FY11-ROE50-Fin-Full

              State of Illinois
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
FINANCIAL AUDIT
(In Accordance with the Single Audit Act and
OMB Circular A-133)
For the Year Ended June 30, 2011
Performed as Special Assistant Auditors
for the Office of the Auditor General
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
TABLE OF CONTENTS
FOR THE YEAR ENDED
JUNE 30,2011
TABLE OF CONTENTS
Officials .
Compliance Report Summary .
Financial Statement Report Summary .
FINANCIAL SECTION
Independent Auditor's Report .
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
Independent Auditor's Report on Compliance with Requirements That Could
Have a Direct and Material Effect on Each Major Program and on Internal
Control Over Compliance in Accordance with OMB Circular A-i33 .
Schedule of Findings and Questioned Costs
Section I - Summary of Auditor's Results .
Section II - Financial Statement Findings .
Section III - Findings and Questioned Costs for Federal Awards .
Corrective Action Plan for Current Year Audit Findings .
Summary Schedule of Prior Audit Findings .
Management's Discussion and Analysis .
BASIC FINANCIAL STATEMENTS
Statement ofNet Assets .
Statement of Activities .
Balance Sheet - Governmental Funds .
Reconciliation of the Governmental Funds Balance Sheet
to the Statement ofNet Assets .
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds .
PAGE
1
2-3
4
5-6
7-8
9-10
11
12a-b
13a
14
15
16a-16i
17
18
19
20
21
Reconciliation ofthe Statement of Revenues, Expenditures and Changes in
Fund Balances to the Statement of Activities - Governmental Funds ..
Statement ofNet Assets - Proprietary Fund .
Statement of Revenues, Expenses and Changes in
Fund Net Assets - Proprietary Fund ..
Statement of Cash Flows - Proprietary Fund .
Statement of Fiduciary Net Assets - Fiduciary Fund .
Notes to the Financial Statements .
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund Schedule of Funding Progress .
SUPPLEMENTAL INFORMATION
Combining Schedule of Accounts
General Fund .
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - General Fund Accounts .
Budgetary Comparison Schedule
Regional Safe Schools .
Combining Schedule of Accounts
Education Fund .
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - Education Fund Accounts .
Budgetary Comparison Schedule
Education Fund Accounts
McKinney-Vento Education for Homeless Children & youth .
Title I School Improvement and Accountability .
Truants Alternative/Optional Education .
ARRA Title I School Improvement & Accountability .
Math and Science Sprouting Stems (10-4936-10) .
Math and Science Sprouting Stems (11-4936-10) .
Math and Science Green Stems (10-4936-00) .
Math and Science Green Stems (11-4936-00) .
Title I School Dropout Prevention Project. .
Title I Reading First .
Beginning Teacher Induction and Mentoring .
22
23
24
25
26
27-52
53
54
55
56
57-61
62-66
67
68
69
70
71
72
73
74
75
76
77
ROE School Services (10-3730-00) .
ROE School Services (11-3730-00) ..
Readiness and Emergency Management for Schools .
Federal Special Education Preschool Discretionary (10-4605-00) ..
Federal Special Education Preschool Discretionary (11-4605-00) ..
Teaching American History - 1 High School ..
Teaching American History - 2 Grades 4 - 6 ..
Gifted Education Pilot .
Combining Balance Sheet
Nonmajor Special Revenue Funds .
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue Funds .
Statement of Fiduciary Net Assets
Agency Fund .
Statement of Changes in Assets and Liabilities
Agency Fund .
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards ..
Notes to the Schedule of Expenditures of Federal Awards .
78
79
80
81
82
83
84
85
86
87
88
89
90-91
92-93
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
OFFICIALS
Regional Superintendent
(Acting Effective October 1, 2011)
Assistant Regional Superintendent (Current)
Regional Superintendent
(During the Audit Period, Acting Effective
July 1,2010 through September 30, 2011)
Assistant Regional Superintendent
(During the Audit Period, Acting Effective
July 1, 2010 through September 30, 2011)
Office is located at:
1000 South Illinois Street
Belleville, IL 62220
1
Mrs. Susan Sarfaty
No Current Assistant
Regional Superintendent
Mr. Brad J. Harriman
Mrs. Susan Sarfaty
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
COMPLIANCE REPORT SUMMARY
The compliance audit testing performed during this audit was conducted in accordance with Government
Auditing Standards and in accordance with the Illinois State Auditing Act.
AUDITOR'S REPORTS
The auditor's reports on compliance and on internal controls do not contain scope limitations,
disclaimers, or other significant non-standard language.
SUMMARY OF AUDIT FINDINGS
Number of
Audit findings
Repeated audit findings
Prior recommendations implemented
or not repeated
This Audit
1o
o
Prior Audit
o
o
o
An additional matter which is less than a significant deficiency or material weakness but more than
inconsequential, has been reported in a Management Letter of Comment to the Regional Superintendent.
In prior years, this issue may have been included as an immaterial finding in the auditor's report.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Description
FINDINGS (GOVERNMENT AUDITING STANDARDS)
Finding Type
11-1 12a Inadequate Internal Controls Over Compliance Significant deficiency
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
11-1 12a Inadequate Internal Controls Over Compliance
2
Significant deficiency
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
COMPLIANCE REPORT SUMMARY
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
NONE
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
NONE
INFORMAL EXIT CONFERENCE
The findings and recommendations appearing in this report were discussed with Agency personnel at an
informal exit conference on September 21, 2011. Attending were Brad Harriman, Regional
Superintendent, Annabelle Gillespie, Comptroller, and Michelle D. Smith, CPA, Manager, Kemper CPA
Group LLP. Brad Harriman retired as Regional Superintendent as of September 30, 2011; responses to
the recommendations were provided by Susan Sarfaty, Regional Superintendent as of October 1, 2011.
3
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
FINANCIAL STATEMENT REPORT
SUMMARY
The audit of the accompanying basic financial statements of the Regional Office of Education #50 was
performed by Kemper CPA Group LLP.
Based on their audit, the auditors expressed an unqualified opinion on the Regional Office of Education
#50's basic financial statements.
4
KEM ER
-CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the accompanying financial
statements of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the St. Clair County Regional Office of Education #50, as of
and for the year ended June 30, 2011, which collectively comprise the St. Clair County Regional Office
of Education #50's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the St. Clair County Regional Office of Education #50's
management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the St. Clair County Regional Office of Education #50,
as of June 30, 2011, and the respective changes in financial position and cash flows, where applicable,
thereof for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
5
7200 Eagle Crest Blvd. II Evansville, IN 47715-8154
Phone: (812)421-8000 Fax: (812)421-2292 kempercpa.com
The St. Clair County Regional Office of Education #50 adopted GASB Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions during the year ended June 30, 2011. The
statement changed the classifications of governmental fund balances and clarified the definitions of
existing fund types. The adoption of this statement had no effect on any of the St. Clair County
Regional Office of Education #50's governmental funds' assets or liabilities nor was there any effect to
the total amount of any of the St. Clair County Regional Office of Education #50's governmental fund
balances as of and for the year ended June 30, 2011.
In accordance with Government Auditing Standards, we have also issued a report dated December 28,
2011, on our consideration of the St. Clair County Regional Office of Education #50's internal control
over financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and compliance and the results of that testing, and
not to provide an opinion on the internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.
The Management's Discussion and Analysis and Illinois Municipal Retirement Fund Schedule of
Funding Progress on pages 16a-16i, and 54 are not a required part of the basic financial statements but
are supplementary information required by accounting principles generally accepted in the United States
of America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the St. Clair County Regional Office of Education #50's basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparison schedules
are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes
of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic
financial statements. The combining and individual nonmajor fund financial statements, budgetary
comparison schedules, and the Schedule of Expenditures of Federal Awards have been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
Certified Public Accountants and Consultants
Evansville, Indiana
December 28,2011
6
KEMPER
CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTINGAND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the St. Clair County Regional Office of Education #50, as of and for the year ended June
30, 2011, which collectively comprise the St. Clair County Regional Office of Education #50's basic
financial statements and have issued our report thereon dated December 28, 2011. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General ofthe United States.
Internal Control Over Financial Reporting
Management of the St. Clair County Regional Office of Education #50 is responsible for establishing
and maintaining effective internal control over financial reporting. In planning and performing our
audit, we considered the Regional Office of Education #50's internal control over financial reporting as a
basis for designing our auditing procedures for the purpose of expressing our opinions on the financial
statements and not for the purpose of expressing our opinion on the effectiveness of the St. Clair County
Regional Office of Education #50's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the Regional Office of Education #50's internal control over
financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on a
timely basis.
7
7200 Eagle Crest Blvd. II Evansville, IN 47715-8154
Phone: (812)421-8000 Fax: (812)421-2292 kempercpa.com
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in the internal control
over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the St. Clair County Regional Office of
Education #50's financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of
noncompliance or other matters that is required to be reported under Government Auditing Standards
and which is described in the accompanying Schedule of Findings and Questioned Costs as item 11-1.
We also noted certain matters which we have reported to management of the St. Clair County Regional
Office of Education #50 in a separate letter dated December 28, 2011.
St. Clair County Regional Office of Education #50's responses to the findings identified in our audit are
described in the accompanying Schedule of Findings and Questioned Costs. We did not audit the St. Clair
County Regional Office of Education #50's responses and, accordingly, we express no opinion on them.
This report is intended solely for the information and use of the Auditor General, the General Assembly,
the Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois
State Board of Education, federal awarding agencies and pass-through entities and is not intended to be
and should not be used by anyone other than these specified parties.
Certified Public Accountants and Consultants
Evansville, Indiana
December 28, 2011
8
KEMPER
CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD
HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL
CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33
Honorable William G. Holland
Auditor General
State of Illinois
Compliance
We have audited the St. Clair County Regional Office of Education #50's compliance with the types of
compliance requirements described in the u.s. Office of Management and Budget (OMB) Circular A-i33
Compliance Supplement that could have a direct and material effect on each of the St. Clair County Regional
Office of Education #50's major federal programs for the year ended June 30, 2011. The St. Clair County
Regional Office of Education #50's major federal programs are identified in the summary of auditor's results
section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the
requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is
the responsibility of the St. Clair County Regional Office of Education #50's management. Our
responsibility is to express an opinion on the St. Clair County Regional Office of Education #50's
compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-I33, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and material effect on a
major federal program occurred. An audit includes examining, on a test basis, evidence about the Regional
Office of Education #50's compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination of the St. Clair County Regional Office of
Education #50's compliance with those requirements.
In our opinion, the St. Clair County Regional Office of Education #50 complied, in all material respects,
with the compliance requirements referred to above that could have a direct and material effect on each of its
major federal programs for the year ended June 30, 2011. However, the results of our auditing procedures
disclosed an instance of noncompliance with those requirements, which is required to be reported in
accordance with OMB CircularA-I33 and which is described in the accompanying Schedule of Findings
and Questioned Costs as item 11-1.
