FY11-ROE26-Fin-Full

              STATE OF ILLINOIS
HANCOCK/MCDONOUGH
REGIONAL OFFICE OF EDUCATION # 26
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
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
TABLE OF CONTENTS
PAGE
Officials........................................................................................................................ 4
Compliance Report Summary....................................................................................... 5
Financial Statement Report Summary .......................................................................... 6
Independent Auditors’ Report ...................................................................................... 7-8
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 ………………… 9-10
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...... 11-12
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
AND CORRECTIVE ACTION PLAN
Schedule of Findings and Questioned Costs
Section I – Summary of Auditor’s Results ............................................................. 13-14
Section II – Financial Statement Findings .............................................................. 15-16
Section III – Federal Award Findings..................................................................... 17
Corrective Action Plan for Current Year Audit Findings............................................. 18
Summary Schedule of Prior Audit Findings................................................................. 19
MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis ........................................................................... 20-27
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets .......................................................................................... 28
Statement of Activities............................................................................................ 29
Fund Financial Statements
Governmental Funds – Balance Sheet .................................................................... 30
Governmental Funds – Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets .......................................................................... 31
Governmental Funds – Statement of Revenues, Expenditures, and
Changes in Fund Balances ................................................................................ 32
Governmental Funds – Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances to the Statement of Activities ......................... 33
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
TABLE OF CONTENTS
BASIC FINANCIAL STATEMENTS – CONTINUED
Proprietary Funds – Statement of Net Assets ......................................................... 34
Proprietary Funds – Statement of Revenues, Expenses and
Changes in Fund Net Assets ............................................................................. 35
Proprietary Funds – Statement of Cash Flows........................................................ 36
Fiduciary Funds – Statement of Fiduciary Net Assets............................................ 37
Notes to Financial Statements....................................................................................... 38-58
REQUIRED SUPPLEMENTARY INFORMATION
(Other than Management’s Discussion and Analysis)
Illinois Municipal Retirement Fund Schedule of Funding Progress............................. 59
OTHER SUPPLEMENTARY INFORMATION
General Fund Accounts:
Combining Schedule of Accounts .......................................................................... 60
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances ................................................................................ 61
Education Fund Accounts:
Combining Schedule of Accounts .......................................................................... 62-67
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances ................................................................................ 68-73
Budgetary Comparison Schedules ....................................................................... 74-82
Nonmajor Special Revenue Funds:
Combining Balance Sheet....................................................................................... 83
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances........................................................................... 84
Nonmajor Enterprise Funds:
Combining Statement of Net Assets ....................................................................... 85
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Assets .......................................................................... 86
Combining Statement of Cash Flows ..................................................................... 87
Fiduciary Funds
Combining Statement of Fiduciary Net Assets – All Agency Funds ..................... 88
Combining Statement of Changes in Assets and
Liabilities – All Agency Funds ...................................................................... 89
Schedule of Disbursements to School District
Treasurers and Others ....................................................................................... 90
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards............................................................... 91
Notes to Schedule of Expenditures of Federal Awards ................................................ 92
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
OFFICIALS
Regional Superintendent Mr. John Meixner (current and during audit period)
Assistant Regional Superintendent Mr. Eric Bryan (during audit period)
Mr. Gary Eddington (Current)
Offices are located at:
130 South LaFayette Street
Suite 200
Macomb, Illinois 61455
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
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 1 1
Repeated Audit Findings 1 1
Prior recommendations implemented or not repeated 0 0
Details of audit findings are included in a separate report section.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Page Description Finding Type
Findings (Government Auditing Standards)
11-1 15 Controls over Financial Material Weakness
Statement Preparation
Findings and Questioned Costs (Federal Compliance)
None
Prior Audit Findings not Repeated (Government Auditing Standards)
None
Prior Audit Findings not Repeated (Federal Compliance)
None
An informal exit conference was held on November 15, 2011. Those involved included John
Meixner, Regional Superintendent, and Michael Remmele, auditor. The findings and audit
process in general were discussed. Responses to the recommendations were provided by John
Meixner on January 13, 2012.
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
FINANCIAL STATEMENT REPORT
SUMMARY
The audit of the accompanying basic financial statements of Hancock/McDonough Regional
Office of Education #26 was performed by Ginoli & Company Ltd.
Based on their audit, the auditors expressed an unqualified opinion on the Hancock/McDonough
Regional Office of Education #26’s basic financial statements.
