FY11-ROE09-Fin-Full

              STATE OF ILLINOIS
CHAMPAIGN/FORD COUNTIES
REGIONAL OFFICE OF EDUCATION NO.9
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 Auditor General, State of Illinois
E.C. ORTIZ & CO., LLP
CERTIFIED PUBLIC ACCOUNTANTS
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
TABLE OF CONTENTS
PAGE
OFFICIALS 1
COMPLIANCE REPORT SUMMARY 2
FINANCIAL STATEMENT REPORT SUMMARY 4
FINANCIAL SECTION
Independent Auditors’ Report 5
Independent Auditors’ 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 7
Independent Auditors’ 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-133 9
Schedule of Findings and Questioned Costs 11
Financial Statement Findings 12
Federal Award Findings 16
Corrective Action Plan for Current Year Audit Findings 17
Summary Schedule of Prior Audit Findings 19
Management’s Discussion and Analysis 20
EXHIBIT
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets A 28
Statement of Activities B 29
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
TABLE OF CONTENTS (CONTINUED)
PAGE
EXHIBIT
BASIC FINANCIAL STATEMENTS (Continued)
Fund Financial Statements
Governmental Funds - Balance Sheet C 30
Governmental Funds - Reconciliation of the Governmental Funds
Balance Sheet to the Statement of Net Assets D 31
Governmental Funds - Statement of Revenues, Expenditures, and
Changes in Fund Balances E 32
Governmental Funds - Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances to the Statement of
Activities F 33
Proprietary Funds - Statement of Net Assets G 34
Proprietary Funds - Statement of Revenues, Expenses, and
Changes in Fund Net Assets H 35
Proprietary Funds - Statement of Cash Flows I 36
Fiduciary Funds - Statement of Fiduciary Net Assets J 37
Notes to the Financial Statements 38
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund - Schedule of Funding Progress 66
Other Post Employment Benefits - Schedule of Funding Progress 66
Other Post Employment Benefits Plan - Schedule of Employer Contributions 66
OTHER SUPPLEMENTARY INFORMATION
SCHEDULE
General Fund Accounts:
Combining Schedule of Accounts 1 67
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances 2 69
Budgetary Comparison Schedule 3 71
Special Revenue Funds:
Education Fund
Combining Schedule of Accounts 4 72
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances 5 75
Budgetary Comparison Schedules 6 78
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
TABLE OF CONTENTS (CONTINUED)
PAGE
SCHEDULE
OTHER SUPPLEMENTARY INFORMATION (Continued)
Special Revenue Funds (Continued):
Nonmajor Special Revenue Funds
Combining Balance Sheet 7 81
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances 8 82
Fiduciary Funds:
Combining Statement of Fiduciary Net Assets 9 83
Combining Statement of Changes in Assets
and Liabilities - All Agency Funds 10 84
Schedule of Disbursements to School District Treasurers
and Others 11 85
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards 12 86
Notes to Schedule of Expenditures of Federal Awards 88
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
OFFICIALS
Regional Superintendent
(current and during the audit period)
Dr. Jane E. Quinlan
Assistant Regional Superintendent
(July 1, 2011 to present)
Vacant
Assistant Regional Superintendent
(during the audit period)
Ms. Barbara A. Daly
Office is located at:
200 South Fredrick Street
Rantoul, Illinois 61866-2433
1
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
COMPLIANCE REPORT SUMMARY
The compliance audit testing performed in this audit was conducted in accordance with
Government Auditing Standards and in accordance with the Illinois State Auditing Act.
AUDITORS’ REPORTS
The auditors’ 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 This Audit Prior Audit
Audit findings 2 2
Repeated audit findings 1 1
Prior recommendations implemented or not repeated 1 1
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-1 12 Controls Over Financial Statement Preparation Significant Deficiency
11-2 14 Failure to Apply Appropriate Accounting Principles Significant Deficiency
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
16 None N/A
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
10-2 19 Controls Over Property Records N/A
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
None N/A
2
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
COMPLIANCE REPORT SUMMARY (CONTINUED)
EXIT CONFERENCE
The Champaign/Ford Counties Regional Office of Education No. 9 opted not to have an exit
conference during the financial audit for the year ended June 30, 2011. Responses to the
recommendations were provided by Dr. Jane E. Quinlan, Regional Superintendent, in a letter
dated January 23, 2012.
3
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
FINANCIAL STATEMENT REPORT SUMMARY
The audit of the accompanying basic financial statements of the Champaign/Ford Counties
Regional Office of Education No. 9 was performed by E. C. Ortiz & Co., LLP.
Based on their audit, the auditors expressed an unqualified opinion on the Champaign/Ford
Counties Regional Office of Education No. 9’s basic financial statements.
4
5
E.C. ORTIZ & CO., LLP
CERT IFI ED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
Honorable Williatn G. Holland
Auditor General
State oflllinois
As Special Assistant Auditors for the Auditor General, we have audited the accmnpanying
financial statements of the governmental activities, the business-type activities, each major fund~
and the aggregate remaining fund information of the Champaign/Ford Counties Regional Office
of Education No.9, as of and for the year ended June 30,2011, which collectivelycmnprise the
Champaign/Ford Counties Regional Office of Education No. 9's basic financial statements as
listed in the table of contents. These financial statements are the responsibility of the
Champaign/Ford Counties Regional Office of Education No. 9'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 the
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
op1n1ons.
In our opinion, the financial statements referred to above present fairly, in all 1naterial
respects, the respective financial position of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the
Champaign/Ford Counties Regional Office of Education No. 9, 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.
The Champaign/Ford Counties Regional Office of Education No.9 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 govermnental fund balances
and clarified the definitions of existing fund types. The adoption of this statetnent had no effect
on any of the Champaign/Ford Counties Regional Office of Education No. 9's governmental
funds' assets or liabilities nor was there any effect to the total amount of any of the
333 SOUTH DES PLAINES STREET, SUITE 2-N CHICAGO, IL 60661 tel: 312.876.1900 fax: 312.876.1911
6
Champaign/Ford Counties Regional Office of Education No.9's govenunental fund balances as
of and for the year ended June 3Q 2011.
In accordance with Government Auditing Standards, we have also issued a report dated
March 29, 2012 on our consideration of the Champaign/Ford Counties Regional Office of
Education No. 9's internal control over financial reporting and on our tests of its compliance
with certain provisions . of laws, regulations, contracts, and grant agreetnents 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 on pages 20 through 27, the Illinois Municipal
Retirement Fund Schedule of Funding Progress and the other postemployment benefits
information on page 66 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 measuretnent 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 Champaign/Ford Counties Regional Office of Education No. 9's
basic financial statements. The combining and individual nonmajor fund financial
statements, budgetary comparison schedules, and Schedule of Disbursements to School
District Treasurers and Others 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 the 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, Schedule of Disbursements to School District Treasurers and Others, 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
alltnaterial respects in relation to the basic financial statements taken as a whole.
~. Q;, Q;l - ~
Chicago, Illinois J March 29, 2012
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E.C. ORTIZ & CO., LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' 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
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 Champaign/Ford Counties Regional Office of
Education No.9, as of and for the year ended June 30, 2011 , which collectively comprise the
Champaign/Ford Counties Regional Office of Education No.9's basic financial state1nents and
have issued our report thereon dated March 29, 2012. 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.
Internal Control Over Financial Reporting
Management of the Champaign/Ford Counties Regional Office of Education No. 9 is
responsible for establishing and maintaining effective internal control over financial reporting.
In planning and performing our audit, we considered the Champaign/Ford Counties Regional
Office of Education No. 9'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 an opinion on the effectiveness of the
Champaign/Ford Counties Regional Office of Education No.9's internal control over financial
reporting. Accordingly, we do not express an opinion on the effectiveness of the
Champaign/Ford Counties Regional Office of Education No. 9'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.
333 SOUTH DES PLAINES STREET, SUITE 2-N CHICAGO, IL 60661 tel: 312.876.1900 fax: 312.876.1911
8
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. However, we identified certain deficiencies in internal control over financial
reporting, described in findings 11-1 and 11-2 in the accompanying Schedule of Findings and
Questioned Costs that we consider to be significant deficiencies in internal control over
financial reporting. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the ChatnpaignJF ord· Counties
Regional Office of Education No. 9'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 no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
The Champaign/Ford Counties Regional Office of Education No. 9'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 Champaign/Ford Counties Regional Office of
Education No.9'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 pass­through
entities and is not intended to be and should not be used by anyone other than these
specified parties.
d. ~. ~j .. 7
Chicago, Illinois ~
March 29, 2012
9
E.C. ORTIZ & CO., LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' 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-133
Honorable William G. Holland
Auditor General
State of Illinois
Compliance
We have audited Champaign/Ford Counties Regional Office of Education No.9's compliance
with the types of compliance requirements described in the OMB Circular A-133 Compliance
Supplement that could have a direct and material effect on each of Champaign/Ford Counties
Regional Office of Education No. 9's major federal programs for the year ended June 30,
2011. The Champaign/Ford Counties Regional Office of Education No. 9's tnajor federal
programs are identified in the Summary of the Auditors' 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 Champaign/Ford Counties Regional Office of Education
No. 9's management. Our responsibility is to express an opinion on the Champaign/Ford
Counties Regional Office of Education No.9'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-133, Audits of States, Local Governments, and Non­Profit
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 Champaign/Ford Counties Regional Office of Education No. 9'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 Champaign/Ford Counties
Regional Office ofEducation No.9's compliance with those requirements.
In our opinion, the Champaign/Ford Counties Regional Office of Education No.9 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.
333 SOUTH DES PLAINES STREET, SUITE 2-N CHICAGO, IL 60661 tel : 312.876.1900 fax: 312.876.1911
10
Internal Control Over Compliance
The management of the Champaign/Ford Counties Regional Office of Education No. 9 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 Champaign/Ford Counties Regional
Office of Education No. 9's internal control over compliance with 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 Champaign/Ford
Counties Regional Office of Education No.9'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 prograrn 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.