9
7200 Eagle Crest Blvd. IiII Evansville, IN 47715-8154
Phone: (812)421-8000 Fax: (812)421-2292 kempercpa.com
Internal Control Over Compliance
The management of the St. Clair County Regional Office of Education #50 is responsible for establishing
and maintaining effective internal control over compliance with the requirements of laws, regulations,
contracts, and grants applicable to federal programs. In planning and performing our audit, we considered
the St. Clair County Regional Office of Education #50's internal control over compliance with the
requirements that could have a direct and material effect on a major federal program to determine our
auditing procedures for the purpose of expressing our opinion on compliance and to test and report on
internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of
expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of the St. Clair County Regional Office of Education #50's internal
control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of the internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses, as defined
above. However, we identified a certain deficiency in internal control over compliance that we consider to
be a significant deficiency as described in the accompanying Schedule of Findings and Questioned Costs as
item 11-1. A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal program
that is less severe than a material weakness in internal control over compliance, yet important enough to
merit attention by those charged with governance.
St. Clair County Regional Office of Education #50's response to the finding identified in our audit is
described in the accompanying Schedule of Findings and Questioned Costs. We did not audit St. Clair
County Regional Office of Education #50's response and, accordingly, we express no opinion on the
response.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois State
Board of Education, federal awarding agencies and pass-through entities and is not intended to be and should
not be used by anyone other than these specified parties.
Certified Public Accountants and Consultants
Evansville, Indiana
December 28,2011
10
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued:
Internal control over financial reporting:
• Material weaknesses identified?
• Significant deficiencies identified that are not considered to
be material weaknesses?
• Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
• Material weaknesses identified?
• Significant deficiencies identified that are not considered to
be material weaknesses?
Type of auditor's report issued on compliance for major programs:
Unqualified
No
No
No
No
No
Unqualified
Any audit findings disclosed that are required to be reported in accordance
with OMB Circular A-133, Section .510(a)? Yes
Identification of major programs:
CFDA Number(s)
84.010 and 84.389
84.360
84.410
Name of Federal Program or Cluster
Title I, Part A Cluster, School Improvement & Accountability
Title I School Dropout Prevention Project
ARRA Education Jobs Fund
Dollar threshold used to distinguish between Type A and Type B programs: $300,000
Auditee qualified as a low-risk auditee?
11
Yes
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION II - FINANCIAL STATEMENT FINDINGS
Finding No. 11-1- Inadequate Internal Controls over Compliance
Federal Program Name: Mathematics and Science Partnership
Project #'s: 11-4936-00
CFDA#: 84.366B
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific Requirement:
The Regional Office of Education #50 has several federally funded grant programs. Grant monies
can only be used for allowable expenditures as outlined in grant agreements.
Condition:
Due to later reimbursements, a program lacked cash to pay for expenditures, resulting in a loan from
another program. A review of the amounts due between programs showed a $2,153 loan from
Mathematics and Science Partnership program to the Mental Health Parent Resource program. Loans
are not one of the allowed uses of the Mathematics and Science Partnership program.
Questioned Costs:
$2,153
Context:
The Mathematics and Partnership grant loaned its funds to the Mental Health Parent Resource
program during the year.
Effect:
The Regional Office of Education #50 was not in compliance with the Mathematics & Science
Partnership grant.
Cause:
The bookkeeper that administers this program has many years experience with grant programs, but is
fairly new to administering federal grant funds. The comptroller was out of the office when the
transaction occurred. The comptroller would normally approve these transactions and the person
who approved the transaction overlooked the fact that this was a grant.
12a
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION II - FINANCIAL STATEMENT FINDINGS (Concluded)
Finding No. 11-1- Inadequate Internal Controls over Compliance (Concluded)
Recommendation:
Any loans made between funds should only be made from discretionary funds. Each
transaction should be examined to ensure that grant funds are not loaned to other programs.
All bookkeepers and individuals authorizing funding movement should be aware of the
prohibition against loaning restricted funding.
Management's Response:
ROE #50 has established procedures to assure that loans between funds are only made from
discretionary funds. In October, all bookkeepers and program coordinators/directors were
familiarized with the rules which prohibit loans from restricted funds. A procedure on loans
was added to the Fiscal Policies & Procedures Manual. This training will be a routine part of
orientation for new staff in Finance and for those authorized to approve loans.
12b
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION III - FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS:
INSTANCES OF NONCOMPLIANCE:
Finding No. 11-1 - Inadequate Internal Controls over Compliance (details on pages 12a­12b)
MATERIAL WEAKNESSES:
None
13a
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Corrective Action Plan
Finding No. 11-1- Inadequate Internal Controls over Compliance
Condition:
Due to later reimbursements, a program lacked cash to pay for expenditures, resulting in a
loan from another program. A review of the amounts due between programs showed a $2,153
loan from Mathematics and Science Partnership program to the Mental Health Parent
Resource program. Loans are not one of the allowed uses of the Mathematics and Science
Partnership program.
Plan:
ROE #50 has established procedures to assure that loans between funds are only made from
discretionary funds. In October, all bookkeepers and program coordinators/directors were
familiarized with the rules which prohibit loans from restricted funds. A procedure on loans
was added to the Fiscal Policies & Procedures Manual. This training will be a routine part of
orientation for new staff in Finance and for those authorized to approve loans.
Anticipated Date of Completion:
Immediately upon learning of oversight.
Name of Contact Person:
Honorable Susan Sarfaty, Regional Superintendent of Schools
14
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Finding No.
NONE
Condition
15
Current Status
MANAGEMENT'S DISCUSSION AND ANALYSIS
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
The discussion and analysis of St. Clair County Regional Office of Education #50's (ROE)
financial performance provides an overall narrative review of the ROE's financial activities for
the year ended June 30, 2011. The intent of this discussion and analysis is to look at the ROE's
performance as a whole. Readers should also review the notes to the basic financial statements
and the financial statements to enhance their understanding of the ROE's financial performance.
Information contained in this section is qualified by the more detailed information contained
elsewhere in the financial statements, notes to financial statements and any accompanying
materials. To the extent this discussion contains any forward-looking statements of the ROE's
plans, objectives, expectations and prospects, the actual results could differ materially from those
discussed herein.
During fiscal year 2011 the Regional Office of Education #50 implemented Governmental
Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, which required certain programs and funds to be
reclassified and the restatement of beginning fund balances as detailed in Note 13 to the financial
statements. Because of these reclassifications the fund analysis is not comparable between fiscal
year 2010 and fiscal year 2011.
This section is a summary of the ROE's financial activities based on currently known facts,
decisions, or conditions. It is also based on both the government-wide and fund-based financial
statements. The results of the current year are discussed in comparison with the prior year.
2011 FINANCIAL HIGHLIGHTS
• Total net assets of the ROE's governmental activities are $1,646,199, an increase of
$96,707 or 6.2% from fiscal year 2010 net assets. This increase was primarily due to the
receipt of state grant funds from project year 2010 which had reduced the FY 2010 fund
balance. Net assets of the ROE's enterprise fund are $314,454 a decrease of $20,187 or
6.0% from fiscal year 2010 net assets. Total net assets for the ROE are $1,960,653, an
increase of$76,520 from fiscal year 2010.
• General governmental revenues account for $1,384,657 in revenue, or 24.2% of all
governmental revenues. Program specific revenues in the form of charges for services
and grants and contributions accounted for $4,344,494 or 75.8% of total governmental
revenues.
• The ROE governmental activities had $5,632,444 in expenses; only $4,344,494 of these
expenses were offset by program specific charges for services, grants and contributions.
The ROE had adequate unrestricted net assets to provide for the rest of the ROE's
expenses.
• Among major funds, the General Fund had $1,369,321 in revenues and $1,243,729 in
expenditures. The General Fund's fund balance increased $164,007 or 15.3% over the
prior year as restated. This increase was mainly due to the receipt of PY 2010 Regional
Safe School grant payments which were received more than 60 days after the end of FY
2010 and were included in revenue in FY 2011.
16a
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
• Capital assets purchased during the year totaled $123,199. In the governmental funds,
capital assets net of depreciation increased by $49,386. Including the Enterprise Fund,
capital assets for the ROE increased $50,705. This increase was due to the purchase of
mathematics and science manipulatives for teachers and computers for school coaches.
" The ROE has no long-term debt.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the ROE's basic financial
statements. The ROE's basic financial statements comprise of three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains other supplementary information in addition to
the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the ROE's finances, in a manner similar to
a private-sector business. These statements are prepared using the accrual basis of accounting
and include all assets and liabilities.
The Statement ofNet Assets presents information on all the ROE's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets
may serve as a useful indicator of whether the financial position of the ROE is improving or
deteriorating.
The Statement of Activities presents information showing how the ROE's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal years.
The government-wide financial statements outline functions of the ROE that are principally
supported by grants, contracts and contributions, and governmental activities. The governmental
activities of the ROE include instructional services and administrative expenses. The
government-wide financial statements can be found on pages 17- 18 ofthis report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The ROE
uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the ROE can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
16b
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial
statements. However, unlike the government-wide financial statements, governmental
fund financial statements focus on current spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating the ROE's current financing requirements. Governmental Funds are
reported using modified accrual accounting. This method of accounting measures cash
and other assets that can be easily converted to cash. The Governmental Fund
statements provide a detailed short-term view of the ROE's operations.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government­wide
financial statements. By doing so, readers may better understand the long-term
impact of the ROE's current financing decisions. Both the governmental fund Balance
Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in
Fund Balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities. These reconciliations are on pages 20
and 22, respectively.
The ROE maintains individual governmental funds in accordance with both the Regional
Office of Education Accounting Manual and the Accounting Manual for Public School
Districts issued by the Illinois State Board of Education. Information is presented
separately in the governmental fund Balance Sheet and in the governmental fund
Statement of Revenues, Expenditures, and Changes in Fund Balances for all major funds.
All non-major funds are combined together and presented in these reports as other non­major
funds.
The basic governmental fund financial statements can be found on pages 19 and 21,
respectively.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit
of parties outside the ROE. Fiduciary funds are not reflected in the government-wide
financial statements because resources of those funds are not available to support the
ROE's own programs. The accrual basis of accounting is used for fiduciary funds. The
ROE is responsible for ensuring that the assets reported in these funds are used for their
intended purpose. The ROE's fiduciary activities are presented in a separate Statement of
Fiduciary Net Assets on page 26.
Proprietary funds.
The purpose of the Enterprise Fund is to hold any excess funds collected from
Workshops and/or Technology Services. These funds are used solely to offset Workshop
and Technology Services incurred due to less than anticipated registrations or more than
anticipated materials and services. The ROE's proprietary statements can be found on
pages 23 - 25.
16c
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 27 - 52 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents certain supplementary information concerning the ROE's budget process.
The ROE does not adopt an annual operating budget for the Special Revenue Funds, but does
adopt individual budgets for some grants in the General Fund and Education Fund. A budgetary
comparison statement has been provided for those grants in the General Fund and Education
Fund. This supplementary information can be found on pages 56 and 67 - 85 ofthis report.
