Audit 391143

During the course of the audit, auditors noted that 8 of the 29 (28%) quarterly expenditure reports required by the Illinois State Board of Education were not submitted timely. Five of the quarterly expenditure reports were submitted 1-30 days late, one expenditure report was submitted 30 to 60 days late, and two expenditure reports were submitted 60 to 90 days late. For the federal programs, auditors noted that 3 out of the 9 (33%) quarterly expenditure reports required by the Illinois State Board of Education for the federal programs were not submitted timely. For the federal programs, two of the quarterly expenditure reports were submitted 1 to 30 days late and one quarterly expenditure report was submitted 60 to 90 days late. In addition, auditors noted that supplies and materials expenditures exceeded budgeted amounts by $6,851 for the Elementary and Secondary School Emergency Relief Fund 2022 grant. Auditors also noted that the 6/30/23 expenditure report for the Elementary and Secondary School Emergency Relief Fund 2022 grant claimed $54,708 of expenditures prior to the expenditures actually being paid by the ROE. The Illinois State Board of Education requires that expenditure reports be prepared on the cash basis of accounting. Therefore, an expenditure should not be submitted for reimbursement prior to the ROE paying for the expenditure.

During the course of audit fieldwork, auditors noted the following: - The ROE did not use time and effort documentation to distribute salary and benefit costs for employees paid from multiple funding sources. The ROE budgeted amounts at the beginning of the year to allocate payroll expense to each fund; however, the ROE never reconciled the amounts expensed in the general ledger to the employees’ submitted timesheets. Therefore, the ROE was unable to determine the reasonableness of the allocation of salaries and benefits amongst federal and State programs. - For four out of the twenty-four (17%) payroll disbursements tested, the withholding information used to calculate the employees’ pay did not agree to the Federal or Illinois Forms W-4 on file. For the federal program, auditors noted for 3 out of the 4 (75%) payroll disbursements tested, the withholding information used to calculate the employees’ pay did not agree to the Federal or Illinois Forms W-4 on file. - One out of the twenty-four (4%) payroll disbursements tested inaccurately omitted the employees wages from being subject to Medicare tax.

The ROE does 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. During review of the ROE’s accounting records, auditors noted the ROE should be a single audit for the year ended June 30, 2023. Auditors then reviewed the initial draft financial statements provided by the ROE and noted the ROE had not included the Schedule of Expenditures of Federal Awards in the financial statements.