This report is intended solely for the information and use of the Auditor General, the General
Assembly, the Legislative Audit Commission, the Governor, agency tnanagement, others
within the entity, Illinois State Board of Education, federal awarding agencies and pass­through
entities and is not intended to be and should not be used by anyone other than these
specified parties.
d. (] . (;j., ~ ~
Chicago, IllinoitJ
March 29, 2012
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION I - SUMMARY OF AUDITORS’ RESULTS
FOR THE YEAR ENDED JUNE 30, 2011
Financial Statements
Type of auditors’ report issued: Unqualified
Internal control over financial reporting:
 Material weakness(es) identified? Yes  No
 Significant deficiency(ies) identified?  Yes None reported
 Noncompliance material to financial statements
noted? Yes  No
Federal Awards
Internal control over major programs:
 Material weakness(es) identified? Yes  No
 Significant deficiency(ies) identified? Yes  None reported
Type of auditors’ report issued on compliance for
major programs: Unqualified
Any audit findings disclosed that are required to be
reported in accordance with Section .510(a) of
OMB Circular A-133? Yes  No
Identification of major programs:
CFDA Number Name of Federal Program or Cluster
Title I, Part A Cluster:
84.389A Title I, Grants to Local Educational Agencies, Recovery Act
84.010A Title I, Grants to Local Educational Agencies, (Title I, Part A
of the ESEA)
84.287C Twenty-First Century Community Learning Centers
Dollar threshold used to distinguish between type A
and type B Programs: $300,000
Auditee qualified as low-risk auditee? Yes  No
11
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II - FINANCIAL STATEMENT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
FINDING NO. 11-1 - Controls Over Financial Statement Preparation (Partially
Repeated from Finding Nos. 10-1, 09-1, 08-1, and 07-1)
Criteria/Specific Requirement:
The Champaign/Ford Counties Regional Office of Education No. 9 (ROE No. 9) is required
to maintain a system of controls over the preparation of financial statements in accordance
with generally accepted accounting principles (GAAP). ROE No. 9’s internal controls over
GAAP financial reporting should include adequately trained personnel with the knowledge
and expertise to prepare and/or thoroughly review GAAP based financial statements to
ensure they are free of material misstatements and include all disclosures as required by the
Governmental Accounting Standards Board (GASB).
In addition, GASB Statement No. 34, Basic Financial Statements - Management’s Discussion
and Analysis - for State and Local Governments requires governments to present
government-wide and fund financial statements as well as a summary reconciliation of the
(a) total governmental funds balances to net assets of governmental activities in the
Statement of Net Assets, and (b) total change in governmental fund balances to the change in
net assets of governmental activities in the Statement of Activities.
Condition:
The ROE No. 9 does not have sufficient internal controls over the financial reporting process.
The ROE No. 9 maintains controls over the processing of most accounting transactions, and
prepares the governmental fund financial statements.
In FY 2011, the ROE No. 9 was able to prepare the individual funds financial statements as
well as the notes to the financial statements. However, the government-wide financial
statements which include the Statement of Net Assets, Statement of Activities, Governmental
Funds Balance Sheet, Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balances and the required reconciliation of government-wide and fund
financial statements were not prepared.
Effect:
The ROE No. 9 management or its employees, in the normal course of performing their
assigned functions, may not prevent or detect financial statement misstatements and
disclosure omissions in a timely manner.
12
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II - FINANCIAL STATEMENT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
FINDING NO. 11-1 - Controls Over Financial Statement Preparation (Partially
Repeated from Finding Nos. 10-1, 09-1, 08-1, and 07-1) (Continued)
Cause:
According to the ROE No. 9 management, they did not have adequate funding to hire and/or
train their accounting personnel in order to comply with the GASB requirements. In
addition, the ROE No. 9 management accepts the degree of risk associated with these
conditions.
Auditors’ Recommendation:
As part of its internal control over the preparation of its financial statements, the ROE No. 9
should implement a comprehensive preparation and/or review procedure to ensure that the
financial statements are complete and accurate. These procedures should be performed by a
properly trained individual possessing a thorough understanding of the applicable generally
accepted accounting principles, GASB pronouncements, and knowledge of the ROE No. 9’s
activities and operations.
Management’s Response:
Regional Office of Education No. 9 strives to maintain a system of controls over the
preparation of financial statements in accordance with generally accepted account principles
(GAAP). ROE No. 9 understands the nature of this finding and realizes that this
circumstance is not unusual in an organization of this size. The ROE has worked to alleviate
this finding by consulting about accounting practices and preparation of GAAP-based
financial statements with other ROE bookkeepers who have not received the finding and
making changes to our procedures based on their recommendations. ROE No. 9 prepared the
individual funds financial statements as well as the notes to the financial statements for the
first time in 2011. As part of on-going efforts, ROE No. 9 will continue to strive to improve
controls over financial statement preparation. Beginning in FY2012, ROE No. 9 will attempt
to prepare the required reconciliation of government-wide and fund financial statements.
13
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II - FINANCIAL STATEMENT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
FINDING NO. 11-2 - Failure to Apply Appropriate Accounting Principles
Criteria/Specific Requirement:
Generally accepted accounting principles (GAAP) require that a lease be capitalized if any
one of following four criteria is a characteristic of the lease transaction: (1) the lease
transfers ownership of the property to the lessee by the end of the lease term, (2) the lease
contains bargain purchase options, (3) the lease term is equal to 75% or more of the
estimated economic life of the leased property, or (4) the present value of the minimum lease
payments at the inception of the lease, excluding executory costs, equals at least 90% of the
fair value of the leased property. Capital leases are treated as an acquisition of assets and the
incurrence of obligations by the lessee.
Condition:
The Champaign/Ford Counties Regional Office of Education No. 9 (ROE No. 9) did not
properly record certain lease transactions and capital asset acquisitions, and as a result, did
not properly apply the appropriate generally accepted accounting principles. Payments on
capital leases were accounted for as operating leases and recorded as purchased services.
The leases met two of the criteria requiring them to be capitalized: the lease contained
bargain purchase options, and the lease terms of the equipment were more than 75% of the
estimated economic lives of the equipment. As of June 30, 2011, the total net book value of
the leased equipment and the present value of the related lease payable were $19,302 and
$19,660, respectively.
Auditors proposed adjusting entries to record the lease transactions in accordance with
GAAP.
Effect:
Failure to use the applicable generally accepted accounting principles may result in
inaccurate and incomplete financial statements.
Cause:
According to the ROE No. 9 management, the ROE generally does not keep the equipment
items through the end of the lease term and, therefore, considered the recording of the lease
transactions as operating expenses proper.
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CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II - FINANCIAL STATEMENT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
FINDING NO. 11-2 - Failure to Apply Appropriate Accounting Principles (Continued)
Auditors’ Recommendation:
We recommend the Champaign/Ford Counties ROE No. 9 establish procedures to ensure
lease transactions and capital asset acquisitions are properly accounted for and reported in
accordance with generally accepted accounting principles. If necessary, accounting and
reporting guidance should be obtained from technical resources to be in conformity with
GAAP.
Management’s Response:
Regional Office of Education No. 9 recognizes that certain lease transactions were not
properly recorded as capital asset acquisitions. ROE No. 9 will make adjusting entries to
record the lease transactions in accordance with GAAP.
15
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION III - FEDERAL AWARD FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Instances of Noncompliance:
None
Significant Deficiencies:
None
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CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
FINDING NO. 11-1 - Controls Over Financial Statement Preparation (Partially
Repeated from Finding Nos. 10-1, 09-1, 08-1, and 07-1)
Condition:
The ROE No. 9 does not have sufficient internal controls over the financial reporting process.
The ROE No. 9 maintains controls over the processing of most accounting transactions, and
prepares the governmental fund financial statements.
In FY 2011, the ROE No. 9 was able to prepare the individual funds financial statements as
well as the notes to the financial statements. However, the government-wide financial
statements which include the Statement of Net Assets, Statement of Activities, Governmental
Funds Balance Sheet, Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balances and the required reconciliation of government-wide and fund
financial statements were not prepared.
Plan:
ROE No. 9 will continue to strive to improve controls over financial statement preparation.
ROE No. 9 prepared the individual funds financial statements as well as the notes to the
financial statements for the first time in 2011.
Anticipated Date of Completion:
June 30, 2012
Name of Contact Person:
Dr. Jane Quinlan, Regional Superintendent, Champaign/Ford Counties ROE No. 9
17
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
FINDING NO. 11-2 - Failure to Apply Appropriate Accounting Principles
Condition:
The Champaign/Ford Counties Regional Office of Education No. 9 (ROE No. 9) did not
properly record certain lease transactions and capital asset acquisitions, and as a result, did
not properly apply the appropriate generally accepted accounting principles. Payments on
capital leases were accounted for as operating leases and recorded as purchased services.
The leases met two of the criteria requiring them to be capitalized: the lease contained
bargain purchase options, and the lease terms of the equipment were more than 75% of the
estimated economic lives of the equipment. As of June 30, 2011, the total net book value of
the leased equipment and the present value of the related lease payable were $19,302 and
$19,660, respectively.
Auditors proposed adjusting entries to record the lease transactions in accordance with
GAAP.
Plan:
ROE No. 9 will make adjusting entries to record the lease transaction in accordance with
GAAP. In the future, ROE No. 9 will record lease transactions as a capital asset acquisition
if it meets any of the four criteria established by GAAP.
Anticipated Date of Completion:
January 31, 2012
Name of Contact Person:
Dr. Jane Quinlan, Regional Superintendent, Champaign/Ford Counties ROE No. 9
18
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
JUNE 30, 2011
Finding No. Condition Current Status
10-1 Controls Over Financial Statement Preparation Partially Repeated
10-2 Controls Over Property Records Not Repeated
19
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The Champaign/Ford Counties Regional Office of Education No. 9 (ROE No. 9) provides
this Management’s Discussion and Analysis of its financial statements. This narrative
overview and analysis of the financial activities is for the fiscal year ended June 30, 2011.
We encourage readers to consider this information in conjunction with the ROE No. 9’s
financial statements, which follow.
During fiscal year 2011, ROE No. 9 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 12 to the Financial Statements. Because of
these reclassifications, the fund analysis is not comparable between fiscal year 2010 and
fiscal year 2011.
2011 Financial Highlights
 Within the Governmental Funds, the General Fund revenues increased by $1,408,071
(61%) from $2,303,191 in FY 2010 to $3,711,262 in FY 2011. General Fund
expenditures increased by $880,367 (36%) from $2,413,817 in FY 2010 to $3,294,184 in
FY 2011.
 Within the Governmental Funds, the Special Revenue Funds revenues decreased by
$2,661,241 (50%) from $5,311,288 in FY 2010 to $2,650,047 in FY 2011. The Special
Revenue Funds expenditures decreased by $2,729,483 (53%) from $5,180,419 in FY
2010 to $2,450,936 in FY 2011.
 Proprietary Funds revenues increased by $262,626 (211%) from $124,518 in FY 2010 to
$387,144 in FY 2011. The Proprietary Funds expenditures increased by $275,882
(208%) from $132,557 in FY 2010 to $408,439 in FY 2011.
 The ROE No. 9 has long term debt related to the other post employment retirement
benefit obligations and capital lease obligations.