Additionally, a Schedule of Expenditures of Federal Awards is required by OMB Circular A-133
and can be found on pages 90 - 91 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net assets. Net assets may serve over time as a useful indicator of government's financial
position. In the case ofthe ROE, assets exceeded liabilities by $1,960,653 as of June 30, 2011.
By far the largest portion of the ROE's net assets (78.0%) is unrestricted. However, 10.5% of
net assets are related to the Institute Fund, GED fund, and Bus Driver fund and restricted for
teacher professional development, GED testing and Bus Driver training. Investment in capital
assets (e.g., equipment and furniture) represents 11.5% of the ROE's net assets.
The ROE's financial position is a product of several financial transactions including the net
result of activities, the acquisition and disposal of capital assets and the depreciation of capital
assets. The following table presents a summary of the ROE's net assets for the fiscal year ended
June 30, 2011 compared to prior year.
16d
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
Current Assets
Capital Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Capital Assets net
Restricted educational
purposes
Unrestricted
Total Net Assets
Condensed Statement of Net Assets
Governmental Activities Business-Type Activities Total Primary Government
2010 2011 2010 2011 2010 2011
$ 2,429,474 $ 2,093,925 $ 323,102 $ 300,593 $ 2,752,576 $ 2,394,518
158.397 207,783 16,654 17,973 175,051 225,756
2,587,871 2,301,708 339,756 318,566 2,927,627 2,620,274
1,038.379 655,509 5,115 4,112 1,043.494 659,621
1,038.379 655.509 5,115 4,112 1,043.494 659,621
158,397 207,783 16,654 17,973 175,051 225,756
99,298 205,317 99,298 205,317
1,291,797 1,233,099 317,987 296.481 1,609,784 $ 1,529,580
$ 1,549,492 $ 1,646,199 $ 334,641 $ 314,454 $ 1,884,133 $ 1,960,653
16e
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
Changes in net assets. The ROE's total revenues for the fiscal year ended June 30, 2011 were
$5,729,151. The total cost of all programs and services was $5,632,444. The following table
presents a summary ofthe changes in net assets for the fiscal year ended June 30, 2010 and 2011.
ROE #50 Change in Net Assets
Year Ended June 30, 2010 and 2011
Governmental
Activities
Business-Type
Activities
Total Primary
Government
0/0
Change
$5,760,532 $4,344,494 $ $
97,775 54,001
Revenues:
Program revenues:
Operating Grants/Contributions
Charges for Services
General Revenues:
Local Sources
On-Behalfpayments - Local
State Sources
Federal Sources
On-Behalf payments - State
Interest
Total Revenues
Expenses:
Instructional Services
On-Behalf Payments
Workshop/Testing Expenses
Total Expenses
Increase (Decrease) in Net
Assets
Net Assets - Beginning
Net Assets Ending
2010
359,812
304,566
38,683
40,708
397,701
2,308
6,904,310
6,121,122
702,267
6,823,389
80,921
1,468,571
$1,549,492
2011
376,280
306,127
338,449
356,200
7,601
5,729,151
4,970,117
662,327
5,632,444
96,707
1,549,492
1,646,199
2010
231
98,006
126,154
126,154
(28,148)
362,789
$ 334,641
16f
2011
1,295
55,296
75,483
75,483
(20,187)
334,641
314,454
2010
$5,760,532
97,775
359,812
304,566
38,683
40,708
397,701
2,539
7,002,316
6,121,122
702,267
126,154
6,949,543
52,773
1,831,360
$ 1,884,133
2011
$4,344,494
54,001
376,280
306,127
338,449
356,200
8,896
5,784,447
4,970,117
662,327
75,483
5,707,927
76,520
1,884,133
1,960,653
2010-2011
(24.6%)
(44.8%)
4.6%
.5%
774.9%)
(100.0%)
(10.4%)
250.4%
(17.4%)
(18.8%)
(5.7%)
(40.2%)
(17.9%)
4.1%
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
Governmental activities. The following table presents the cost of two major ROE functional
activities: instructional services and administrative expenses. Administrative expenses include
guidance and social work services, operation & maintenance, pupil transportation, food service,
planning and evaluation, and fiscal services. The table also shows each function's net cost (total
cost less charges for services generated by the activities and. grants provided for specific
programs). The net cost shows the amount funded by the General Revenues. Both revenues and
expenses decreased from the prior year due to fewer grant programs.
Instructional Services
Administrative Expenses
Total expenses
Total
Expenses
$ 4,970,117
662,327
$ 5.632.444
Net (Expense)
Revenue
$ (625,623)
(662,327)
$ (1.287.950)
Enterprise activities. The following table presents the cost of the ROE's workshop fund. The
majority of related expenses are salaries and benefits, contract labor and travel, and supplies and
materials for the workshop seminars. The table also shows the fund's net cost (total cost less
charges for services generated by the activities). The net revenue is down, charges for services
were down, and expenses were increased. This was due to fewer workshops offered for a fee in
2010 while basic services and their expenses continued.
Workshop/Testing Costs
Total
Expenses
$ 75,483
Net (Expense)
Revenue
$ (21,482)
FINANCIAL ANALYSIS OF THE ROE'S FUNDS
As noted earlier, the ROE uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds. The focus of the ROE's governmental funds is to provide information on
current inflows, outflows and balances of spendable resources. Such information is useful in
assessing the ROE's financing requirements. In particular, unreserved fund balance may serve
as a useful measure of the ROE's net resources available for spending at the end of the fiscal
year.
The financial performance of the ROE as a whole is reflected in its governmental funds. As the
ROE completed the year, its governmental funds reported a combined fund balance of
$1,438,416, which is an increase of $284,767 over the previous year. This increase was largely
due to the receipt of grant payments of $237,446 from project year 2010 which were received
more than 60 days after the end ofFY 2010 and were included in revenue in FY 2011.
16g
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
The General Fund is the principal operating fund of the ROE. The fund balance in the General
Fund for the fiscal year increased by $164,007. This increase was primarily due to the receipt of
grant payments of $237,446 from project year 2010 which were received more than 60 days after
the end of FY 2010 which had reduced the fund balance at June 30, 2010. The fund balance of
Other Governmental Funds showed an increase of $120,760 which was also due primarily to
receipt of outstanding payments from the prior year. The fund balance for the Institute Fund
increased $19,355 as more certificate registration fees were paid than expended.
Enterprise Funds. The net assets in the Enterprise Fund as of June 30, 2011 were $314,454, a
decrease of $20,187. The decrease was due to a management decision to offer more workshops
free of charge since schools had reduced discretionary funds for staff development. The
remaining funds provide a good reserve to insure that the ROE can continue to offer high quality
workshops for teachers and administrators and solid technology assistance to schools.
BUDGETARY HIGHLIGHTS
Over the course of the year, the ROE revised the budgets for most grant programs in the
Education Fund. These budget adjustments were the result of revisions in the plan to accomplish
specific goals and activities outlined in the grant programs.
A schedule showing the original and final budget amounts compared to the ROE's actual
financial activity for the Education Fund grants is provided in this report as supplementary
information.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. As of June 30, 2011, the ROE's total capital assets at cost for Governmental
Activities and Business-type Activities were $689,689 and $42,179 respectively, including
furniture and equipment. This amount represents an increase of $86,415 for the Governmental
Activities and an increase of $3,435 for the Business-type Activities from the previous year.
Additions and deletions during fiscal year 2011 totaled $119,764 and $33,349 respectively for
Governmental Activities. Additions for Business-type Activities totaled $3,435 and there were
no deletions in this Fund.
Total accumulated depreciation as of June 30, 2011 for Governmental Activities and Business­type
Activities was $481,906 and $24,206 respectively, and total depreciation expense for
Governmental Activities and Business-type Activities for the fiscal year 2011 was $70,378 and
$2,116 respectively, and prior depreciation on assets deleted in fiscal year 2011 was $33,349 for
Governmental Activities and none for Business-type Activities, resulting in total Investment in
Capital Assets at June 30, 2011 for Governmental Activities and Business Type Activities of
$207,783 and $17,973. This is an increase of $49,386 and $1,319 for Governmental Activities
and Business-type Activities, respectively compared to June 30, 2010.
Additional information on the ROE's capital assets can be found in Note 7 on pages 48 - 49 of
this report.
16h
ST. CLAIR COUNTY REGIONAL OFFICE OF EDUCATION #50
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2011
Debt Administration. At June 30, 2011, the ROE had no long term debt.
Current Issues
The St. Clair County ROE is financially stable. The ROE has committed itself to financial
excellence for many years. In addition, the ROE's system of financial planning, budgeting and
internal financial controls is well regarded.
The ROE plans to continue its sound fiscal management to meet the challenges of the future and
insure that taxpayer dollars are spent properly and in accordance with its mission to provide
quality services to students, teachers, administrators, parents and community members.
The coming year will provide new challenges.
The System of Support grant, which serves schools and districts on the academic watch list in
sixteen counties, will continue to be a major focus of our efforts. Both the number of schools
and the complexity of the problem are projected to increase. However, current funding is
expected to be adequate in FY 2012.
The State's fiscal problems, which negatively impact cash flow for state-funded projects, are
expected to continue and increase. To reduce our exposure to this problem, the ROE has
eliminated most State funded programs which do not directly impact students. We will continue
to monitor the State's fiscal problems and plan for contingencies.
The ROE expects to meet these challenges effectively.
CONTACTING THE ROE'S FINANCIAL MANAGEMENT
If you have questions about this report, contact the Comptroller's Office of the St. Clair County
Regional Office of Education, 1000 South Illinois Street, Belleville, IL 62220 or by phone (618)
825-3935.
16i
BASIC FINANCIAL STATEMENTS
ST CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF NET ASSETS
JUNE 30, 2011
Primary Government
Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets:
Cash and cash equivalents $ 1,945,812 $ 280,856 $ 2,226,668
Accounts receivable 5,368 990 6,358
Due from (to) other funds (15,237) 15,237
Due from other governments:
Local 13,463 3,510 16,973
State 73,912 73,912
Federal 70,607 70,607
Total Current Assets 2,093,925 300,593 2,394,518
Noncurrent Assets:
Capital assets, net of depreciation 207,783 17,973 225,756
TOTAL ASSETS 2,301,708 318,566 2,620,274
LIABILITIES
Current Liabilities:
Accounts payable 101,480 925 102,405
Salary and benefits payable 147,881 3,187 151,068
Unearned revenue 342,441 342,441
Due to other governments:
Local 57,462 57,462
State 5,257 5,257
Federal 988 988
Total Current Liabiliites 655,509 4,112 659,621
TOTAL LIABILITIES 655,509 4,112 659,621
NET ASSETS
Invested in capital assets 207,783 17,973 225,756
Restricted for educational purposes 205,317 205,317
Unrestricted 1,233,099 296,481 1,529,580
TOTAL NET ASSETS $ 1,646,199 $ 314,454 $ 1,960,653
The notes to the financial statements are an integral part of this statement.
