to ensure financial statement
balances were accurate. While the ROE did
maintain records to indicate the balances
of financial statement accounts, audit
adjustments were proposed in order to
ensure those balances were reasonable in
accordance with the cash basis of
accounting. The following issues were
noted:

• The ROE’s preliminary financial
statements required material adjustments to
the Institute fund in order to present the
financial statements in accordance with the
cash basis of accounting.
• The ROE did not have adequate controls
over the classification of transactions
which resulted in expenditure line items to
be overstated and understated.
• The ROE did not have adequate controls
over the maintenance of complete records as
the accounting records did not agree to the
preliminary financial statements.
• The ROE did not have adequate control
over the preparation and presentation of
budgets on the preliminary financial
statements as budgetary information was not
correct.
• The ROE’s preliminary financial
statements required material adjustments to
allocate interest earned from the pooled
cash account to each source of funds.
• The ROE’s preliminary financial
statements reported the Instructional Coach
IGA as federal revenue and included
expenditures on the Schedule of
Expenditures of Federal Awards (SEFA).
Auditors noted that these funds should be
reported as state revenue and should not be
on the SEFA. Due to this, federal
expenditures are under the $750,000
threshold and the SEFA should not be
reported in the financial statements.
• The ROE’s preliminary financial
statements required a prior period
adjustment to reduce the beginning fund
balance of the Bus Driver Training Fund and
increased the fund balance of the General
Fund. This accounted for salaries and
benefit expenses that were disbursed during
the year ended June 30, 2024, but not
originally reflected as disbursement from
the Bus Driver Training Fund.

Regional Office management indicated the
exceptions were due to the Business Office
Bookkeepers not allowing sufficient time to
review the financial statements with the
contracted accounting firm before sending
to the approved auditors.

The auditors recommended the ROE should
implement comprehensive preparation and/or
review procedures as part of internal
control over the preparation of financial
statements to ensure the financial
statements, including 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 ROE
activities and operations.

ROE Response: The ROE will implement
controls over financial statements for both
the internal Business Office Bookkeepers
and the contracted accounting firm to
prepare and review the financial statements
to ensure that balances and classifications
are accurate for financial statement
preparation. The ROE will also implement a
timeline allowing sufficient time to review
financial statements before submitting to
the approved auditors.

AUDITORS’ OPINION

Our auditors state the Regional Office of
Education #3’s financial statements as of
June 30, 2025 are fairly presented in all
material respects.

This financial audit was conducted by the
firm of West & Company, LLC.

TRICIA WAGNER
Division Director

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

FRANK J. MAUTINO
Auditor General

FJM:JRB