Using This Report
This report consists of a series of financial statements and other information, as follows:
 Management’s Discussion and Analysis introduces financial statements and provides an
analytical overview of the ROE No. 9’s financial activities.
20
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
 The Government-wide financial statements consist of a Statement of Net Assets and a
Statement of Activities. These provide information about the activities of the ROE No. 9
as a whole and present an overall view of the Office’s finances.
 Fund financial statements report the ROE No. 9’s operations in more detail than the
government-wide statements by providing information about the most significant funds.
 Notes to the financial statements provide additional information that is needed for a full
understanding of the data provided in the basic financial statements.
 Required supplementary information further explains and supports the financial
statements and other supplementary information provides detailed information about the
major and non-major funds.
The Statement of Net Assets and the Statement of Activities
The government-wide statements report information about the ROE No. 9 as a whole using
accounting methods similar to those used by private-sector companies. The Statement of Net
Assets includes all of the assets and liabilities. All of the current year revenues and expenses
are accounted for in the Statement of Activities regardless of when cash is received or paid.
The two government-wide statements report the ROE No. 9’s net assets and how they have
changed. Net assets - the difference between the assets and liabilities - are one way to
measure the ROE No. 9’s financial health or position.
Over time, increases or decreases in the net assets can be an indicator of whether financial
position is improving or deteriorating, respectively.
To assess the Regional Office’s overall health, additional non-financial factors, such as new
laws, rules, regulations, and actions by officials at the State level need to be considered.
In the government-wide financial statements, the ROE No. 9’s activities are divided into two
categories:
 Governmental activities - Most of the ROE No. 9’s basic services are included here, such
as local, State and federal grant-funded programs, support services, and administration.
 Business-type activities - The ROE No. 9 charges fees to help cover costs of certain
services and workshops it provides.
21
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Fund Financial Statements
The fund financial statements provide detailed information about the ROE No. 9’s funds.
Funds are accounting devices that allow the tracking of specific sources of funding and
spending of particular programs. Some funds are required by State law. The ROE No. 9
establishes other funds to control and manage money for particular purposes.
The ROE No. 9 has three kinds of funds:
1) Governmental funds account for all of the ROE No. 9’s services. These focus on how
cash and other financial assets can be readily converted to cash flow in and out and the
balance left at year-end that is available for spending. Consequently, the governmental
fund statements provide a detailed short-term view that helps determine whether there are
more or fewer resources that can be spent in the near future to finance the ROE No. 9’s
programs. Because this information does not encompass the additional long-term focus
of the government-wide financial statements, reconciliation between the governmental
fund financial statements and the government-wide financial statements follows the
related governmental fund financial statements. The ROE No. 9’s Governmental Funds
include the General Fund and the Special Revenue Funds. The governmental funds
required financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances.
2) Proprietary funds account for resources from fees charged to entities, individuals or other
funds that use its resources. Proprietary fund statements provide both long-term and
short-term financial information consistent with the focus provided by government-wide
financial statements. The ROE No. 9’s proprietary funds include the enterprise fund
presented as business-type activities in the government-wide financial statements, and the
internal service fund which is included in the governmental activities in the government-wide
financial statements. The required proprietary financial statements include a
Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net
Assets, and a Statement of Cash Flows.
3) Fiduciary funds are used to account for assets held by the ROE No. 9 in a trust capacity
or as an agent for individuals and private or governmental organizations. These funds are
custodial in nature (assets equal liabilities) and do not involve measurement of results of
operations. The Fiduciary funds required financial statements include a Statement of
Fiduciary Net Assets.
22
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Government-Wide Financial Analysis
As noted earlier, net assets may serve, when examined over time, as one indicator of the
financial position of the ROE No. 9. The total net assets at the end of FY 2011 were
$3,041,937. The analysis that follows provides a summary of the ROE No. 9’s net assets at
June 30, 2011 and June 30, 2010, for the governmental and business-type activities.
CONDENSED STATEMENT OF NET ASSETS
Governmental Activities Business-Type Activities Total
2011 2010 2011 2010 2011 2010
ASSETS
Current assets $ 3,244,247 $ 2,915,039 $ 660,827 $ 506,262 $ 3,905,074 $ 3,421,301
Capital assets, net of
Depreciation 165,441 185,787 6,532 5,178 171,973 190,965
TOTAL ASSETS 3,409,688 3,100,826 667,359 511,440 4,077,047 3,612,266
LIABILITIES
Current liabilities 1,016,524 1,035,171   1,016,524 1,035,171
Noncurrent liabilities 18,586 4,082   18,586 4,082
TOTAL LIABILITIES 1,035,110 1,039,253   1,035,110 1,039,253
NET ASSETS
Invested in capital assets,
net of related debt 145,781 173,409 6,532 5,178 152,313 178,587
Restricted for educational
Purposes 504,443 242,929   504,443 242,929
Unrestricted 1,724,354 1,645,235 660,827 506,262 2,385,181 2,151,497
TOTAL NET ASSETS $ 2,374,578 $ 2,061,573 $ 667,359 $ 511,440 $ 3,041,937 $ 2,573,013
The ROE No. 9’s net assets increased by $468,924 (18%) from FY 2010 primarily due to the
excess of revenues over expenses generated from governmental activities. Net assets
invested in capital assets of $152,313, representing 5% of total net assets reflects the ROE
No. 9‘s investment in equipment and office furniture, net of obligations under capital leases.
An additional portion of the ROE No. 9’s net assets of $504,443 (17%) represents resources
that are subject to external restrictions on how they may be used. The majority of the
restricted balance is for teacher professional development. The largest portion of the ROE
No. 9’s net assets of $2,385,181 (78%) reflects the unrestricted net assets that may be used to
meet the ROE No. 9’s obligations to other entities, employees and creditors.
23
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
STATEMENT OF ACTIVITIES
The following analysis shows the changes in net assets for governmental and business-type
activities for the year ended June 30, 2011 and June 30, 2010.
Governmental Activities Business-Type Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Operating grants and
contributions $ 2,056,212 $ 4,547,005 $  $  $ 2,056,212 $ 4,547,005
Charges for services 461,542 1,459,513 385,890 123,457 847,432 1,582,970
General revenues:
Federal sources 180,809    180,809 
State sources 852,617    852,617 
Local sources 1,965,472 519,397   1,965,472 519,397
Interest income, net 3,290 13,669 1,254 1,061 4,544 14,730
On-behalf statements 712,364 1,263,824   712,364 1,263,824
Loss on disposal of assets  (423)    (423)
Total revenues 6,232,306 7,802,985 387,144 124,518 6,619,450 7,927,503
Expenses:
Salaries and benefits 2,649,342 2,662,909 66,319 9,928 2,715,661 2,672,837
Purchased services 1,654,826 2,144,434 126,601 54,742 1,781,427 2,199,176
Supplies and materials 420,061 895,340 182,491 12,494 602,552 907,834
Capital expenditures  62,936 13,016  13,016 62,936
Depreciation 58,954 77,077 19,920 2,309 78,874 79,386
Payments to other
governmental units 215,494 467,654  51,642 215,494 519,296
Miscellaneous 31,046 22,305 92 1,442 31,138 23,747
On-behalf payments 712,364 1,263,824   712,364 1,263,824
Total expenses 5,742,087 7,596,479 408,439 132,557 6,150,526 7,729,036
Change in net assets 490,219 206,506 (21,295) (8,039) 468,924 198,467
Net assets, beginning
(as restated) 1,884,359 1,855,067 688,654 519,479 2,573,013 2,374,546
Net assets, ending $ 2,374,578 $ 2,061,573 $ 667,359 $ 511,440 $ 3,041,937 $ 2,573,013
During FY 2011, the governmental funds had excess of revenues over expenditures of
$490,219. The excess revenues resulted primarily from the increase in State aid during the
year. The ROE No. 9 was able to maintain the related expenses for most of its programs at
previous year’s level, resulting in a favorable excess of revenues over expenditures.
Total revenues of $6.2 million consisted primarily of State and federal grants totaling $3.2
million, and local revenues from tuition, fees and flow-through money totaling $2.4 million.
Governmental revenues posted a net decrease of $1.6 million (20%) from previous year,
primarily due to the decrease in operating grants and on-behalf payments.
24
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Total expenses posted a decrease of $1.9 million (24%) compared to previous year. The
decrease was mainly due to reduced expenses for educational materials and equipment
related to the Gifted Education program that was substantially completed in FY 2010.
Financial Analysis of the ROE No. 9 Funds
As previously noted, the ROE No. 9 uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements.
Governmental Fund Highlights
The ROE No. 9 continues to offer technical assistance and professional development
activities to teachers in all areas of curriculum. In FY 2011, at least 1,067 teachers have
received direct professional development to improve their basic knowledge and/or their
teaching pedagogy. The ROE No. 9 is responsible for professional development activities to
maintain certification by our school administrators through the Administrator Academy. At
least 167 administrators have received direct professional development in FY 2011. The
ROE No. 9 also operates a middle school and high school through the Regional Safe School
Program for students who have experienced serious difficulties in the public schools. This
school served 233 students. The DCFS Education Advisor Online program served 20
families and 49 individual children were served with direct interventions. The Truancy
Program had 103 referrals and served 124 students to ameliorate their truancy problems.
The McKinney Education-Homeless Children Program served 394 students and families. In
FY 2011, the ROE No. 9 served 3,099 teachers through the Certification Program that assists
teachers in completing certification requirements and obtaining a certificate. The ROE No.9
also provided nine Bus Driver Trainings throughout the year issuing 53 Initial Bus Driver
certificates and 336 Refresher Bus Driver Certificates. There are a variety of other
regulatory programs that are statute based including the annual inspection of school buildings
for health and safety and regular compliance monitoring of districts. A General Education
Diploma is offered through the ROE No. 9’s cooperative effort with Parkland College and
the Lincoln’s Challenge Program, which includes testing to meet high school equivalency.
The ROE No. 9 administered 1,222 GED tests. Migrant Education program served 138
students, and 21st Century grant served 288 students. In addition, the ROE No. 9 has a
variety of smaller programs that would be classified as consultative services working directly
with the schools.
The ROE No. 9 assists educators, parents and other patrons on a daily basis as they call for
information and/or with questions or problems related to education. During FY 2011, the
ROE No. 9 responded to 11,827 phone calls and walk-ins with questions concerning bus
service, grade problems, special education needs and requirements, residency concerns, and
home school issues. The ROE No. 9 also offers guidance to parents, as well as serves as a
liaison between parents and the schools.