17
ST CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Program Revenues
Net (Expense) Revenue and
Changes in Net Assets
$ 2,866,727 $ - $ 2,442,618 $ (424,109) $ - $ (424,109)
1,378,440 - 1,224,178 (154,262) - (154,262)
555,523 - 514,710 (40,813) - (40,813)
27,328 - - (27,328) - (27,328)
70,378 - - (70,378) - (70,378)
119,764 119,764 - 119,764
71,721 - 43,224 (28,497) - (28,497)
356,200 - - (356,200) - (356,200)
306,127 - - (306,127) - (306,127)
5,632,444 - 4,344,494 (1,287,950) - (1,287,950)
75,483 54,001 - - (21,482) (21,482)
75,483 54,001 - - (21,482) (21,482)
$ 5,707,927 $ 54,001 $ 4,344,494 (1,287,950) (21,482) (1,309,432)
GENERAL REVENUES:
Local sources 376,280 - 376,280
On-behalf payments - Local 306,127 - 306,127
State sources 338,449 - 338,449
On-behalf payments - State 356,200 - 356,200
Interest 7,601 1,295 8,896
Total General Revenues 1,384,657 1,295 1,385,952
CHANGE IN NET ASSETS 96,707 (20,187) 76,520
NET ASSETS - BEGINNING 1,549,492 334,641 1,884,133
NET ASSETS - ENDING $ 1,646,199 $ 314,454 $ 1,960,653
FUNCTIONSIPROGRAMS
Primary Government:
Governmental Activities:
Instructional services:
Salaries and benefits
Purchased services
Supplies and materials
Other objects
Depreciation
Capital outlay
Payments to other governments
Administrative:
On-behalf payments - State
On-behalf payments - Local
Total Governmental Activities
Business-Type Activities:
Registration/Testing fee
Total Business-Type Activities
TOTAL PRIMARY GOVERNMENT
Expenses
Operating
Charges for Grants and
Services Contributions
Primary Government
Governmental Business-Type
Activities Activities Total
The notes to the financial statements are an integral part ofthis statement.
18
ST CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2011
Other Total
General Education Nonmajor Governmental
Fund Fund Funds Eliminations Funds
ASSETS
Cash and cash equivalents $1,247,359 $ 492,333 $ 206,120 $ - $ 1,945,812
Accounts receivable 25 4,500 843 - 5,368
Due from other funds 189,969 - - (189,969)
Due from other governments:
Local 300 13,163 - - 13,463
State 24,416 49,496 - - 73,912
Federal - 70,607 - - 70,607
TOTAL ASSETS $1,462,069 $ 630,099 $ 206,963 $ (189,969) $ 2,109,162
LIABILITIES
Accounts payable $ 39,940 $ 61,040 $ 500 $ - $ 101,480
Salary and benefits payable 49,010 97,725 1,146 - 147,881
Due to other funds 139,755 65,451 - (189,969) 15,237
Unearned revenue - 342,441 - - 342,441
Due to other governments:
Local 265 57,197 - - 57,462
State - 5,257 - - 5,257
Federal - 988 - - 988
TOTAL LIABILITIES 228,970 630,099 1,646 (189,969) 670,746
FUND BALANCES
Restricted - - 205,317 - 205,317
Assigned 1,100,210 - - - 1,100,210
Unassigned 132,889 - - - 132,889
Total Fund Balance 1,233,099 - 205,317 - 1,438,416
TOTAL LIABILITIES AND
FUND BALANCE $1,462,069 $ 630,099 $ 206,963 $ (189,969) $ 2,109,162
The notes to the financial statements are an integral part of this statement.
19
ST CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
JUNE 30, 2011
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement ofNet
Assets are different because:
Capital assets used in governmental activities that were not
financial resources and therefore, were not reported in the funds.
NET ASSETS OF GOVERNMENTAL ACTIVITIES
The notes to the financial statements are an integral part of this statement.
20
$ 1,438,416
207,783
$ 1,646,199
ST CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Other Total
General Education Nonmajor Governmental
Fund Fund Funds Eliminations Funds
REVENUES
Local sources $ 31,658 $ 219,131 $ 125,491 $ - $ 376,280
Local sources-payments made on behalfof region 306,127 - - - 306,127
State sources 660,135 478,661 1,873 - 1,140,669
State sources - on-behalf payments 356,200 - - - 356,200
Federal sources 15,201 3,764,519 - - 3,779,720
Total Revenues 1,369,321 4,462,311 127,364 - 5,958,996
EXPENDITURES
Instructional services:
Salaries and benefits 398,893 2,437,936 29,898 - 2,866,727
Purchased services 121,847 1,236,022 20,571 - 1,378,440
Supplies and materials 29,058 516,864 9,601 - 555,523
Other objects 540 - 26,788 - 27,328
Payments to other governments 28,465 43,256 - - 71,721
On-behalf payments 662,327 - - - 662,327
Capital outlay 2,599 117,165 - - 119,764
Total Expenditures 1,243,729 4,351,243 86,858 - 5,681,830
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 125,592 111,068 40,506 - 277,166
OTHER FINANCING SOURCES (USES)
Transfers in 32,259 - - (32,259)
Transfers out (27) (32,232) - 32,259
Interest 6,183 756 662 - 7,601
Total Other Financing Sources (Uses) 38,415 (31,476) 662 - 7,601
NET CHANGE IN FUND BALANCE 164,007 79,592 41,168 - 284,767
FUND BALANCE (DEFICIT) - BEGINNING, RESTATED 1,069,092 (79,592) 164,149 - 1,153,649
(See note 13)
FUND BALANCE - ENDING $1,233,099 $ - $ 205,317 $ - $ 1,438,416
The notes to the financial statements are an integral part of this statement.
21
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
NET CHANGE IN FUND BALANCE - GOVERNMENTAL FUNDS $ 284,767
Amounts reported for governmental activities in the Statement of Activities are
different because:
$ 119,764
(70,378)
Governmental funds report capital outlays as expenditures. However, in
the Statement of Activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense.
Capital outlay
Depreciation expense 49,386
(237,446)
(17,858)
(219,588)
$
Revenues reported in the Statement of Activities that did not provide current
financial resources in the prior year, and were reported in the current year funds.
Deferred revenue
Local sources
State sources
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 96,707
The notes to the financial statements are an integral part of this statement.
22
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF NET ASSETS
PROPRIETARY FUND
JUNE 30, 2011
Business-Type
Activities ­Enterprise
Fund
Local
Workshops Total
$ 280,856 $ 280,856
990 990
15,237 15,237
3,510 3,510
300,593 300,593
17,973 17,973
TOTAL ASSETS 318,566 318,566
Noncurrent Assets:
Capital assets, net of depreciation
ASSETS
Current Assets:
Cash and cash equivalents
Accounts receivable
Due from other funds
Due from other governments:
Local
Total Current Assets
LIABILITIES
Current Liabilities
Accounts payable
Salary and benefits payable
TOTAL LIABILITIES
925
3,187
4,112
925
3,187
4,112
314,454
17,973
296,481
314,454 $ =======
17,973
296,481
$
NET ASSETS
Invested in capital assets
Unrestricted
TOTAL NET ASSETS
The notes to the financial statements are an integral part of this statement.
23
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2011
Business-Type
Activities -
Enterprise Fund
Local
Workshops Total
OPERATING REVENUES
Registration & tech fees $ 54,001 $ 54,001
Total Operating Revenues 54,001 54,001
OPERATING EXPENSES
Salaries and benefits 56,927 56,927
Purchased services 14,226 14,226
Supplies and materials 2,214 2,214
Depreciation 2,116 2,116
Total Operating Expenses 75,483 75,483
OPERATING INCOME (LOSS) (21,482) (21,482)
NONOPERATING REVENUE
Interest 1,295 1,295
Total Nonoperating Revenue 1,295 1,295
CHANGE IN NET ASSETS (20,187) (20,187)
TOTAL NET ASSETS - BEGINNING 334,641 334,641
TOTAL NET ASSETS - ENDING $ 314,454 $ 314,454
The notes to the financial statements are an integral part of this statement.
24
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2011
Business-Type
Activities ­Enterprise
Fund
Local
Workshops Totals
Cash Flows from Operating Activities:
Receipts from customers
Payments to suppliers and providers of goods
and services
Payments to employees
Net Cash Used for Operating Activities
Cash Flows from Noncapital Financing Activities:
Cash payments for interfund loans
Net Cash Provided by Noncapital Financing Activities
Cash Flows from Capital and Related Financing Activities:
Acquisition of capital assets
Net Cash Used for Capital and Related Financing Activities
Cash Flows from Investing Activities:
Interest
Net Cash Provided by Investing Activities
$ 49,771
(16,122)
(58,248)
(24,599)
124,777
124,777
(3,435)
(3,435)
1,295
1,295
$ 49,771
(16,122)
(58,248)
(24,599)
124,777
124,777
(3,435)
(3,435)
1,295
1,295
Net Increase in Cash
Cash and Cash Equivalents - Beginning
Cash and Cash Equivalents - Ending $
98,038
182,818
280,856
98,038
182,818
$ 280,856
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:
Operating income (loss)
Adjustments to Reconcile Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
(Increase) Decrease in Accounts receivable
Depreciation
(Increase) Decrease in Due from other governments
Increase (Decrease) in Accounts payable
Increase (Decrease) in Salary and benefits payable
Net Cash Used for Operating Activities
$
$
(21,482)
(975)
2,116
(3,255)
318
(1,321)
(24,599)
$
$
(21,482)
(975)
2,116
(3,255)
318
(1,321)
(24,599)
The notes to the financial statements are an integral part of this statement.
25
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUND
JUNE 30, 2011
Agency
Fund
ASSETS
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
Accounts payable
TOTAL LIABILITIES
$
$
$
$
125
125
125
125
The notes to the financial statements are an integral part of this statement.
26
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The St. Clair County Regional Office of Education #50 was formed under the provisions of the State of
Illinois, Illinois State Board of Education.
In 2011, the Regional Office of Education #50 implemented Governmental Accounting Standards Board
(GASB) Statement No.54, Fund Balance Reporting and Governmental Fund Type Definitions, GASB
Statement No. 59, Financial Instruments Omnibus, and GASB Statement No. 62, Codification of
Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. The Regional Office of Education #50 implemented these standards during the current
year; however, GASB Statements No. 59 and 62 had no impact on the financial statements. The
implementation of GASB Statement No. 54 changed fund balance reporting for governmental funds by
adding some additional fund balance classifications, clarifying governmental fund type definitions, and
providing some additional disclosures on how fund balance constraints are imposed and may be
modified or eliminated.
A. DATE OF MANAGEMENT'S REVIEW
St. Clair County Regional Office of Education #50 has evaluated subsequent events through December
28, 2011 the date when the financial statements were available to be issued.
B. FINANCIAL REPORTING ENTITY
The Regional Superintendent is charged with responsibility for township fund lands; registration of the
names of applicants for scholarships to state controlled universities; examinations and related duties;
visitation of public schools; direction of teachers and school officers; to serve as the official advisor and
assistant of school officers and teachers; to conduct teachers institutes as well as to aid and encourage
the formation of other teachers meetings and assist in their management; evaluate the schools in the
region; examine evidence of indebtedness; file and keep the returns of elections required to be returned
to the Regional Superintendent's office; and file and keep the reports and statements returned by school
treasurers and trustees.
