FAC Explorer

Audit 41672

FY End
2022-06-30
Total Expended
$1.01M
Findings
2
Programs
4
Organization: Kane County Regional Office of Education No. 31 (IL)
Year: 2022 Accepted: 2023-05-22
Auditor: Gw & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
46603 2022-001 Significant Deficiency - AB
623045 2022-001 Significant Deficiency - AB

Programs

ALN Program Spent Major Findings
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth $102,954 - 0
84.196 Education for Homeless Children and Youth $90,098 - 0
84.425 Education Stabilization Fund $46,538 Yes 0
16.710 Public Safety Partnership and Community Policing Grants $24,793 - 0

Contacts

Name Title Type
FNTJKY1718H1 Julie Hadjiev Auditee
6302325955 David Jelonek Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the modified cash basis of accounting, a special purpose framework that differs from generally accepted accounting principles. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal awards activity of Kane County Regional Office of Education No. 31 ("ROE No. 31") under the programs of the federal government for the year ended June 30, 2022. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the ROE No. 31, it is not intended to and does not present the modified cash basis financial position and changes in fund balance/net position of the ROE No. 31.
Title: Noncash Assistance Accounting Policies: Expenditures reported on the Schedule are reported on the modified cash basis of accounting, a special purpose framework that differs from generally accepted accounting principles. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. ROE No. 31 did not receive noncash assistance during the fiscal year.

Finding Details

Finding 2022-001
Criteria/Specific Requirement A critical part of the control structure surrounding the identification of grant expenditures eligible for reimbursement is the proper recording of such transactions in the general ledger. Adequate controls should be in place to ensure payroll changes are reflected in the Regional Office's records. Condition During control testing over payroll expenditures related to the Elementary and Secondary Emergency Relief (ESSER) III grant, it was noted that one of the employees charged to the grant was supposed to be paid by Kane County, on behalf of the Regional Office of Education, beginning with pay periods subsequent to November 30. Instead, a total of five pay periods continued to be charged to ESSER III after November 30 instead of the County. Each of these pay periods were requested for reimbursement with ESSER III funding. Regional Office of Education management did start properly recording the employee as a County expenditure beginning with the first payroll run in March 2022. Questioned Costs N/A Context Despite the incorrect posting of payroll costs to ESSER III accounts for five periods, the employee continued to perform the same tasks as a Truancy Officer, which was an allowable cost of the grant. However, the posting of activity to an incorrect grant account is an indicator of an incomplete control structure where mid-year changes in funding source for an employee may not be reviewed and verified to ensure proper posting in the general ledger. Effect Unallowable costs could be drawn down on grants, leaving the Regional Office of Education susceptible to potential noncompliance. Cause Controls were inadequate to ensure changes in funding sources for an employee are accurately and timely recorded in the general ledger. Recommendation We recommend the Regional Office of Education develop procedures to ensure timely communication of changes in funding source for a routine activity such as payroll. Such a review would ensure financial reporting accuracy and avoid potential noncompliance with grant funding. Management's Response When posting payroll in the Regional Office accounting system, net pay amounts for Kane County payroll and Regional Office payroll will be verified and any discrepancies will be discovered and corrected at that time. In addition, grant expenditure reports will be reviewed by the grant writer and finance director on a quarterly basis to ensure payroll costs posted to the grant are accurate.
Finding 2022-001
Criteria/Specific Requirement A critical part of the control structure surrounding the identification of grant expenditures eligible for reimbursement is the proper recording of such transactions in the general ledger. Adequate controls should be in place to ensure payroll changes are reflected in the Regional Office's records. Condition During control testing over payroll expenditures related to the Elementary and Secondary Emergency Relief (ESSER) III grant, it was noted that one of the employees charged to the grant was supposed to be paid by Kane County, on behalf of the Regional Office of Education, beginning with pay periods subsequent to November 30. Instead, a total of five pay periods continued to be charged to ESSER III after November 30 instead of the County. Each of these pay periods were requested for reimbursement with ESSER III funding. Regional Office of Education management did start properly recording the employee as a County expenditure beginning with the first payroll run in March 2022. Questioned Costs N/A Context Despite the incorrect posting of payroll costs to ESSER III accounts for five periods, the employee continued to perform the same tasks as a Truancy Officer, which was an allowable cost of the grant. However, the posting of activity to an incorrect grant account is an indicator of an incomplete control structure where mid-year changes in funding source for an employee may not be reviewed and verified to ensure proper posting in the general ledger. Effect Unallowable costs could be drawn down on grants, leaving the Regional Office of Education susceptible to potential noncompliance. Cause Controls were inadequate to ensure changes in funding sources for an employee are accurately and timely recorded in the general ledger. Recommendation We recommend the Regional Office of Education develop procedures to ensure timely communication of changes in funding source for a routine activity such as payroll. Such a review would ensure financial reporting accuracy and avoid potential noncompliance with grant funding. Management's Response When posting payroll in the Regional Office accounting system, net pay amounts for Kane County payroll and Regional Office payroll will be verified and any discrepancies will be discovered and corrected at that time. In addition, grant expenditure reports will be reviewed by the grant writer and finance director on a quarterly basis to ensure payroll costs posted to the grant are accurate.