25
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Proprietary Fund Highlights
The business-type activities net assets decreased by $21,295 during FY 2011. This includes
net decrease in net assets of funds that were reclassified under the Proprietary Fund in FY
2011. The ROE No. 9 provided training and workshops to 17 public school districts and 24
non-public schools in the region. As part of its mission, the ROE No. 9 continued to
provide workshop and training services to school districts even during economically
challenging times. Many workshops and services were offered free-of-charge and below cost
recovery in order to meet organizational objectives.
Budgetary Highlights
The ROE No. 9 annually adopts budgets for several funds. However, the annual budgets are
not required to be legally adopted. All grant budgets are prepared by the ROE No. 9 and
submitted to the granting agency for approval. Amendments must be submitted under
guidelines established by the granting agency. A schedule showing the comparison of the
ROE No. 9’s actual financial activity to the budget is included in the supplementary
information section of this report.
Capital Assets
Capital assets of the ROE No. 9 include office equipment, computers, servers, audiovisual
equipment and office furniture. The ROE No. 9 maintains an inventory of capital assets that
have been accumulated over time. In FY 2011, total additions amounted to $59,882 and total
retirements amounted to $49,526. Depreciation expense for FY 2011 was $78,874.
Economic Factors and Next Year’s Budget
At the time these financial statements were prepared and audited, the ROE No. 9 was aware
of several existing circumstances that could significantly impact its financial health in the
future:
 The interest rate on investment remains low and will impact income.
 Grants have either been reduced or remained at previous levels.
 The State of Illinois is facing a financial crisis resulting in cuts to State programs and
significant delays in payment.
The ROE No. 9 has tried to maintain the programs that have been previously offered to the
school districts. In the future, these services may have to be reduced if the ROE No. 9 does
not receive sufficient funding or if funding is not received in a timely manner. ROE No. 9’s
goal is to give the very best services to its schools and clients as possible.
26
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Contacting the ROE No. 9’s Financial Management
This report is designed to provide the Regional Office’s citizens, taxpayers, customers, and
creditors with a general overview of the Regional Office’s finances and to demonstrate the
ROE No. 9’s accountability for the money it receives. If you have questions about this report
or need additional financial information, contact the Regional Superintendent’s office at The
Champaign/Ford Counties Regional Office of Education No. 9, 200 S. Fredrick, Rantoul, IL
61866.
27
BASIC FINANCIAL STATEMENTS
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT A
STATEMENT OF NET ASSETS
JUNE 30, 2011
Governmental
Activities
Business-Type
Activities Total
ASSETS
Current assets
Cash and cash equivalents $ 2 ,872,679 $ 238,455 $ 3,111,134
Due from (to) other funds (405,153) 405,153 -
Due from other governmental agencies 7 76,721 17,219 793,940
Total current assets 3 ,244,247 660,827 3,905,074
Noncurrent assets
Capital assets, net 1 65,441 6,532 171,973
TOTAL ASSETS 3 ,409,688 667,359 4,077,047
LIABILITIES
Current liabilities
Accounts payable and accrued expenses 3 46 - 346
Due to other governmental agencies 5 36,210 - 536,210
Deferred revenues 4 74,812 - 474,812
Lease payable 5 ,156 - 5,156
Total current liabilities 1 ,016,524 - 1,016,524
Noncurrent liabilities
Lease payable 1 4,504 - 14,504
Net OPEB obligation 4 ,082 - 4,082
Total noncurrent liabilities 1 8,586 - 18,586
TOTAL LIABILITIES 1 ,035,110 - 1,035,110
NET ASSETS
Invested in capital assets, net of related debt 1 45,781 6,532 152,313
Restricted for educational purposes 5 04,443 - 504,443
Unrestricted 1 ,724,354 660,827 2,385,181
TOTAL NET ASSETS $ 2 ,374,578 $ 667,359 $ 3,041,937
Primary Government
The notes to the financial statements are an integral part of this statement.
28
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT B
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Operating
Charges for Grants and Governmental Business-Type
Expenses Services Contribution Activities Activities Total
FUNCTIONS/PROGRAMS
Primary government
Governmental activities:
Instructional services
Salaries $ 2,053,118 $ 166,155 $ 736,903 $ (1,150,060) $ - $ (1,150,060)
Benefits 596,224 46,154 198,915 (351,155) - (351,155)
Purchased services 1,654,826 152,309 686,688 (815,829) - (815,829)
Supplies and materials 420,061 55,385 246,624 (118,052) - (118,052)
Depreciation expense 58,954 - - (58,954) - ( 58,954)
Miscellaneous 31,046 - 1,318 (29,728) - ( 29,728)
Payments to other governments 215,494 41,539 180,128 6,173 - 6,173
Capital expenditures - - 5,636 5,636 - 5,636
Administrative
On-behalf payments 712,364 - - (712,364) - (712,364)
Total governmental activities 5,742,087 461,542 2,056,212 (3,224,333) - (3,224,333)
Business-type activities:
Charges for services 408,439 385,890 - - (22,549) ( 22,549)
Total business-type activities 408,439 385,890 - - (22,549) ( 22,549)
Total primary government $ 6,150,526 $ 847,432 $ 2,056,212 (3,224,333) (22,549) (3,246,882)
General revenues:
Federal sources $ 180,809 - 180,809
State sources 852,617 - 852,617
Local sources 1,965,472 - 1,965,472
Net interest income 3,290 1 ,254 4,544
On-behalf payments 712,364 - 712,364
Total general revenues 3,714,552 1 ,254 3,715,806
Change in net assets 490,219 (21,295) 468,924
Net assets - beginning (Restated, See Note 12) 1,884,359 688,654 2,573,013
Net assets - ending $ 2,374,578 $ 667,359 $ 3,041,937
The notes to the financial statements are an integral part of this statement.
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Program Revenues
29
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT C
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2011
General Fund Education Fund
Nonmajor Special
Revenue Funds
Total
Governmental Funds
ASSETS
Cash and cash equivalents $ 1,457,713 $ 1,008,515 $ 385,259 $ 2,851,487
Due from other funds 65,623 15,911 - 81,534
Due from other governmental agencies 206,387 569,080 456 775,923
TOTAL ASSETS 1,729,723 1,593,506 385,715 3,708,944
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued expenses 285 61 - 346
Due to other funds 788 485,899 - 486,687
Due to other governmental agencies - 536,210 - 536,210
Deferred revenues 22,204 510,488 - 532,692
Total liabilities 23,277 1,532,658 - 1,555,935
FUND BALANCES
Restricted - 60,848 385,715 446,563
Assigned 1,597,524 - - 1,597,524
Unassigned 108,922 - - 108,922
Total fund balances 1,706,446 60,848 385,715 2,153,009
TOTAL LIABILITIES AND FUND BALANCES $ 1,729,723 $ 1,593,506 $ 385,715 $ 3,708,944
The notes to the financial statements are an integral part of this statement.
30
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT D
GOVERNMENTAL FUNDS
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS
JUNE 30, 2011
Total fund balances - governmental funds $ 2,153,009
Amounts reported for governmental activities in the Statement of Net
Assets are different because:
Capital assets used in the governmental activities are not financial
resources and therefore, are not reported in the funds. 165,441
Lease payable reflects capital lease payments that the Regional Office
of Education No. 9 will recognize as expensed when paid in the
governmental financial statements. (19,660)
The OPEB obligation resulting from annual required contributions in
excess of actual contributions are not due and payable in the current
period and therefore, are not reported in the funds. (4,082)
Revenues are not available to pay for current-period expenditures
and therefore, are deferred in the funds. 57,880
The Internal Service Fund is used by management to charge the costs of
general accounting services of the Regional Office of Education
No. 9 to individual funds. The assets and liabilities of the internal
service fund are included in governmental activities in the
Statement of Net Assets.
Net Assets - Internal Service Fund $ 32,684
Less capital assets of internal service fund included in total above (10,694) 21,990
Net assets of governmental activities $ 2,374,578
The notes to the financial statements are an integral part of this statement.
31
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT E
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
General Fund Education Fund
Nonmajor Special
Revenue Funds
Total
Governmental Funds
REVENUES
Federal sources $ 180,809 $ 946,310 $ - $ 1,127,119
State sources 852,617 1,241,235 960 2,094,812
Local sources 1,965,472 330,960 130,582 2,427,014
On-behalf payments 712,364 - - 712,364
Total revenues 3,711,262 2,518,505 131,542 6,361,309
EXPENDITURES
Instructional services:
Salaries 1,174,754 841,860 36,504 2,053,118
Benefits 359,124 234,973 2,127 596,224
Purchased services 841,643 780,683 37,826 1,660,152
Supplies and materials 126,093 284,802 9,166 420,061
Miscellaneous 29,475 1,425 146 31,046
Payments to other governments 788 214,706 - 215,494
On-behalf payments 712,364 - - 712,364
Capital expenditures 49,943 5,622 1,096 56,661
Total expenditures 3,294,184 2,364,071 86,865 5,745,120
EXCESS OF REVENUES OVER EXPENDITURES 417,078 154,434 44,677 616,189
OTHER FINANCING SOURCES (USES)
Transfer in (out) (34,377) 34,377 - -
Proceeds from long-term lease payable 26,456 - - 26,456
Repayment of long-term lease payable (19,174) - - ( 19,174)
Net interest income 1,939 660 691 3,290
Total other financing sources (uses) (25,156) 35,037 691 10,572
NET CHANGE IN FUND BALANCES 391,922 189,471 45,368 626,761
FUND BALANCES (DEFICIT), BEGINNING OF YEAR (RESTATED, SEE NOTE 12) 1,314,524 (128,623) 340,347 1,526,248
FUND BALANCES, END OF YEAR $ 1,706,446 $ 60,848 $ 385,715 $ 2,153,009
The notes to the financial statements are an integral part of this statement.
32
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT F
GOVERNMENTAL FUNDS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Net change in fund balances $ 626,761
Amounts reported for governmental activities in the Statement of Activities are
different because:
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 expenditures, net of transfers $ 56,661
Depreciation expense (58,954) (2,293)
Capital proceeds related to a capital lease are recognized in the governmental
fund financial statements as revenue during the initial year of the
obligation, however, are recorded as a debt in the government wide
financial statements. (26,456)
Repayment of long-term capital lease obligation is reported as an expenditure
in governmental funds, but the repayment reduces long-term liabilities
in the Statement of Net Assets. 19,174
Revenues reported in the Statement of Activities in the prior year that did not provide
current financial resources are not reported as revenues in the governmental funds (190,173)
Revenues in the Statement of Activities that do not provide current financial
resources are reported as deferred revenues in the funds. 57,880
The net additions to capital assets of the internal service fund is reported
under governmental activities 3,221
The net expense of the internal service fund is reported under governmental
activities, excluding the depreciation expense of $2,355 which is
included in total depreciation above. 2,105
Change in net assets of governmental activities $ 490,219
The notes to the financial statements are an integral part of this statement.