The Regional Superintendent is also charged with the responsibilities of conducting a special census,
when required; providing notice of money distributed to treasurers, board presidents, clerks, and
secretaries of the school districts on or before each September 30; maintenance of a map and numbering
of the Regional Office of Education #50's districts; providing township treasurers with a list of district
treasurers; to inspect and approve building plans which comply with State law; to perform and report on
annual building inspections; investigate bus drivers for valid bus driver permits and take related action
as may be required; to maintain a list of unfilled teaching positions and to carry out other related duties
required or permitted by law.
27
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. FINANCIAL REPORTING ENTITY (Concluded)
The Regional Superintendent is responsible for inspection and approval or rejection of school treasurers'
bonds. The Regional Superintendent is also required to provide the State Board of Education with an
affidavit showing that the treasurers of school districts under his control are properly bonded.
The Regional Superintendent is also responsible for apportionment and payment of funds received from
the State for the districts in the Regional Office of Education #50, or see that no payments are made
unless the treasurer has filed or renewed appropriate bond and that the district has certified publication
of the annual financial report. The Regional Superintendent is required to provide opinions and advice
related to controversies under school law.
For the period ended June 30, 2011, the Regional Office of Education #50 applied for, received, and
administered numerous State and federal programs and grants in assistance and support of the
educational activities of the school districts in Regional Office of Education #50. Such activities are
reported as a single major special revenue fund (Education Fund).
C. SCOPE OF THE REPORTING ENTITY
The Regional Office of Education #50's reporting entity includes all related organizations for which they
exercise oversight responsibility.
The Regional Office of Education #50 has developed criteria to determine whether outside agencies with
activities which benefit the citizens of the Regional Office of Education #50, including districts or joint
agreements which serve pupils from numerous regions, should be included in its financial reporting
entity. The criteria include, but are not limited to, whether the Regional Office of Education #50
exercises oversight responsibility (which includes financial interdependency, selection of governing
authority, designation of management, ability to significantly influence operations, and accountability for
fiscal matters), scope of public service, and special financing relationships.
The districts and joint agreements have been determined not to be a part of the reporting entity after
applying the manifesting of oversight, scope of public service, and special financing relationships criteria
and are therefore excluded from the accompanying financial statements because the Regional Office of
Education #50 does not control the assets, operations, or management of the districts or joint
agreements. In addition, the Regional Office of Education #50 is not aware of any entity, which would
exercise such oversight as to result in the Regional Office of Education #50 being considered a
component unit ofthe entity.
28
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Statement of Net Assets and the Statement of Activities are government-wide financial statements.
They report information on all of the Regional Office of Education #50's activities with most of the
interfund activities removed.
Governmental activities include programs supported primarily by State and federal grants and other
intergovernmental revenues. The Regional Office of Education #50 has one business-type activity that
relies on fees and charges for support.
The Regional Office of Education #50's government-wide financial statements include a Statement of
Net Assets and a Statement of Activities. These statements present summaries of governmental and
business-type activities for the Regional Office of Education #50 accompanied by a total column. These
statements are presented on an "economic resources" measurement focus as prescribed by GASB
Statement No. 34. All of the Regional Office of Education #50's assets and liabilities, including capital
assets, are included in the accompanying Statement of Net Assets. The Statement of Activities
demonstrates the degree to which the direct expenses of a given function are offset by program revenues.
Direct expenses are those that are clearly identifiable with a specific function. Program revenues include
1) charges for services, and 2) grants and contributions that are restricted to meeting operational or
capital requirements of a particular function.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds are reported as separate columns in the fund financial statements.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, such as, payables, receivables and transfers. Interfund activities between governmental funds
and between governmental funds and proprietary funds appear as due to/due from on the governmental
fund Balance Sheet and proprietary fund Statement of Net Assets and as other resources and other uses
on the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances and on
the proprietary fund Statement of Revenues, Expenses and Changes in Fund Net Assets. All interfund
transactions between governmental funds and between governmental funds and internal service funds are
eliminated on the government-wide financial statements. Interfund activities between governmental
funds and business-type funds remain as due to/due from on the government-wide financial statements.
All internal balances in the Statement of Net Assets have been eliminated except those representing
balances between the governmental activities and the business-type activities. In the Statement of
Activities, internal service fund transactions have been eliminated; however, those transactions between
governmental and business-type activities have not been eliminated. The purpose of interfund
borrowing and permanent transfers is to cover temporary or permanent short falls in cash flow within
grant programs and funds.
29
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. PROPRIETARY FUND FINANCIAL STATEMENTS
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary
fund and nonmajor funds aggregated.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual
basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included
on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Fund Net Assets
present increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of
accounting, revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses
are those expenses that are essential to the primary operations of the fund. All other expenses are
reported as non-operating expenses.
F. GOVERNMENTAL FUND FINANCIAL STATEMENTS
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and nonmajor funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund
balances and changes in fund balances as presented in these statements to the net assets and changes in
net assets presented in the government-wide financial statements.
The governmental fund financial statements have been prepared, in accordance with generally accepted
accounting principles, on the modified accrual basis. Under modified accrual basis of accounting,
revenues are recorded when susceptible to accrual i.e., both measurable and available. Available means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current
period, typically 60 days. Expenditures are recognized in the accounting period in which the fund
liability is incurred, if measurable, except expenditures for prepaid expenses and other long-term
obligations, which are recognized when paid. Revenue received after the Regional Office's availability
period are reported as deferred revenue in the fund statements and are reported as current revenue in the
Statement of Activities.
G. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows.
30
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (Concluded)
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
grantor have been met. The governmental funds financial statements focus on the measurement of
spending or "financial flow" and the determination of changes in financial position, rather than upon net
income determination. This means that only current assets and current liabilities are generally included
on their balance sheets.
Their reported fund balance (net current assets) is considered a measure of "available spendable
resources." Governmental fund operating statements present increases (revenues and other financing
sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable resources" during a period.
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual
requirements of the numerous individual programs are used as guidance. There are, however, essentially
two types of these revenues. In one, monies must be expended on the specific purpose or project before
any amounts will be paid to the Regional Office of Education #50; therefore, revenues are recognized
based upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of
expenditure and are usually recoverable only for failure to comply with prescribed compliance
requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible
to accrual criteria are met.
Under the terms of grant agreements, St. Clair County Regional Office of Education #50 funds certain
programs by a combination of specific cost-reimbursement grants and general revenues. Thus, when
program expenses are incurred, there are both restricted and unrestricted funding resources available to
finance the program. It is the St. Clair County Regional Office of Education #50's policy to first apply
restricted funds, then unrestricted. For unrestricted funds, committed funds are used first, then assigned
funds, then unassigned if any.
H. FUND ACCOUNTING
The Regional Office of Education #50 uses funds to maintain its financial records during the year. A
fund is defined as a fiscal and accounting entity with a self-balancing set of accounts. The Regional
Office of Education #50 uses governmental, proprietary, and fiduciary funds.
31
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS
Governmental funds are those through which most governmental functions typically are reported.
Governmental funds reporting focuses on the sources, uses and balances of current financial resources.
Expendable assets are assigned to the various governmental funds according to the purpose for which
they mayor must be used. Current liabilities are assigned to the fund from which they will be paid. The
difference between governmental fund assets and liabilities is reported as a fund balance.
As prescribed by GASB Statement No. 34, governmental fund reporting focuses on the major funds,
rather than on the fund type. There is a two-step process for determining if a fund should be reported as
a major fund: 1) total assets, liabilities, revenues, or expenditures/expenses (excluding extraordinary
items) of an individual fund are at least 10% of the corresponding total for the fund type, and 2) total
assets, liabilities, revenues, or expenditures/expenses (excluding extraordinary items) of an individual
fund are at least 5% of the corresponding total for the total of all governmental and proprietary funds
combined. Funds that do not meet the major fund determination requirements are reported in aggregate
as nonmajor funds. The Regional Office of Education #50 has presented all major funds that met the
above qualifications.
The Regional Office of Education #50 reports the following major governmental funds:
General Fund - The General Fund is the general operating fund of the Regional Office of
Education #50. It is used to account for the expenditures, which benefit all school districts in the
region except those required to be accounted for in other funds. General Fund includes the
following:
Educational Service Region (ESR) General Operation Account - This program is used to
account for local monies received for, and payment of, expenditures in connection
with general administration activities.
Payroll Clearing Fund - This program is used to account for funds received and disbursed
by the Regional Superintendent for payroll costs.
Worker Compensation Escrow Fund - This program is used to account for funds received
for, and payments of, worker compensation insurance policy premiums.
Young Authors Conference - This program is used to account for monies received for,
and payment of, expenditures for the annual Young Authors Conference.
National School Breakfast and Lunch (NSLP) - This program is used to account for
State and federal grant monies received for, and payment of, expenditures to
provide breakfast and lunch to the Safe School students.
32
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
General State Aid - Sec 18-8 - This program is used to account for grant monies received
for, and payment of, expenditures related to any educational purposes consistent
with State and local requirements subject to applicable federal requirements.
Regional Safe Schools - This program provides funding for an alternative school
program for disruptive youth in grades 6-9 whom have been removed from the
regular school setting due to continuous disruptions in the classroom.
School Service Account - This program is used to account for interest accrued in the no­longer
utilized Distributive fund and payment of staff development expenditures
requested by the entity that earned the interest.
Building Fund - This program is used to account for local monies received for, and
payment of, expenditures necessary for the operation ofthe building.
Major Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of
specific revenue sources (other than fiduciary and major capital projects) that are legally
restricted to expenditures for specified purposes.
Major special revenue funds include the following:
Education Fund - This fund is used to account for varIOUS grant and education
enhancement programs as follows:
McKinney-Vento Education for Homeless Children & Youth - This program uses
federal funds to provide training and technical assistance to school districts in 16
counties to assist school officials in understanding and complying with the
McKinney-Vento Act.
Career and Technical Education Improvement - This program is used to account for
grant monies received for, and payment of, expenditures for fiscal services
provided to the St. Clair County/SWIC Career and Technical Education System.
Title I School Improvement & Accountability - This program uses federal funding to
provide assistance to those schools/school districts that do not meet Adequate
Yearly Progress (AYP) as defined by the No Child Left Behind Act.
33
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
Title II Teacher Quality - Leadership Grant - This program is used to account for
federal grant monies received for, and payment of, expenditures related to
providing professional development services to all schools that failed to make
adequate yearly progress on Illinois Standards Achievement Test scores.
Truants Alternative/Optional Education - This program provides funding for services
designed to prevent students from dropping out of school.
ARRA Title I School Improvement & Accountability - This program is used to
account for grant monies received for, and payment of, expenditures related to
providing school improvement support and assistance to schools in year one and
two of improvement status.
Adult Education State Basic - This program is used to account for grant monies
received for, and payment of, expenditures related to education and literacy for
adults, as funded by basic State Grant.