GINOLI & COMPANY LTD Certified Public Accountants and Business Consultants
7625 N. University, Suite A, Peoria illinois 61614-8303 I 309 671-2350
Morton Line: 309 266-5923 I Telefax: 309 671-5459 I email@ginolicpa.com I www.ginolicpa.com
INDEPENDENT AUDITORS' REPORT
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the accompanying
financial statements of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the Hancock/McDonough Regional Office of
Education #26, as of and for the year ended June 30, 2011, which collectively comprise the ,
Hancock/McDonough Regional Office of Education #26's basic financial statements as listed in
the table of contents. These financial statements are the responsibility of the Regional Office of
Education #26's management. Our responsibility is to express opinions on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Hancock/McDonough Regional
Office ofEducation #26, 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 Hancock/McDonough Regional Office of Education #26 adopted GASB Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions during the year ended
June 30, 2011. The statement changed the classifications of governmental fund balances and
clarified the definitions of existing fund types. The adoption of this statement had no effect on
any of the Hancock/McDonough Regional Office of Education #26's governmental funds' assets
or liabilities nor was there any effect to the total amount of any of the Hancock/McDonough
Regional Office of Education #26's governmental fund balances as of and for the year ended
June 30, 2011.
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
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In accordance with Government Auditing Standards, we have also issued a report dated
April20, 2012 on our consideration of the Hancock/McDonough Regional Office of Education
#26's internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
The Management's Discussion and Analysis and Illinois Municipal Retirement Fund Schedule of
Funding Progress on pages 20 through 27 and page 59 are not a required part of the basic
financial statements but are supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
'
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Hancock/McDonough Regional Office of Education #26'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 of the Hancock/McDonough Regional
Office of Education #26. 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 all material respects, in relation to the basic financial statements taken as a whole.
Peoria, Illinois
April20, 2012
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GINOLI & COMPANY LTD
Certified Public Accountants
GINOLI & COMPANY LTD Certified Public Accountants and Business Consultants
7625 N. University, Suite A, Peoria illinois 61614-8303 I 309 671-2350
Morton Line: 309 266-5923 I Telefax: 309 671-5459 I email@ginolicpa.com I www.ginolicpa.com
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 Hancock/McDonough Regional Office of Education #26, ,as
of and for the year ended June 30, 2011, which collectively comprise the Hancock/McDonough
Regional Office of Education #26's basic financial statements and have issued our report thereon
dated April20, 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 Hancock/McDonough Regional Office of Education #26 is responsible for
establishing and maintaining effective internal control over fmancial reporting. In planning and
performing our audit, we considered the Hancock/McDonough Regional Office of Education
#26'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, but not for the purpose of
expressing an opinion on the effectiveness of Hancock/McDonough Regional Office of
Education #26's internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of the Regional Office of Education #26's internal control over
financial reporting.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the preceding paragraph and was not designed to identify all deficiencies in the
internal control over financial reporting that might be significant deficiencies or material
weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies,
or material weaknesses have been identified. However, as described in the accompanying
Schedule of Findings and Questioned Costs we identified a certain deficiency in internal control
over financial reporting that we consider to be a material weakness.
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
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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 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. We consider the deficiency described in finding
11-1 in the accompanying Schedule of Findings and Questioned Costs to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Hancock/McDonough Regional
Office qf Education #26'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.
Hancock/McDonough Regional Office of Education #26's response to the finding identified in
our audit is described in the accompanying Schedule of Findings and Questioned Costs. We did
not audit Hancock/McDonough Regional Office of Education #26's response and, accordingly,
we express no opinion on it.
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 organization, Illinois State Board of Education, federal awarding agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified
parties.
Peoria, Illinois
April20, 2012
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GINOLI & COMPANY LTD
Certified Public Accountants
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GINOLI & COMPANY LTD Certified Public Accountants and Business Consultants
7625 N. University, Suite A, Peoria illinois 61614-8303 I 309 671-2350
Morton Line: 309 266-5923 I Telefax: 309 671-5459 I email@ginolicpa.com I www.ginolicpa.com
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
CIRCULARA-133
Honorable William G. Holland
Auditor General
State of Illinois
Compliance
We have audited the Hancock/McDonough Counties Regional Office of Education #26
compliance with the types of compliance requirements described in the OMB Circular A~13.3
Compliance Supplement that could have a direct and material effect on each of the
Hancock/McDonough Counties Regional Office of Education #26's major federal programs, for
the year ended June 30, 2011. The Hancock/McDonough Regional Office of Education #26.'s
major federal programs are identified in the summary of auditor's results section of the
accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements
of laws, regulations, contracts, and grants applicable to each of its major federal programs is the
responsibility of the Hancock/McDonough Regional Office of Education #26's management.
Our responsibility is to express an opinion on the Hancock/McDonough Counties Regional
Office of Education #26'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 Non-Profit Organizations.
Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the Hancock/McDonough
Counties Regional Office of Education #26'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 Hancock/McDonough Counties Regional Office of Education #26's
compliance with those requirements.
In our opinion, the Hancock/McDonough Counties Regional Office of Education #26 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.
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
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Internal Control Over Compliance
Management of the Hancock/McDonough Counties Regional Office of Education #26 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 Hancock/McDonough Counties Regional
Office of Education #26's internal control over compliance with requirements that could have a
direct and material effect on a major federal program to determine the 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 Hancock/McDonough Counties Regional Office of
Education #26's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis.