33
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT G
PROPRIETARY FUNDS
STATEMENT OF NET ASSETS
JUNE 30, 2011
Local
Workshops
Nonmajor
Enterprise Fund Total
Internal
Service Fund
ASSETS
Current assets
Cash and cash equivalents $ 230,494 $ 7,961 $ 238,455 $ 21,192
Due from other funds 405,153 - 405,153 -
Due from other governmental agencies 17,219 - 17,219 798
Total current assets 652,866 7,961 660,827 21,990
Noncurrent assets
Capital assets, net 6,532 - 6,532 10,694
TOTAL ASSETS 659,398 7,961 667,359 32,684
NET ASSETS
Invested in capital assets 6,532 - 6,532 10,694
Unrestricted 652,866 7,961 660,827 21,990
TOTAL NET ASSETS $ 659,398 7,961 667,359 $ 32,684
The notes to the financial statements are an integral part of this statement.
Governmental
Business-Type Activities - Enterprise Fund Activities
34
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT H
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2011
Governmental
Activities
Local
Workshops
Nonmajor
Enterprise Fund Total
Internal
Service Fund
OPERATING REVENUES
Charges for services $ 368,141 $ 17,749 $ 385,890 $ 135,001
OPERATING EXPENSES
Salaries 53,012 - 53,012 83,864
Benefits 13,307 - 13,307 28,874
Purchased services 113,291 13,310 126,601 1 1,166
Supplies and materials 182,491 - 182,491 5 ,851
Miscellaneous 92 - 92 4 8
Depreciation 19,920 - 19,920 2 ,355
Capital expenditures 13,016 - 13,016 -
Total operating expenses 395,129 13,310 408,439 132,158
OPERATING INCOME (LOSSES) (26,988) 4,439 (22,549) 2 ,843
NONOPERATING REVENUE
Interest income 1,236 18 1,254 128
CHANGE IN NET ASSETS (25,752) 4,457 (21,295) 2 ,971
NET ASSETS, BEGINNING OF YEAR
(RESTATED, SEE NOTE 12) 685,150 3,504 688,654 2 9,713
NET ASSETS, END OF YEAR $ 659,398 $ 7,961 $ 667,359 $ 3 2,684
The notes to the financial statements are an integral part of this statement.
Business-Type Activities - Enterprise Funds
35
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT I
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2011
Governmental
Activities
Local
Workshops
Nonmajor
Enterprise Fund Total
Internal
Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts for workshops and services $ 361,894 $ 17,749 $ 379,643 $ 134,990
Payments to suppliers (714,043) (13,310) (727,353) (17,065)
Payments to employees (66,319) - (66,319) (112,738)
Net cash provided by (used in) operating activities (418,468) 4,439 (414,029) 5,187
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:
Purchase of capital assets - - - (3,221)
Net cash used in capital financing activities - - - (3,221)
CASH FLOWS FROM INVESTING ACTIVITY:
Interest 1,236 18 1,254 128
Net cash provided by investing activity 1,236 18 1,254 128
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (417,232) 4,457 (412,775) 2,094
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 6 47,726 3,504 651,230 19,098
CASH AND CASH EQUIVALENTS, END OF YEAR $ 230,494 $ 7,961 $ 238,455 $ 21,192
Reconciliation of operating income (losses) to
net cash provided by (used in) operating activities:
Operating income (losses) $ (26,988) $ 4,439 $ (22,549) $ 2,843
Adjustments to reconcile operating income (losses) to net cash
provided by (used in) operating activities:
Depreciation 1 9,920 - 19,920 2,355
Effects of changes in assets and liabilities:
Due from other funds (405,153) - (405,153) -
Due from other governmental agencies (6,247) - (6,247) (11)
Net cash provided by (used in) operating activities $ (418,468) $ 4,439 $ (414,029) $ 5,187
The notes to the financial statements are an integral part of this statement.
Business-Type Activities - Enterprise
Fund
36
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9 EXHIBIT J
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30, 2011
ASSETS
Cash and cash equivalents $ 2 16,225
LIABILITIES
Accounts payable and accrued expenses 215,782
Due to other governmental agencies 443
TOTAL LIABILITIES $ 2 16,225
The notes to the financial statements are an integral part of this statement.
37
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
The Champaign/Ford Counties Regional Office of Education No. 9 (ROE No. 9) operates
under the School Code (Articles 3 and 3A of Illinois Compiled Statutes, Chapter 105).
The ROE No. 9 encompasses Champaign/Ford Counties, Illinois. A Regional
Superintendent of Schools serves as chief administrative officer of ROE No. 9, and is
elected to the position for a four-year term pursuant to Article 3 of Illinois Compiled
Statutes, Chapter 105.
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; to evaluate the schools in the
region; to examine evidence of indebtedness; to file and keep the returns of elections
required to be returned to the Regional Superintendent’s office; and to 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 ROE No. 9’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; to
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.
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
within his region are properly bonded.
The Regional Superintendent is also responsible for apportionment and payment of funds
received from the State for the districts in the region, 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.
38
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
For the period ended June 30, 2011, the ROE No. 9 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 ROE No. 9.
These are the only activities considered to be part of (controlled by or dependent on) the
ROE No. 9, as determined by the application of the criteria set forth in Governmental
Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity.
The criteria for inclusion of an entity include, but are not limited to, legal standing, fiscal
dependency, imposition of will and potential for financial benefit or burden.
The ROE No. 9 has determined that no other outside agency meets any of the above
criteria and, therefore, no other agency has been included as a component unit in the
financial statements. Furthermore, the ROE No. 9 does not consider itself to be a
component unit of any other entity.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e. the Statement of Net Assets and the
Statement of Activities) report information on all of the non-fiduciary activities of the
primary government. For the most part, the effect of interfund activity has been removed
from these statements. The statements distinguish between those activities of the ROE
No. 9 that are governmental in nature and those that are considered business-type
activities. Governmental activities normally are supported by operating grants and
contributions, charges for services and intergovernmental revenues. Business-type
activities normally are supported by amounts assessed or received from local sources for
the ROE No. 9 programs.
The Statement of Net Assets presents the ROE No. 9’s nonfiduciary assets and liabilities
with the differences reported as net assets. Net assets present the difference between
assets and liabilities in the Statement of Net Assets. Net assets of the ROE No. 9 are
classified as follows:
Invested in Capital Assets - represents the ROE No. 9’s total investment in capital assets.
There is no outstanding debt related to these assets at this time.
Restricted Net Assets - represent resources in which the ROE No. 9 is legally obligated to
spend in accordance with restrictions imposed by enabling legislation.
Unrestricted Net Assets - represent resources used for transactions relating to the general
operations of the ROE No. 9 and may be used at the discretion of management to meet
expenses for any purpose.
39
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
When both restricted and unrestricted resources are available for use, it is the ROE’s
policy to use restricted resources first, then unrestricted resources as they are needed. For
unrestricted fund balance, committed funds are used first, then assigned funds, then
unassigned if any.
The Statement of Activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Program revenues include
(1) charges to users who purchase, use or directly benefit from goods, services, or
privileges provided by a given function or segment, and (2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or
segment. Items not properly included among program revenues are reported instead as
general revenues.
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.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The financial statements of the ROE No. 9 are prepared in accordance with generally
accepted accounting principles (GAAP). The government-wide financial statements and
the proprietary fund 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. Grants and similar revenues are recognized as soon as all eligibility
requirements imposed by the provider have been met.
Governmental funds financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized when they are both measurable and available. “Measurable” means the
amount of the transaction can be determined and “available” means collectible within the
current period or soon enough thereafter to be used to pay liabilities of the current period.
The ROE No. 9 considers revenues as available if they are collected within 60 days after
year end. Revenues received more than 60 days after the end of the current period are
deferred in the governmental fund financial statements but are recognized as current
revenues in the government-wide financial statements.
There are, however, essentially two types of these revenues: (1) monies must be
expended on the specific purpose or project before any amounts will be paid; therefore,
revenues are recognized based upon the expenditures recorded, and (2) monies are
virtually unrestricted as to purpose of expenditure and are usually revocable only for
40
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
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. In applying the susceptible to accrual concept to intergovernmental revenues,
the legal and contractual requirements of the numerous individual programs are used as
guidance.
Expenditures are recognized in the accounting period in which the fund liability is
incurred, if measurable, except expenditures for compensated absences and other long-term
obligations, which are recognized when paid.
Agency funds financial statements are reported using the accrual basis of accounting, but
due to their custodial nature (assets equal liabilities) do not present results of operations
or have a measurement focus.
The proprietary fund financial statements include local workshops fund and internal
service fund. The proprietary fund distinguishes operating revenues and expenses from
nonoperating items. Operating revenues and expenses generally result from providing
services and producing and delivering goods in connection with a proprietary fund’s
principal ongoing operations. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
As a general rule, the effect of inter-fund activities has been eliminated in the
government-wide financial statements. In the Statement of Activities, interfund
transactions between internal service fund and governmental funds have been eliminated.
Internal service balances, except those representing balances between governmental
funds and internal service fund, have been combined with the governmental activities in
the Statement of Net Assets.
D. Fund Accounting
The accounts of the ROE No. 9 are organized on the basis of funds, each of which is
considered a separate accounting entity. The operations of each fund are accounted for
with a separate set of self-balancing accounts that comprise its assets, liabilities, fund
balance, revenue, and expenditures. The ROE No. 9 maintains individual funds as
required by the State of Illinois. The resources are allocated to and accounted for in
individual funds based upon the purposes for which they are to be spent and the means by
which spending activities are controlled. The various funds are summarized by type in
the basic financial statements. The following summarizes the fund types used:
41
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Government Fund Types
Governmental Funds are those through which most governmental functions are financed.
The acquisition, use and balances of the expendable financial resources and the related
current liabilities are accounted for through governmental funds.
The governmental funds include the following:
General Fund - Accounts for all financial resources except those required to be
accounted for in another fund. It accounts for monies received for, and payment of,
expenditures in connection with general administrative activities.
General Operations - Accounts for monies received for, and payment of,
expenditures for the general administration of the ROE No. 9 operations.
Essay Scoring - Accounts for local receipts and expenses in administering and
scoring of GED essays for the school districts.
School Family Liaison Local Fund - Accounts for monies received for, and
payment of, expenditures for a program that assists with the treatment of child
abuse victims and helps prevent child abuse situations. This fund was previously
reported in prior year as ISBE/DCFS Interagency Technical Assistance Network.