Adult Education State Performance - This program is used to account for grant
monies received for, and payment of, expenditures related to education and
literacy for adults, as funded by performance monies.
Adult Education Public Assistance - This program is used to account for grant
monies received for, and payment of, expenditures related to education and
literacy for adults who are Public Aid recipients.
Math and Science Sprouting Stems - This program is used to account for federal
grant monies received for, and payment of, expenditures to improve the content
knowledge and pedagogical skills of kindergarten through third grade teachers in
mathematics and science.
Math and Science Green Stems - This program is used to account for federal grant
monies received for, and payment of, expenditures to improve the content
knowledge and pedagogical skills of high school teachers in mathematics and
science.
Title I School Dropout Prevention Project - This program is used to account for grant
monies received for, and payment of, expenditures related to increasing high
school graduation rates, decreasing dropouts, improving attendance, and assisting
students in credit recovery in order to earn credits to graduate.
34
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
Title I Reading First - This program is used to account for federal grant monies
received for, and payment of, expenditures related to providing a summer literacy
program.
Mental Health Parent Resource - This program is used to account for grant monies
received for, and payment of, expenditures related to support truancy intervention
and prevention through case coordination, resource linkage, and parent training.
Beginning Teacher Induction and Mentoring - This program is used to account for
grant monies received for, and payment of, expenditures to assist school districts
in the establishment of "Induction and Mentoring" activities that meet quality
standards and are available to beginning teachers.
ROE School Services - This program is used to account for grant monies received
for, and payment of, expenditures to assist schools in all areas of school
improvement.
Bilingual Education Downstate TPI - This program is used to account for grant
monies received for, and payment of, expenditures to teach children for whom
English is a second language.
Social Emotional Learning Standards - This program is used to account for grant
monies received for, and payment of, expenditures to provide schools with
professional development and technical assistance in the area of social emotional
learning standards.
Preschool for All - This program is used to account for grant monies received for, and
payment of, expenditures to house the Pre-School Accountability Liaison
employed by ROE #25.
DHS/Office of Rehabilitation Services Transition - This program is used to account
for federal and state grant monies received for, and payment of, expenditures for
services to transition high school seniors from school to work.
Principal Mentoring - This program provides support and mentoring to new School
District Principals.
35
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
Readiness and Emergency Management for Schools (REMS) - This program is used
to account for federal grant monies received for, and payment of, expenditures
related to improving and strengthening school emergency management plans.
ARRA Education Jobs - This program is used to account for grant monies received for,
and payment of, expenditures related to saving or creating education jobs.
Federal Special Education Preschool Discretionary - This fund is used to account for
federal grant monies received for, and payment of, expenditures related to services
provided to educators, parents, and providers working with children (birth to five)
with disabilities.
Teaching American History - 1 High School - This program is used to account for
federal grant monies received for, and payment of, expenditures related to
improving the content knowledge of high school American History teachers so
they can offer effective instruction in their classrooms.
Teaching American History - 2 Grades 4-6 - This program is used to account for
federal grant monies received for, and payment of, expenditures related to
improving the content knowledge of grades 4-6 American History teachers so they
can offer effective instruction in their classrooms.
Pan Flu Outreach Education - This program is used to account for grant monies
received for, and payment of, expenditures related to education outreach activities
regarding pandemic influenza that can become model programs for the State of
Illinois.
Gifted Education Pilot - This program is used to account for grant monies received
for, and payment of, expenditures related to increasing academic achievement of
gifted students.
Additionally, the Regional Office of Education #50 reports the following nonmajor fund types:
Institute Fund - This program accounts for teacher certificate registration, issuance and
evaluation fees for processing certificates, and expenses of meetings of a
professional nature. All funds generated remain restricted until expended only on
the aforementioned activities.
36
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Concluded)
General Education Development - This program accounts for the receipts and expenses
pertaining to the G.E.D./High School Equivalency program for high school
dropouts.
Bus Driver Training - This program accounts for State and local receipts and expenses as
a result oftraining school district bus drivers.
PROPRIETARY FUNDS
Proprietary funds are those in which revenues and expenses related to services provided to organizations
inside the Regional Office of Education #50 on a cost reimbursement basis are reported. The Regional
Office of Education #50 reports its Local Workshop Fund as a major proprietary fund. The Local
Workshop Fund is used to account for the workshop fees and fees for technology services of the
Regional Office of Education #50.
FIDUCIARY FUNDS
Agency Fund - Agency Fund is used to account for assets held by the Regional Office of Education #50
in a trustee capacity or as an agent for individuals, private organizations, or other governmental units.
This funds is custodial in nature (assets equal liabilities) and does not involve measurement of results of
operations. Agency Fund includes the following:
Employee Activity Fund - This program is used to account for funds raised by employees
and used by employees for various health and social activities.
1. GOVERNMENTAL FUND BALANCES
Fund balance is the difference between assets and liabilities in a Governmental Fund. The following
types of fund balances are presented in the Governmental Funds Balance Sheet and Governmental Funds
Combining Schedule of Accounts:
Nonspendable Fund Balance - the portion of a Governmental Fund's net assets that are not available to
be spent, either short term or long term, in either form or through legal restrictions. There are no
accounts presenting a nonspendable fund balance.
37
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
I. GOVERNMENTAL FUND BALANCES (Concluded)
Restricted Fund Balance - the portion of a Governmental Fund's net assets that are subject to external
enforceable legal restrictions. The following funds are restricted by Illinois Statute: Institute Fund,
General Education Development, and Bus Driver Training.
Committed Fund Balance - the portion of a Governmental Fund's net assets with self-imposed constraints
or limitations that have been placed at the highest level of decision making. There are no accounts
presenting a committed fund balance.
Assigned Fund Balance - the portion of a Governmental Fund's net assets that denote an intended use of
resources. The accounts presented with assigned fund balances are specified for a particular purpose by
the Regional Superintendent. The following fund balances are assigned: General State Aid 18-8, Young
Authors Conference, a portion of the School Service Account, National School Breakfast and Lunch and
Building Fund.
Unassigned Fund Balance - the portion of a Governmental Fund's net assets that are expendable
financial resources in a governmental fund that are not designated for a specific purpose. The following
fund balances are unassigned: ESR General Operation Account and a portion of the School Service
Account.
J. NET ASSETS
Equity is classified as net assets and displayed in three components:
Invested in capital assets - Consists of capital assets, net of accumulated depreciation.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or
"invested in capital assets."
K. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists of cash on deposit. The Regional Office of Education #50 considers
all liquid investments with a maturity ofthree months or less when purchased to be cash equivalents.
38
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. INVENTORY
Inventory is not recorded. The cost is recorded as an expenditure at the time individual inventory items
are purchased.
M. CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $500 or more and estimated useful lives of
greater than one year are reported at historical cost or estimated historical cost. Contributed assets are
reported at fair market value as of the date received. Additions, improvements and other capital outlays
that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-line basis
over the following estimated useful lives:
Deskjet printers/UPS
Computer, Laser printers, Fax machines
Cameras, Projectors, Camcorders, Copiers,
Televisions, PA systems
Software systems
Furniture and Typewriters
Refrigerators
N. COMPENSATED ABSENCES
3 years
4 years
5 years
6 years
8 years
10 years
Non-exempt, full-time employees earn vacation time according to their length of service: 10 days per
year for the first four years of service and 15 days per year starting with the fifth year of service.
Vacation time is prorated for employees working between 16 and 40 hours per week. Temporary
employees, non-exempt employees who work less than 16 hours per week, and exempt employees do not
earn vacation days. Vacation time must be used within the same project year in which it was earned and
unused vacation time at the end of a project year is forfeited. All projects in which salary expense is
incurred have a year-end consistent with the Regional Office of Education #50's year-end of June 30;
therefore, no liability is accrued. Employees receive up to 12 sick days annually and the unused portion
is accumulated and carried forward. Employee sick leave is recorded when paid. Upon termination,
employees do not receive any accumulated sick leave pay and, therefore, no liability is accrued.
O. ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
39
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)
P. BUDGET INFORMATION
The Regional Office of Education #50 acts as the administrative agent for certain grant programs that are
accounted for in the Education Fund. Certain programs have separate budgets and are required to report
to the Illinois State Board of Education, Illinois Community College Board, and Department of Human
Services; however, none of the annual budgets are required to be or have been legally adopted. Certain
programs within the General Fund and Special Revenue Fund do not have separate budgets. Comparisons of
budgeted and actual results are presented as supplemental information.
Budget to actual statements have been provided in supplementary schedules for the following funds:
McKinney-Vento Education for Homeless Children & Youth, Title I School Improvement and
Accountability, Truants Alternative/Optional Education, ARRA Title I School Improvement &
Accountability, Math and Science Sprouting Stems, Math and Science Green Stems, Title I School
Dropout Prevention Project, Title I - Reading First, Beginning Teacher Induction and Mentoting, ROE
School Services, Readiness and Emergency Management for Schools, Regional Safe Schools, Federal
Special Education Preschool Discretionary, Teaching American History - 1 High School, Teaching
American History - 2 Grades 4 - 6, and Gifted Education Pilot.
NOTE 2 - CASH AND CASH EQUIVALENTS
The Regional Office of Education #50 does not have a formal investment policy. The Regional Office
of Education #50 is allowed to invest in securities as authorized by 30 ILCS-235/2 and 6 and 105 ILCS­5/
8-7.
A. DEPOSITS
At June 30, 2011, the carrying amount of the Regional Office of Education #50's Government-wide and
Agency fund deposits were $2,226,668 and $125, respectively, and the bank balances were $2,311,184
and $125, respectively. Of the total bank balances as of June 30, 2011, $250,000 was secured by federal
depository insurance and $1,986,630 was collateralized by securities pledged by the Regional Office of
Education #50's financial institution in the name ofthe Regional Office.
CUSTODIAL CREDIT RISK
Custodial credit risk for deposits with financial institutions is the risk that, in the event of bank
failure, the ROE's deposits may not be returned to it. To guard against custodial credit risk for
deposits with financial institutions, the St. Clair County Regional Office of Education #50's
investment policy requires that deposits with financial institutions in excess of FDIC limits be
secured by some form of collateral, by a written agreement, and held at an independent, third-party
institution in the name of the St. Clair County Regional Office of Education #50.
40
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 2 - CASH AND CASH EQUIVALENTS (Concluded)
B. INVESTMENTS
The Regional Office of Education #50's, only investments are internally pooled in the Illinois Funds
Money Market Fund. As of June 30, 2011, the Regional Office of Education #50 had investments
with carrying and fair value of $74,679 invested in the Illinois Funds Money Market Fund.
CREDIT RISK
At June 30, 2011, the Illinois Funds Money Market Fund had a Standard and Poor's AAAm rating.
The pool is audited annually by an outside independent auditor and copies of the report are
distributed to participants. Although not subject to direct regulatory oversight, the fund is
administered by the Illinois State Treasurer in accordance with the provision of the Illinois Public
Funds Investment Act, 30 ILCS 235. All investments are fully collateralized.