Regional Education Alternative for Developing Youth - Accounts for grant
monies and local fees received for, and payment of, expenditures to administer an
alternative school program for at-risk students in grades 6-12. The READY fund
also includes the school breakfast program, national school lunch program,
Workforce Investment Act (WIA) Youth program and the Education Jobs Fund
program funded by the American Recovery and Reinvestment Act (ARRA). In
addition, the READY program is funded by the General State Aid.
Novice Teacher Support - Accounts for monies received for, and payment of,
expenditures for a program that provides beginning teachers with practical
strategies for dealing with early career challenges, resources, and a network of
colleagues who are also entering the teaching profession.
Summer Freedom School - Accounts for monies received for, and payment of,
expenditures for summer literacy program designed by the Children’s Defense
Fund to promote cultural and social pride, and to motivate youth to read. Youth
read and engage in literacy activities on a daily basis and participate in afternoon
rotation activities and field trips both in and out of the community and State.
42
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
IL Learning Technology Purchase Program - Accounts for monies received for,
and payment of, expenditures for a fund created as a consortium of Learning
Technology Centers, Regional Offices of Educations and school districts to
purchase software, hardware and peripherals at competitive pricing from
accredited suppliers. This fund was previously reported in the prior year under
the Area IV Learning Technology Hub Fund.
Special Revenue Funds - Accounts for grant monies received for, and payment of,
expenditures for the proceeds of specific revenue sources (other than those accounted
for in the Fiduciary Funds) that are restricted to expenditures for specified purposes.
The special revenue funds include the following:
Education - Accounts for various grants supporting education enhancement
programs. Education funds include:
Truants Alternative/Optional Education - Accounts for grant monies received
for, and payment of, expenditures for a program that offers prevention and
intervention services to truant students. Program activities include case
management, home and school visits, student advocacy, wraparound, referrals
to community agencies, and technical assistance to individual school districts
and the community.
Title I Reading First Part B SEA - Accounts for grant monies received for,
and payment of, expenditures for a program that provides technical assistance
and professional development opportunities to support Reading First districts
and primary reading instruction.
Department of Children & Family Services (DCFS) Grant - Accounts for
grant monies received from the DCFS which is used for the payment of
program expenditures for the treatment of child abuse victims and helps
prevent child abuse situations.
McKinney-Vento Homeless Children & Youth Program - Accounts for grant
monies received for, and payment of, expenditures for federal statewide grant
under McKinney-Vento Homeless Children and Youth Program. This
program provides assistance to schools who work with the homeless youth.
Teacher Mentoring - Accounts for grant monies received for, and payment of,
expenditures for ISBE funded projects in the State that focus on the support
and development of new teachers. The program provides mentoring strategies
to veteran teachers, who in turn also provide trainings to new teachers.
Program activities include assistance in classroom management and
improvement strategies.
43
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Title I School Improvement and Accountability - Accounts for grant monies
received for, and payment of, expenditures for one of three Regional System
of Support Projects (RESPRO) funded by ISBE and passed through the
Iroquois-Kankakee Regional Office of Education No. 32. The grant supports
the schools and school districts which are in academic status and have not met
the required annual yearly progress for two or more years. Program activities
include assistance in setting up school improvement plans and monitoring the
status of school improvement plans.
IVPA-SEL Grant - Accounts for grant monies received for, and payment of,
expenditures for technical assistance funded by ISBE but administered by the
Illinois Violence Prevention Authority. The grant supports the
implementation for Social/Emotional Learning (SEL) by local school districts
who have been awarded program implementation grants. This is done through
area trainings and technical assistance.
Freedom School Grant - Accounts for grant monies received for, and payment
of, expenditures for program that provides safe, restorative learning spaces
that operate for six weeks during the summer for seven hours per day.
Teen Reach Grant - Accounts for grant monies received for, and payment of,
expenditures for program that expands the range of choices and opportunities
that enable, empowers and encourages youth to achieve positive growth and
development, improves expectations and capacities for future success, and
avoids and/or reduces risk-taking behavior.
ISBE CMAR - Accounts for grant monies received for, and payment of,
expenditures for program that provides consultants who are contracted to do
compliance monitoring and provider application reading for the Supplemental
Educational Services program under Title I, Part A, of the No Child Left
Behind Act of 2001.
Gifted Education - Accounts for grant monies received for, and payment of,
expenditures for program that provides instructional materials to schools,
technical assistance, and resources from in-service activities for participating
schools and their representatives. The activities of this program include in-service
activities for gifted coordinators and other teachers.
Youth Detention Center - Accounts for monies received from the Urbana
School District No. 116 to provide an educational program for the students
serving time at the Juvenile Detention Center.
44
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Migrant Education Program - Accounts for grant monies received for, and
payment of, expenditures for program designed to operate in four of the ROE
No. 9’s districts that are most impacted by the social, emotional and academic
needs of migrant students. This program provides a migrant advocate to
improve communication between the schools and families, and promote
academic success and social progress of migrant students.
21st Century Grant - Accounts for grant monies received for, and payment of,
expenditures for program that provides academic enrichment opportunities
during non-school hours for high school students who attend high-poverty and
low-performing schools. This program helps students meet State and local
student standards in core academic subjects; offers students a broad array of
enrichment activities that can complement their regular academic programs;
and offers literacy and other educational services to the families of
participating children.
Schoolworks Operations - Accounts for a grant that provides professional
development and training for teachers and administrators in Champaign, Ford
and Vermilion Counties in the areas of gifted education, school improvement,
staff development, and technology through workshops, study groups, on-site
training, phone assistance, and consultation.
Area IV Learning Technology Hub - LTC Grant - Accounts for the grant
monies received for, and payment of, expenditures for programs that provide
assistance to local districts and schools for the implementation and support of
a comprehensive system that effectively uses technology in schools to
improve student academic achievement.
System of Support - Accounts for the grant monies received for, and payment
of, expenditures to provide support for Title I schools in their year 1 and year
2 improvement status.
ARRA - Title 1 School Improvement and Accountability - Accounts for grant
monies received for, and payment of, expenditures used to minimize the
impact of school improvement budget cuts at the state level. This is funded
by the American Reinvestment and Recovery Act (ARRA). This fund assists
school districts who have not met AYP in planning, professional development,
data analysis and in implementing school improvement and corrective action
in order to improve instruction in an effort to meet AYP in subsequent years.
Nonmajor Special Revenue Funds - Accounts for the proceeds of specific revenue
sources (other than fiduciary or major capital projects) that are legally restricted to
45
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
expenditures for specified purposes. Non-major special revenue funds include the
following:
General Education Development (GED) - Accounts for the receipts and
expenses pertaining to the GED/High School Equivalency program for high
school dropouts.
School Bus Driver Training - Accounts for State and local receipts and
expenses as a result of training school district bus drivers.
Institute Fund - Accounts for teacher certificate registrations, issuance and
evaluation fees for processing certificates, and expenses for meetings of a
professional nature. All funds generated remain restricted until expended only
on the aforementioned activities.
Proprietary Fund Types
Proprietary funds are those in which revenues and expenses related to services provided
to other entities, as well as to other funds within the ROE No. 9 are reported. The ROE
No. 9 reports the following enterprise fund:
Local Workshops - Accounts for monies received from registration fees for trainings
and workshops conducted by the ROE No. 9 for the school district administrators and
professionals. This fund also includes LTC Workshop which was previously reported
in the prior year under the Area IV Learning Technology Hub Fund.
Nonmajor Enterprise Fund - Nonmajor enterprise fund consists of:
HR Solutions (Tomlinson) - Accounts for monies received from participating
school districts which are used to provide technical assistance and training on
human resources issues.
The ROE No. 9 reports the following internal service fund:
Internal Service Fund - Accounts for the general accounting services and other
expenses provided to other operating areas and programs of the ROE No. 9 on a cost-reimbursement
basis.
Fiduciary Fund Types
Fiduciary Funds are used to account for assets held in a trustee capacity or as an agent for
individuals or private or governmental organizations. The Fiduciary Funds include the
following:
46
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Distributive Fund - Accounts for State and federal funds appropriated to the Rural
Champaign Co. Special Education Center and to entities which are paid through the
ROE No. 9. Funds are received and disbursed to these entities and accounted for in a
trustee capacity.
Payroll Clearing - This fund receives money from other funds to pay for the payroll
expenses of the ROE No. 9 and the Rural Champaign Co. Special Education Coop.
Regional Board of Trustees - This fund accounts for the monies received from, and
disbursed for the activities of the Regional Board of Trustees.
County School Facility Sales Tax - This fund accounts for monies received from the
Champaign County representing 1% of the county’s sales tax revenues. In
accordance with the School Code 105 ILCS 5/3-14.31, proceeds from the sales tax
revenues are distributed to the school districts in Champaign County based on student
enrollment.
E. Revenues - Exchange and Non-exchange Transactions
Revenue resulting from exchange transactions, in which each party gives and receives
essentially equal value, is recorded on the accrual basis when the exchange takes place.
On a modified accrual basis, revenue is recorded in the fiscal year in which the resources
are measurable and become available.
Non-exchange transactions, in which the ROE No. 9 receives value without directly
giving value in return, include grants and donations. On an accrual basis, revenue from
grants and donations is recognized in the fiscal year in which all eligibility requirements
have been satisfied. Eligibility requirements include timing requirements, which specify
the year when the resources are required to be used or the fiscal year when use is first
permitted, matching requirements, in which the ROE No. 9 must provide local resources
to be used for specific purpose, and expenditure requirements, in which the resources are
provided to the ROE No. 9 on a reimbursement basis. On a modified accrual basis,
revenue from non-exchange transactions must be available before it can be recognized.
F. Cash and Investments
Cash and cash equivalents consist of cash on deposit. Investments with an original
maturity of three months or less at the time they are purchased by the ROE No. 9 are
considered to be cash equivalents, while investments with original maturities of more
than three months are reported as investments.
47
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
G. Capital Assets
Capital assets purchased or acquired with an original cost of $500 or more and estimated
useful lives of greater than two years 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. Capital assets are depreciated using the straight-line method over the
estimated useful lives (3 to 20 years) of the respective assets.
H. Deferred Revenues
The ROE No. 9 reports deferred revenue in the governmental fund Balance Sheet.
Deferred revenue arises when potential revenue does not meet both the measurable and
available criteria for recognition in the current period.
I. Management Estimates
The preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect certain reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
J. Revenue from Federal and State Grants
Revenues from federal and State grant awards are recorded net of the amount due to the
State or federal agency for the unused portion of the grant or the amount carried over to
the following fiscal year project. Amounts due to the State or federal agency are carried
over to the following year project and are recorded as liabilities.
K. Budgetary Data
The ROE No. 9 did not formally adopt a budget for the year ended June 30, 2011 and is
not legally required to do so. The ISBE requires budgets for certain State and federal
programs. These budgets were used to prepare Budgetary Comparison Schedules for the
following programs:
General Fund:
 Regional Education Alternative for Developing Youth
Special Revenue Funds:
 Education Fund:
 Truants Alternative/Optional Education
 Teacher Mentoring
48
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
 Migrant Education Program
 21st Century Grant
 Schoolworks Operations
 Area IV Learning Technology Hub - LTC Grant
 ARRA - Title I School Improvement and Accountability
L. Interest Revenue
Interest earned on the Distributive Fund (a fiduciary fund) by ROE No. 9 on ISBE
receipts is allocated and distributed semi-annually to recipients.
M. Compensated Absences
Non-certified and certified employees who work 12 calendar months earn up to 20
vacation days for a full year of service. The accumulated total of vacation days may
never exceed 30 days. In the event that a program terminates, no vacation days will be
honored past the ending date of the program. Certified employees who work less than 12
calendar months per year do not earn vacation days. Any accruals as of June 30th are
considered immaterial by management and not reflected in the basic financial statements.
Employees receive up to 12 sick days annually and the unused portion is accumulated up
to 180 days 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.
N. New Accounting Pronouncements
In 2011, the ROE No. 9 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 ROE No.
9 adopted these standards during the year, however, GASB Statements 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
additional disclosures on how fund balance constraints are imposed and may be modified
or eliminated.
49
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
O. Governmental Fund Balances
Fund balance is the difference between assets and liabilities in a governmental fund. The
following types of fund balances may be presented in the Governmental Funds Balance
Sheet and Governmental Funds Combining Schedule of Accounts:
Nonspendable - This consists of amounts that cannot be spent because they are either a)
not in spendable form or b) legally or contractually required to be maintained intact.
There were no nonspendable fund balances as of June 30, 2011.
Restricted - This consists of amounts that are restricted to specific purposes, that is, when
constraints placed on the use of resources are either a) externally imposed by creditors,
grantors, contributors, or laws or regulations of other governments or b) imposed by law
through constitutional provisions or enabling legislation. The following funds comprise
restricted fund balances as of June 30, 2011: McKinney-Vento Homeless Children &
Youth Program, Youth Detention Center, General Education Development, School Bus
Driver Training and Institute Fund.
Committed - This consists of amounts with self-imposed constraints or limitations that
have been place at the highest level of decision making. There were no committed fund
balances as of June 30, 2011.
Assigned - This consists of net amounts that are constrained by the ROE No. 9’s intent to
be used for specific purposes, but that are neither restricted nor committed. The
following funds comprise assigned fund balances as of June 30, 2011 and are specified
for a particular purpose by the Regional Superintendent: Essay Scoring, Regional
Education Alternative for Developing Youth (READY), Novice Teacher Support,
Summer Freedom School, and IL Learning Technology Purchase Program.
Unassigned - This consists of amounts that are available financial resources and are not
designated for a specific purpose. The following funds comprise unassigned fund
balances as of June 30, 2011: General Operations, School Family Liaison Local Fund,
Teacher Mentoring, Teen Reach Grant, Schoolworks Operations, and Area IV Learning
Technology Hub - LTC Grant.
NOTE 2 - CASH AND CASH EQUIVALENTS
Deposits
The ROE No. 9 maintains different bank accounts for its various activities. At
June 30, 2011, the total carrying amount of such accounts is $3,327,359, and the total bank
balance is $3,977,360. The difference between the above amounts primarily represents
50
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
checks that have been issued but have not yet cleared the bank as of June 30, 2011. The total
bank balance of $3,977,360 as of June 30, 2011 was secured by federal depository insurance.
NOTE 3 - DUE FROM (TO) OTHER GOVERNMENTAL AGENCIES
The ROE No. 9’s Special Revenue Funds, Proprietary Funds, and Fiduciary Funds have
funds due from/to the following governmental agencies:
Due from Other Governmental Agencies:
Illinois State Board of Education $ 418,471
Illinois Department of Human Services 79,958
Iroquois/Kankakee Regional Office of Education No. 32 109,132
Urbana School District No. 116 83,957
Local school districts 102,422
Total $ 793,940
Due to Other Governmental Agencies:
Illinois State Board of Education $ 536,210
Illinois Department of Human Services 443
Total $ 536,653
NOTE 4 - CAPITAL ASSETS
Capital assets activities for the year ended June 30, 2011 are as follows:
Balance
July 1, 2010
(restated) *
Additions Retirements
Balance
June 30, 2011
GOVERNMENTAL FUNDS
Equipment and office furniture $ 620,080 $ 59,882 $ 49,526 $ 630,436
Less: accumulated depreciation 455,567 58,954 (49,526) 464,995
Capital assets, net $ 164,513 $ 928 $  $ 165,441
PROPRIETARY FUNDS
Equipment and office furniture $ 105,977 $  $  $ 105,977
Less: accumulated depreciation 79,525 19,920  99,445
Capital assets, net $ 26,452 $ (19,920) $  $ 6,532
* Beginning balances of governmental funds and proprietary funds were restated due to the
effect of reclassifications. See Note 12 for additional information on these restatements.
51
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Depreciation expense for the year ended June 30, 2011 of $58,954 was charged to the
governmental activities under the instructional services function. For the business-type
activities, depreciation of $19,920 was charged to the enterprise fund - local workshops.
NOTE 5 - LEASES
(a) Capital Lease
The ROE No. 9 has entered into lease agreements as lessee for financing the acquisition of
office equipment and copiers. These lease agreements qualify as a capital lease for
accounting purposes and, therefore, have been recorded at the present value of the future
minimum lease payments as of the inception date in the capital assets account.
The future minimum capital lease obligations and the net present value of these lease
payments as of June 30, 2011, are as follows:
Year Ending June 30 Amount
2012 $ 5,942
2013 5,558
2014 4,406
2015 4,406
2016 1,366
Total minimum lease payment 21,678
Less: amount representing interest 2,018
Present value of minimum lease payments $ 19,660
(b) Operating Lease
The ROE No. 9 is committed under lease agreements for various classroom and office
spaces for its Regional Education Alternative for Developing Youth (READY) School
and Illinois Technical Assistance Network (ITAN) programs.
Future minimum lease rentals are as follows:
Year Ending June 30 Amount
2012 $ 157,428
2013 157,428
2014 157,428
2015 157,428
Thereafter 682,188
Total $ 1,311,900
52
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 6 - DEFICIT FUND BALANCES
The following funds have deficit fund balances as of June 30, 2011:
Education Fund:
Teacher Mentoring $ 2,307
Teen Reach Grant 21,235
Schoolworks Operations 7,833
Area IV Learning Technology Hub - LTC Grant 8,221
Total Deficit Fund Balances $ 39,596
Above deficit fund balances are expected to be reversed in the next fiscal year through
payments from the State, receipts from local sources and interest income. The deficit
balances are due to the provision of GASB Statement No. 33, Accounting and Financial
Reporting for Nonexchange Transactions, which require that grant revenue can only be
recognized when collected during the fiscal year or collected soon after the end of the fiscal
year to be available to pay the liabilities of the current fiscal period.
NOTE 7 - ON BEHALF PAYMENTS
The salaries of the Superintendent and Assistant Superintendent of ROE No. 9 are paid for by
the State of Illinois and Teachers Retirement System (TRS) contributions are paid by the
State of Illinois, in accordance with applicable State of Illinois law.
The breakdown of the on-behalf payments is as follows:
Regional Superintendent’s salary $ 100,762
Regional Superintendent’s fringe benefits
(includes State paid insurance) 21,879
Assistant Regional Superintendent’s salary 90,686
Assistant Regional Superintendent’s fringe benefits
(includes State paid insurance) 16,985
TRS pension contributions 465,985
THIS OPEB contributions 16,067
Total $ 712,364
Salary and benefit data for the Regional Superintendent and Assistant Regional
Superintendent was calculated based on data provided by the ISBE. The fringe benefits
amounts include State paid insurance. These amounts have been recorded in the
accompanying financial statements as on-behalf revenues and expenditures.
53
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 8 - EMPLOYEE RETIREMENT SYSTEM AND PENSION PLANS
Teachers’ Retirement System of the State of Illinois
The ROE No. 9 participates in the Teachers’ Retirement System of the State of Illinois
(TRS). TRS is a cost-sharing multiple-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 the primary responsibility for funding 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
January 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 9.4
percent for the years ended June 30, 2010 and 2009.
The State of Illinois makes contributions directly to TRS on behalf of the ROE No. 9’s TRS-covered
employee.
 On-behalf contributions to TRS. The State of Illinois makes employer pension
contributions on-behalf of the ROE No. 9. For the year ended June 30, 2011, the State of
Illinois contributions were based on 23.10 percent of creditable earnings not paid from
federal funds, and the ROE No. 9 recognized revenue and expenditures of $465,985 in
pension contributions that the State of Illinois paid directly to TRS. For the years ended
June 30, 2010 and June 30, 2009, the State of Illinois contribution rates as percentages of
creditable earnings not paid from federal funds were 23.38 percent ($1,000,003) and
17.08 percent ($570,202), respectively.
The ROE No. 9 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 $10,590. Contributions for the years ended
June 30, 2010 and June 30, 2009, were $23,704 and $21,865, respectively.
 Federal and special trust fund contributions. When TRS members are paid from
federal and special trust funds administered by the ROE No. 9, there is a statutory
54
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
requirement for the ROE No. 9 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 $207,561 were paid from federal and special trust funds that required employer
contributions of $47,946. For the years ended June 30, 2010 and June 30, 2009, required
ROE No. 9 contributions were $98,038 and $73,687, respectively.
 Early retirement option (ERO). The ROE No. 9 is also required to make one-time
employer contributions to TRS for members retiring under the ERO. The payments vary
depending on the age and salary of the member.
The maximum employer contribution is 117.5 percent and applies when the member is
age 55 at retirement.
For the year ended June 30, 2011, the ROE No. 9 paid $0 to TRS for employer
contributions under the ERO program. For the years ended June 30, 2010 and
June 30 2009, the ROE No. 9 paid $0 in employer ERO contributions.