INTEREST RATE RISK
The Illinois Funds Money Market Fund, created by the Illinois General Assembly, enables custodians
of public funds an investment option with a competitive rate of return on fully collateralized
investments and immediate access to the funds. The investment policy of the Illinois Funds Money
Market Funds states that, unless authorized specifically by the Treasurer, a minimum of 750/0 of its
investments shall have less than one-year maturity and no investment shall exceed two years
maturity.
CONCENTRATION OF CREDIT RISK
Unless specifically authorized by the Treasurer, the Illinois Funds Money Market Fund's investment
policy limits investment categories to not exceed 25% of the portfolio with the exception of cash
equivalents and U.S. Treasury securities. Further certificates of deposit cannot exceed 10% of any
single financial institution's total deposits.
NOTE 3 - DEFINED BENEFIT PENSION PLAN
Plan Description. The St. Clair County Regional Office of Education #50's defined benefit pension
plan for Regular employees provides retirement and disability benefits, post retirement increases, and
death benefits to plan members and beneficiaries. The St. Clair County Regional Office of Education
#50's plan is affiliated with the Illinois Municipal Retirement Fund (IMRF), an agent multiple-employer
plan. Benefit provisions are established by statute and may only be changed by the General Assembly of
the State of Illinois. IMRF issues a publicly available financial report that includes financial statements
and required supplementary information. That report may be obtained on line at www.imrf.org.
41
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 3 - DEFINED BENEFIT PENSION PLAN (Continued)
Funding Policy. As set by statute, the St. Clair Regional Office of Education #50's Regular plan
members are required to contribute 4.50 percent of their annual covered salary. The statute requires
employers to contribute the amount necessary, in addition to member contributions, to finance the
retirement coverage of its own employees. The employer contribution rate for the calendar year 2010
was 8.48 percent of annual covered payroll. The employer annual required contribution rate for calendar
year 2010 was 11.62 percent.
The St. Clair Regional Office of Education #50 also contributes for disability benefits, death benefits and
supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for
disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement
benefits rate is set by statute.
Annual Pension Cost. For calendar year ending December 31, 2010, the Regional Office of Education
#50's annual pension cost for the Regular plan was $84,004. Its required contribution for calendar year
2010 was $115,109.
Annual Pension
Cost (APC)
$115,109
54,652
77,619
Actuarial
Valuation
Date
12/31/10
12/31/09
12/31/08
THREE YEAR TREND INFORMATION
Percentage
ofAPC
Contribution
73%
100%
100%
Net Pension
Obligation
$0
o
o
The required contribution for 2010 was determined as part of the December 31, 2008 actuarial valuation
using the entry age actuarial cost method. The actuarial assumptions at December 31, 2008, included (a)
7.50 percent investment rate of return (net of administrative and direct investment expenses), (b)
projected salary increases of 4.00% a year, attributable to inflation, (c) additional projected salary
increases ranging from 0.4% to 10.0% per year depending on age and service, attributable to
seniority/merit, and (d) post-retirement benefit increases of 3% annually. The actuarial value of the
Regional Office of Education #50's Regular plan assets was determined using techniques that spread the
effects of short-term volatility in the market value of investments over a five-year period with a 20%
corridor between the actuarial and market value of assets. The St. Clair County Regional Office of
Education #50's Regular plan's unfunded actuarial accrued liability at December 31, 2008 is being
amortized as a level percentage of projected payroll on an open 10 year basis.
Funded Status and Funding Progress. As of December 31, 2010, the most recent actuarial valuation
date, the Regular plan was 89.72 percent funded. The actuarial accrued liability for benefits was
$2,400,218 and the actuarial value of assets was $2,153,580, resulting in an underfunded actuarial
accrued liability (UAAL) of $246,638. The covered payroll (annual payroll of active employees covered
by the plan) was $990,611 and the ratio of the UAAL to the covered payroll was 25 percent.
42
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 3 - DEFINED BENEFIT PENSION PLAN(Concluded)
The schedule of funding progress, presented as RSI following the notes to the financial statements,
present multiyear trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
The St. Clair County Regional Office of Education #50 participates in the Teachers' Retirement System
of the State of Illinois (TRS). TRS is a cost-sharing multi-employer defined benefit pension plan that
was created by the Illinois legislature for the benefit of Illinois public school teachers employed outside
the city of Chicago.
The Illinois Pension Code outlines the benefit provisions of TRS, and amendments to the plan can be
made only by legislative action with the Governor's approval. The State of Illinois, maintains primary
responsibility for funding of the plan, but contributions from participating employers and members are
also required. The TRS Board of Trustees is responsible for the system's administration.
TRS members include all active non-annuitants who are employed by a TRS-covered employer to
provide services for which teacher certification is required. The active member contribution rate for the
year ended June 30, 2011, was 9.4 percent of creditable earnings. The same contribution rate applies to
members whose first contributing service is on or after Jan. 1, 2011, the effective date of the benefit
changes contained in Public Act 96-0889. These contributions, which may be paid on behalf of
employees by the employer, are submitted to TRS by the employer. The active member contribution rate
was also 9.40/0 for the years ended June 30,2010 and 2009.
The State of Illinois makes contributions directly to TRS on behalf of the Regional Office of Education
#50's TRS-covered employees.
• On behalf contributions. The State of Illinois makes employer pension contributions on behalf of
the Regional Office of Education #50. For the year ended June 30, 2011, State of Illinois
contributions were based on 23.10 percent of creditable earnings not paid from federal funds, and the
Regional Office of Education #50 recognized revenue and expenditures of $119,685 in pension
contributions that the State of Illinois paid directly to TRS. For the years ended June 30, 2010 and
2009, the State of Illinois contribution rates as percentages of creditable earnings not paid from
federal funds were 23.38 ($165,762) and 17.08 ($117,992) percent, respectively.
The Regional Office of Education #50 makes other types of employer contributions directly to TRS.
• 2.2 formula contributions. Employers contribute 0.58 percent of total creditable earnings for the
2.2 formula change. This rate is specified by statute. Contributions for the year ended June 30, 2011
were $5,655. Contributions for the years ending June 30, 2010, and June 30, 2009, were $5,131 and
$6,095, respectively.
43
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Continued)
• Federal and special trust fund contributions. When TRS members are paid from federal and
special trust funds administered by the Regional Office of Education #50, there is a statutory
requirement for the Regional Office of Education #50 to pay an employer pension contribution from
those funds. Under a policy adopted by the TRS Board of Trustees that was first effective in the
fiscal year ended June 30, 2006, employer contributions for employees paid from federal and special
trust funds will be the same as the state contribution rate to TRS.
For the year ended June 30, 2011, the employer pension contribution was 23.10 percent of salaries
paid from federal and special trust funds. For the years ended June 30, 2010 and 2009, the employer
contribution was 23.38 and 17.08 percent of salaries paid from federal and special trust funds,
respectively. For the year ended June 30, 2011, salaries totaling $648,286 were paid from federal
and special trust funds that required employer contributions of $149,754. For the years ended June
30,2010 and June 30, 2009, required Regional Office of Education #50 contributions were $85,811
and $61,509, respectively.
• Early Retirement Option. The Regional Office of Education #50 is also required to make one-time
employer contributions to TRS for members retiring under the Early Retirement Option (ERO). The
payments vary depending on the age and salary of the member.
The maximum employer ERO contribution is 117.5 percent and applies when the member is age 55 at
retirement.
For the years ended June 30, 2011, 2010, and 2009, the Regional Office of Education #50 paid no
contributions to the ERO program.
• Salary increases over 6 percent and excess sick leave. If the Regional Office of Education #50
grants salary increases over 6 percent and those salaries are used to calculate a retiree's final average
salary, the Regional Office of Education #50 makes a contribution to TRS. The contribution will
cover the difference in actuarial cost of the benefit based on actual salary increases and the benefit
based on salary increase of up to 6 percent.
For the year ended June 30, 2011, the Regional Office of Education #50 paid no employer
contributions to TRS for employer contributions due on salary increases in excess of 6 percent. For
the years ended June 30, 2010 and June 30, 2009, the Regional Office of Education #50 paid no
employer contributions on salary increases in excess of 6 percent.
If the Regional Office of Education #50 grants sick leave days in excess of the normal annual
allotment and those days are used as TRS service credit, the Regional Office of Education #50 makes
a contribution to TRS. The contribution is based on the number of excess sick leave days used as
service credit, the highest salary used to calculate final average salary, and the TRS total normal cost
44
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Concluded)
rate (18.03 percent of salary during the year ended June 30,2011, as recertified pursuant to Public Act
96-1511). For the year ended June 30, 2011, the Regional Office of Education #50 paid no employer
contributions to TRS for sick leave days granted in the excess of the normal annual allotment. For the
years ended June 30, 2010 and June 30, 2009, the Regional Office of Education #50 paid no employer
contributions granted for sick leave days.
Further information on TRS TRS financial information, an explanation of TRS benefits, and descriptions
of member, employer and State funding requirements can be found in the TRS Comprehensive Annual
Financial Report for the year ended June 30, 2010. The report for the year ended June 30, 2011, is expected
to be available in late 2011.
The reports may be obtained by writing to the Teachers' Retirement System of the State of Illinois, PO Box
19253, 2815 West Washington Street, Springfield, Illinois 62794-9253. The most current report is also
available on the TRS Web site at http://trs.illinois.gov.
NOTE 5 - OTHER POST EMPLOYMENT BENEFITS
A. TEACHERS' HEALTH INSURANCE SECURITY FUND
The St. Clair County Regional Office of Education #50 participates in the Teacher Health Insurance Security
(THIS) Fund, a cost-sharing, multiple-employer defined benefit postemployment healthcare plan that was
established by the Illinois legislature for the benefit of Illinois public school teachers employed outside the
city of Chicago. The THIS Fund provides medical, prescription, and behavioral health benefits, but does not
provide vision, dental, or life insurance benefits to annuitants of the Teachers' Retirement System (TRS).
Annuitants may participate in the State administered participating provider option plan or choose from
several managed care options.
The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines the benefit provisions of THIS
Fund and amendments to the plan can be made only by legislative action with the Governor's approval. The
Illinois Department of Healthcare and Family Services (HFS) and the Illinois Department of Central
Management Services (CMS) administer the plan with the cooperation of TRS. The director of HFS
determines the rates and premiums for annuitants and dependent beneficiaries and establishes the cost­sharing
parameters. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active
contributors to the TRS who are not employees of the State make a contribution to THIS Fund.
The percentage of employer required contributions in the future will be determined by the director of
Healthcare and Family Services and will not exceed 105 percent of the percentage of salary actually required
to be paid in the previous fiscal year.
• On behalf contributions. The State of Illinois makes employer retiree health insurance
contributions on behalf of St. Clair County Regional Office of Education #50. State contributions are
intended to match contributions to THIS Fund from active members which were 0.88 percent of pay
during the year ended June 30, 2011. State of Illinois contributions were $8,580, and St. Clair County
Regional Office of Education #50 recognized revenue and expenditures of this amount during the year.