 Salary increases over 6 percent and excess sick leave. If an employer grants salary
increases over 6 percent and those salaries are used to calculate a retiree’s final average
salary, the employer 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 increases of up to 6 percent. For the year ended June 30, 2011, the ROE
No. 9 paid $0 to TRS for employer contributions due on salary increases in excess of 6
percent. For the years ended June 30, 2010 and 2009, the ROE No. 9 did not have any
payments to TRS for employer contributions due on salary increases in excess of 6
percent.
If an employer grants sick leave days in excess of the normal annual allotment and those
days are used as TRS service credit, the employer 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 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 ROE No. 9 paid $0 to TRS
for sick leave days granted in the excess of the normal annual allotment. For the years
ended June 30, 2010 and 2009, the ROE No. 9 did not have any payments to TRS for sick
leave days granted in excess of the normal annual allotment.
55
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
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, 2815 West Washington
Street, PO Box 19253, Springfield, Illinois 62794-9253. The most current report is also
available on the TRS web site at trs.illinois.gov.
Illinois Municipal Retirement Fund
Plan Description
The ROE No. 9’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 ROE No. 9’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.
Funding Policy
As set by statute, the ROE No. 9’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 annual required contribution rate for calendar year 2010
was 11.50 percent. The ROE No. 9 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
The required contribution for calendar year 2010 was $243,431.
THREE-YEAR TREND INFORMATION
Calendar Year
Ending
Annual Pension
Cost (APC)
Percentage of
APC Contributed
Net Pension
Obligation
12/31/10 $ 243,431 100% $ 
12/31/09 169,522 100% 
12/31/08 153,373 100% 
56
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
The required contribution for 2010 was determined as part of the December 31, 2008,
actuarial valuation using the entry age normal actuarial cost method. The actuarial
assumptions at December 31, 2008, included (a) 7.5 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% 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 ROE No. 9’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 ROE No. 9’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
82.95 percent funded. The actuarial accrued liability for benefits was $3,911,362 and the
actuarial value of assets was $3,244,594, resulting in an underfunded actuarial accrued
liability (UAAL) of $666,768. The covered payroll for the calendar year 2010 (annual
payroll of active employees covered by the plan) was $2,116,788 and the ratio of the UAAL
to the covered payroll was 31 percent.
The schedule of funding progress, presented as RSI following the notes to the financial
statements, presents 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 9 - OTHER POSTEMPLOYMENT BENEFITS
Defined Benefit Plan - Health Alliance
Plan Description
The ROE No. 9 provides postemployment health care for eligible retired employees and their
dependents through a multiple-employer defined benefit plan. The benefits, benefit levels,
employee contributions and employer contributions are governed by the ROE No. 9, and can
be amended through its personnel manual and employee contracts. An irrevocable trust has
not been established to account for the plan and accordingly, the plan is not accounted for as
a trust fund. The plan does not issue a separate report.
57
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Benefits Provided
The ROE No. 9 provides postemployment health care for eligible retired employees and their
dependents. Employees who terminate after meeting the age and service requirements for
retirement are eligible to continue their health care plan coverage by paying the monthly
premium rate. The benefit levels are the same as those afforded to active employees. The
benefits include general outpatient and inpatient medical services and prescriptions. Because
the actuarial cost of health benefits for the retirees exceeds the average amount paid by
retirees, the additional cost is paid by the ROE No. 9 and is the basis for OPEB obligation
accounted for under GASB Statement No. 45.
Membership
At June 30, 2011, membership consisted of:
Retirees and beneficiaries receiving benefits 1
Terminated plan members entitled to but not
yet receiving benefits 
Active vested plan members 22
Active nonvested plan members 29
Total 52
Number of participating employers 1
Funding Policy
The Regional Superintendent of the ROE No. 9 negotiates the contribution percentages
between the ROE No. 9 and her employees through the employee contracts and the personnel
policy. All retirees contribute 100% of the blended premium to the plan and the ROE No. 9
contributes the remainder to cover the cost of providing the benefits to the retirees via the
insured plan (pay-as-you-go). GASB Statement No. 45 requires recognition of the current
expense of OPEB based on each governing body’s annual required contribution, but does not
require funding of the related liability. As of June 30, 2011, the ROE No. 9 has chosen not to
fund the liability.
Annual OPEB Cost and Net OPEB Obligation
The ROE No. 9’s annual OPEB cost is calculated based on the annual required contribution
(ARC). The ARC represents the normal cost each year and an amount to amortize the
unfunded actuarial liability over a period of thirty years.
58
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Trend Data
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment, mortality, and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future. The schedule of funding
progress, presented as required supplementary information following the notes to the
financial statements, presents multiyear trend information about whether the actuarial value
of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities
for benefits.
Components of Net OPEB Obligation and Expense
Item
Amount as of
June 30, 2010 *
Annual Required Contribution $ 6,506
Interest on Net OPEB obligation 
Adjustment to annual required contribution 
Annual OPEB cost 6,506
Contributions made (2,424)
Increase in net OPEB obligation 4,082
Net OPEB obligation - beginning of year 
Net OPEB obligation - end of year $ 4,082
* latest available information
Schedule of Contributions, OPEB Costs and Net Obligations
Fiscal Year
Ended
Annual OPEB
Cost
Percentage of Annual
OPEB Cost Contributed
Net OPEB
Obligation
06/30/10 * $6,506 37.25% $ 4,082
Funded Status and Funding Progress
As of June 30, 2010, the actuarial accrued liability for benefits was $42,813. The covered
payroll was approximately $2,209,155, and the ratio of the unfunded actuarial accrued
liability to the covered payroll was 1.94%.
59
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Actuarial Method and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan understood by the employer and plan members) and include the benefits provided at the
time of each valuation and the historical pattern of sharing of benefit costs between the
employer and plan members.
In the actuarial valuation for the fiscal year ended June 30, 2010, the entry age normal cost
method was used. The actuarial assumptions included an annual healthcare cost trend rate of
8% initially, reduced to an ultimate rate of 6% after five years. Rates include a 3% general
inflation assumption. The Unfunded Accrued Liability is being amortized as a level dollar
amount on a closed basis over 30 years. A discount (interest) rate of 5% was used, as well as
a salary progression rate of 5% per year.
Teacher Health Insurance Security Fund
The ROE No. 9 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 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 cost-sharing 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 to 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 to THIS Fund. The State of Illinois makes employer retiree
health insurance contributions on-behalf of the ROE No. 9. 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. The State of Illinois contributions
were $16,067, and the ROE No. 9 recognized revenue and expenditures of this amount
60
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
during the year. State contributions intended to match active member contributions
during the year ended June 30, 2010 were 0.84 percent of pay. State contributions on
behalf of ROE No. 9 for the year ended June 30, 2010 was $35,939. Had the ROE No. 9
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 $29,651.
 Employer contributions to THIS Fund. The ROE No. 9 also makes contributions to
THIS Fund. The ROE No. 9 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 June
30, 2009. For the year ended June 30, 2011, the ROE No. 9 paid $25,983 to the THIS
Fund. For the years ended June 30, 2010 and June 30, 2009, the ROE No. 9 paid $25,748
and $21,032 to the THIS Fund, respectively, which was 100 percent of the required
contribution.
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 Avenue, Springfield, IL 62763-
3838.
NOTE 10 - RISK MANAGEMENT
The ROE No. 9 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 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.
61
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 11 - INTERFUND TRANSFERS
(a) Due From (To) Other Funds
As of June 30, 2011, amounts due from (to) other funds consist of the following:
Fund
Due From
Other Funds
Due To
Other Funds
General Fund:
School Family Liaison Local Fund $  $ 788
IL Learning Technology Purchase Program 65,623 
Education Fund:
Truants Alternative/ Optional Education  41,990
Department of Children & Family Services Grant  15,123
Teacher Mentoring  20,307
Title I School Improvement and Accountability  109,132
Freedom School Grant 15,123 
Teen Reach Grant 788 65,623
Schoolworks Operations  46,993
Area IV Learning Technology Hub - LTC Grant  98,894
ARRA Title I School Improvement and Accountability  87,837
Enterprise Fund - Local Workshops 405,153 
Total $ 486,687 $ 486,687
The amounts due from (to) other funds resulted from interfund borrowing to cover short-term
cash deficit.
(b) Transfers From (To) Other Funds
The composition of interfund transfers during FY 2011 is as follows:
Fund Transfer-in Transfer-out
General Fund - General Operations $  $ 34,377
Education Fund - Schoolworks Operations 34,377 
Total $ 34,377 $ 34,377
In FY 2011, the ROE No. 9 made interfund transfers to move a portion of unrestricted
general fund to a special revenue fund. This was done to cover operating expenditures.
62
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 12 - RECLASSIFICATION
As a result of implementing GASB Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, at June 30, 2011, the LTC Workshop (which was
under the Area IV - Learning Technology Hub Fund), previously reported under the general
fund has been reclassified to the proprietary fund. The HR Solutions (Tomlinson) under the
education fund also, has been reclassified under the proprietary fund.
The Schoolworks Operations and the LTC Grant (which was under the Area IV - Learning
Technology Hub Fund) have been reclassified to the Education Fund. These funds have been
historically reported in the General Fund. However, because funds for these programs are
governed by grant agreement with the grantor, the funds are restricted and are required to be
reported as special revenue funds.
The Regional Education Alternative for Developing Youth (READY) Fund, which includes
the General State Aid, has been reclassified. The General State Aid, as well as funding from
local sources primarily supports the READY program. Because the unrestricted funds from
the General State Aid and from local sources, are the primary sources of funding for the
current year, the READY Fund has been reclassified from the Education Fund to the General
Fund.
In addition, School Family Liaison Local Fund (previously, the ISBE Interagency Technical
Assistance Network), the Novice Teacher Support and the Summer Freedom School were
reclassified to the General Fund because they do not meet the definition of a special revenue
fund.
The reclassifications had the following effect on the beginning fund balance for the General
Fund, Education Fund, and on the beginning net assets for the Proprietary Fund.
Statement of Activities
Governmental
Activities
Net Assets, July 1, 2010 $ 2,061,573
Reclassification of HR Solutions (Tomlinson) (3,504)
Reclassification of Area IV - Learning Technology Hub
- LTC Workshop (152,436)
Reclassification of Area IV - Learning Technology Hub
- LTC Workshop Property and Equipment (21,274)
Beginning Net Assets, July 1, 2010, Reclassified $ 1,884,359
63
CHAMPAIGN/FORD COUNTIES REGIONAL OFFICE OF EDUCATION NO. 9
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
Statement of Activities
Business-Type
Activities
Net Assets, July 1, 2010 $ 511,440
Reclassification of HR Solutions (Tomlinson) 3,504
Reclassification of Area IV - Learning Technology Hub
- LTC Workshop 152,436
Reclassification of Area IV - L