45
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 5 - OTHER POST EMPLOYMENT BENEFITS (Continued)
State contributions intended to match active member contributions during the year ended June 30, 2010
was 0.84 percent of pay. State contributions on behalf of the St. Clair County Regional Office of
Education #50 employees were $7,430.
Had the St. Clair County Regional Office of Education #50 recognized revenue and expenditures for
State contributions intended to match active member contributions during the year ended June 30, 2009
under the current standards, the contribution match would have been 0.84 percent of pay, or $8,828.
• Employer contributions to THIS Fund. The St. Clair County Regional Office of Education #50 also
makes contributions to THIS Fund. The employer THIS Fund contribution was 0.66 percent during the
year ended June 30, 2011 and 0.63 percent during the years ended June 30, 2010 and 2009. For the year
ended June 30, 2011, the St. Clair County Regional Office of Education #50 paid $6,435 to the THIS
Fund. For the years ended June 30, 2010 and June 30, 2009, the St. Clair County Regional Office of
Education #50 paid $5,573 and $8,828 to the THIS Fund, respectively, which was 100 percent of the
required contribution.
Further information on THIS Fund. The publicly available financial report of the THIS Fund may be
obtained by writing to the Department of Healthcare and Family Services, 201 S. Grand Ave., Springfield,
IL 62763-3838.
B. EGYPTIAN AREA SCHOOLS EMPLOYEE BENEFIT TRUST
Plan Description. The St. Clair County Regional Office of Education #50 contributes to the Egyptian Area
Schools Employee Benefit Trust (the "Trust"), a cost-sharing multiple-employer defined benefit health care
plan administered by the Board of Managers of the Trust. The Trust provides medical benefits to active and
retired employees of approximately 160 participating employers. The Trust issues a publicly available
financial report that includes financial statements and required supplementary information for the Trust. A
copy of the report may be obtained by writing to the Egyptian Area Schools Employee Benefit Trust, c/o
Meritain Health, 13 Executive Drive, Suite 19, Fairview Heights, IL 62208, or by calling Meritain Health at
(866) 588-2431, Option 3 x 6105. The report is also posted on the Trust's website at www.egtrust.org.
Funding Policy. The Trust Agreement establishing the Trust provides that contribution rates are established
and may be modified by the Board of Managers of the Trust. Contribution rates are normally adjusted as of
September 1 each year. As of June 30, 2011, participating employers were contractually required to
contribute at the following rates for active and retired employees and dependents.
Platinum Gold Silver Bronze
Plan Plan Plan Plan
Employee (Retiree) $536 $484 $418 $356
Employee + spouse $1,106 $998 $866 $732
Employee +child(ren) $1,068 $963 $835 $719
Family $1,191 $1,073 $932 $791
46
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 5 - OTHER POST EMPLOYMENT BENEFITS (Concluded)
Participating employers may require employees and/or retirees to pay some or all of the required
contributions to the employer, but the employer has the legal obligation to pay contributions to the Trust. St.
Clair County Regional Office of Education #50 requires retirees to pay 100% of the contribution for
coverage for retirees and their dependents.
The Board of Managers of the Trust sets the employer contribution rates each year based on an actuarial
valuation. The Trust's actuary has determined that as of June 30, 2011 the Trust had no Unfunded Actuarial
Accrued Liability for Other Post Employment Benefits (OPEB) and is not expected to have an Unfunded
Actuarial Accrued Liability as of June 30, 2009. That actuary has further determined that current
contribution rates exceed the Annual Required Contribution (ARC) determined in accordance with the
parameters of GASB Statement 45. The St. Clair County Regional Office of Education #50 contributions to
the Trust for the years ending June 30, 2011, June 30, 2010, and June 30, 2009, were $294,334, $298,466,
and $321,694, respectively, which equaled the contractually required contributions each year.
NOTE 6 - INTERFUND ACTIVITY
DUE TO/FROM OTHER FUNDS
Interfund due to/from other fund balances at June 30, 2011 consist of the following individual due to/from
other funds in the governmental fund Balance Sheet. The balances between governmental funds were
eliminated in the government-wide Statement of Net Assets. The balances between governmental and
business-type activities were not eliminated in the government-wide Statement ofNet Assets.
Fund
General Fund
Education Fund
Proprietary Fund
Totals
TRANSFERS
Due From
Other Funds
$ 189,969
15,237
$ 205.206
Due To
Other Funds
$ 139,755
65,451
$ 205,206
At the end of the fiscal year, the Regional Office of Education #50 transfers interest income associated with
the Education Funds to the ESR General Operation Account as partial reimbursement for expenditures paid
by the ESR General Operation Account through the year on behalf of the Education funds. The total interest
transferred from the Education Funds to the ESR General Operation Account for the year ended June 30,
2011 was $689. An additional $31,543 in local funds that was loaned to start up the DHS/Office of
Rehabilitation Services Transition program was transferred back to the ESR General Operations Accounts.
47
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 6 - INTERFUND ACTIVITY (Concluded)
General Fund
Education Fund
Transfer Out
$ 27
32,232
Transfer In
$ 32,259
Totals
NOTE 7 - CAPITAL ASSET ACTIVITY
$ 32,259 $ 32,259
In accordance with GASB Statement No. 34, the Regional Office of Education #50 has reported capital
assets in the government-wide Statement of Net Assets. Purchases are reported as capital outlay in the
governmental fund statements. Purchases of business-type activities are capitalized when purchased. The
following table provides a summary of changes in capital assets for the year ended June 30, 2011:
Governmental Activities
Balance
July 1, 2010
Balance
Additions Deletions June 30, 2011
$ 520,012 $ 119,764
83,262
$ 158,397 $ 49,386 $
====
Equipment
Furniture and Fixtures
Governmental Activities Total Assets
Less Accumulated Depreciation
Governmental Funds Investment
in Capital Assets, Net
603,274
444,877
119,764
70,378
$ 30,985
2,364
33,349
33,349
$ 608,791
80,898
689,689
481,906
$ 207,783
Business Type Activities
Equipment
Furniture and Fixtures
Business-type Activities Total Assets
Less Accumulated Depreciation
Investment in Capial Assets, Net
$ 15,412
23,332
38,744
22,090
$ 16,654
48
$ 3,435
3,435
2,116
$ 1,319
$
$
$
$
18,847
23,332
42,179
24,206
17,973
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 7 - CAPITAL ASSET ACTIVITY (Concluded)
Capital assets are depreciated using the straight-line method over the estimated useful lives of the assets.
Depreciation expense for the year ended June 30, 2011 of $70,378 and $2,116 was charged to
governmental activities and business-type activities, respectively, on the government-wide Statement of
Activities. Investment in capital assets is the component of net assets that reports capital assets net of
accumulated depreciation. The Regional Office's assets are composed offumiture and equipment.
NOTE 8 - RISK MANAGEMENT
The Regional Office of Education #50 is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The Regional Office of Education #50 has purchased commercial insurance to cover these risks. No
losses have been incurred in excess of the amounts covered by insurance over the past three years.
NOTE 9 - ON BEHALF PAYMENTS
St. Clair County provides the St. Clair County Regional Office of Education #50 with staff and pays
certain expenditures on behalf of the St. Clair County Regional Office of Education #50. The
expenditures paid on the St. Clair County Regional Office of Education #50's behalf for the year ended
June 30, 2011, were as follows:
Salaries and benefits
Purchased services
Total
$ 220,437
85,690
$ 306.127
The State of Illinois paid the following salaries on behalf of the Regional Office of Education #50:
Regional Superintendent Salary
Assistant Regional Superintendent Salary
Regional Superintendent Fringe Benefit
(Includes State paid insurance)
Assistant Regional Superintendent Fringe Benefit
(Includes State paid insurance)
Regional Superintendent TRS Pension Contribution
Assistant Regional Superintendent TRS Pension Contribution
TRS Pension contributions
THIS contributions
Total
49
$ 100,762
90,686
22,302
14,185
23,276
20,948
75,461
8,580
$ 356.200
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 9 - ON BEHALF PAYMENTS (Concluded)
Salary and benefit data for the Regional Superintendent and Assistant Regional Superintendent was
calculated based on data provided by the Illinois State Board of Education.
These amounts have been recorded in the accompanying financial statements as State and local revenue
and expenditures.
NOTE 10 - DUE TO/FROM OTHER GOVERNMENTS
The Regional Office of Education #50's General Fund, Education Fund, and Proprietary Fund have
funds due from/to various other governmental units which consist ofthe following:
Due From Other Governments:
General Fund
School Districts
Illinois State Board of Education
Education Fund
School Districts
Illinois State Board of Education
U.S. Department of Education
Proprietary Fund
School Districts
Total
Due To Other Governments:
Education Fund
Local Governments
Illinois State Board of Education
Federal Government
General Fund
Local Governments
Total
50
$ 300
24,416
13,163
49,496
70,607
3,510
$161.492
$ 57,197
5,257
988
265
$ 63,707
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 11 - OPERATING LEASE
The Regional Office of Education #50 entered into an operating lease for its Belleville office space. Rent
expense for the building for fiscal year 2011 totaled $112,000. Future minimum operating lease
commitments are as follows:
Year ending June 30, 2012 2012 $65.333
Rental payments of $9,333 per month are required through January 31, 2012. At that time the terms of
the lease may be renegotiated through 2032. St. Clair County provides the Regional Office of Education
#50 with rent subsidies under this agreement of $4,667 per month. This amount has been recorded as
rental expense and local revenue on the Statement of Activities. The lease may be cancelled by the
Regional Office of Education #50 upon 365 days written notification to the landlord, St. Clair County.
The Regional Office of Education #50 entered into an operating lease for space to operate educational
programs. Rent expense for the building for fiscal year 2010 totaled $51,714. Future minimum
operating lease commitments are as follows:
Year ending June 30,
2012
2013
Total
$ 51,000
51,000
$102.000
Monthly rental payments are required through June 30, 2013. Annual rent is $51,000 plus the published
annual Consumer Price Index increase. Rent for 2010 was increased by 1.4%, and it remained constant
in 2011. This amount has been recorded as an expense split between the Regional Safe School, General
State Aid 18-8, and Truants/Alternative Optional Education funds. The lease may be cancelled by the
Regional Office of Education #50 upon 365 days written notification to the landlord, St. Mary's Parish.
NOTE 12 - RECLASSIFICATION
The General State Aid 18-8 and Regional Safe Schools have been reclassified from the education fund to
the general fund in fiscal year 2011. The General State Aid 18-8 is not restricted and is used to fund
educational endeavors as the Regional Superintendent deems appropriate. General State Aid 18-8
primarily supports the Regional Safe School program for the current fund year. Because the unrestricted
funds from General State Aid 1-8 are the primary source of funding for the Regional Safe School, both
funds have been reclassified from the education fund to the general fund. National School Breakfast and
Lunch has been moved from the education fund to the general fund. This program accounts for
payments for and payment of expenditures for providing breakfast and lunch to the Safe School students.
51
ST. CLAIR COUNTY
REGIONAL OFFICE OF EDUCATION #50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 12 - RECLASSIFICATION (Concluded)
Young Authors Conference has been reclassified from the education fund to the general fund in fiscal
year 2011. This program acco