Our consideration of 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 a material weakness, 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 management, others within
the entity, Illinois State Board of Education, federal awarding agencies and pass-through entities
and is not intended to be and should not be used by anyone other than these specified parties.
Peoria, Illinois
April20, 2012
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GINOLI & COMPANY LTD
Certified Public Accountants
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
Financial Statements
Type of auditor's report issued: unqualified
Internal control over financial reporting:
Material weakness(es) identified? X yes no
Significant deficiency(ies) identified? yes X none reported
Noncompliance material to financial
statements noted? yes X no
Federal Awards
Internal control over major programs:
Material weakness(es) identified? yes X no
Significant deficiency(ies) identified? yes X none reported
Type of auditor's report issued on compliance
for major programs: unqualified
Any audit findings disclosed that are required
to be reported in accordance with Circular
A-133, Section .510(a)? yes X no
Section I -- Summary of Auditor's Results
(unqualified, qualified, adverse, disclaimer)
(unqualified, qualified, adverse, disclaimer)
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
(CONTINUED)
Identification of major programs:
84.215X Teaching American History
McKinney Education for Homeless Children and Youth Cluster
84.387A McKinney Education for Homeless Children- ARRA
84.196A McKinney Education for Homeless Children
Dollar threshold used to distinguish between
Type A and Type B programs: $ 300,000
Auditee qualified as low-risk auditee yes X no n/a
CFDA Number(s) Name of Federal Program or Cluster
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II - FINANCIAL STATEMENT FINDINGS
For The Year Ended June 30, 2011
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FINDING NO. 11-1 - Controls Over Financial Statement Preparation (Repeat of prior years
findings: 10-1, 09-1, 08-1 and 07-1)
Criteria/Specific Requirement:
The Hancock/McDonough Regional Office of Education #26 is required to maintain a system of
controls over the preparation of financial statements in accordance with generally accepted
accounting principles (GAAP). Regional Office 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 that they are free of material
misstatements and include all disclosures as required by the Governmental Accounting Standards
Board (GASB).
Condition:
The Regional Office of Education #26 does not have sufficient internal controls over the
financial reporting process. The Regional Office maintains their accounting records on the
accrual basis for disbursements and the cash basis for receipts. While the Regional Office
maintains controls over the processing of most accounting transactions, there are not sufficient
controls over the preparation of the GAAP based financial statements for management or
employees in the normal course of performing their assigned functions to prevent or detect
financial statement misstatements and disclosure omissions in a timely manner. For example,
auditors, in their review of the Regional Office’s accounting records, noted the following:
• The Regional Office did not have adequate controls over the maintenance of complete
records of accounts receivable, accounts payable, and deferred revenue.
• The Regional Office did not maintain adequate internal controls over the processing of all
financial transactions, and numerous adjustments were required to present financial
statements in accordance with generally accepted accounting principles.
Effect:
Management or 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.
Cause:
According to Regional Office officials, they did not have adequate funding to hire and/or train
their accounting personnel in order to comply with these requirements.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II - FINANCIAL STATEMENT FINDINGS
For The Year Ended June 30, 2011
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Recommendation:
As part of its internal control over the preparation of financial statements, including disclosures,
the Regional Office of Education #26 should implement a comprehensive preparation and /or
review procedure to ensure that the financial statements, including note disclosures, are complete
and accurate. Such procedures should be performed by a properly trained individual(s)
possessing a thorough understanding of applicable generally accepted accounting principles,
GASB pronouncements, and knowledge of the Regional Office of Education's activities and
operations.
Management’s Response:
The Regional Office of Education #26 understands the nature of this finding and realizes that this
circumstance is not unusual in an organization of this size. The Regional Office accepts the degree
of risk associated with this condition because the added expense of seeking additional accounting
expertise to prepare and/or review financial statements would take away from the funds available
to provide educational services for the schools in the region.
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION III – FEDERAL AWARD FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
None for the year ended June 30, 2011.
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Finding No. 11-1 – Controls Over Financial Statement Preparation (Repeat of prior
years finding: 10-1, 09-1, 08-1 and 07-1)
Condition:
The Regional Office of Education #26 does not have sufficient internal controls over the
financial reporting process. The Regional Office maintains their accounting records on
the accrual basis for disbursements and the cash basis for receipts. While the Regional
Office maintains controls over the processing of most accounting transactions, there are
not sufficient controls over the preparation of the GAAP based financial statements for
management or employees in the normal course of performing their assigned functions to
prevent or detect financial statement misstatements and disclosure omissions in a timely
manner. For example, auditors, in their review of the Regional Office’s accounting
records, noted the following:
• The Regional Office did not have adequate controls over the maintenance of
complete records of accounts receivable, accounts payable, and deferred revenues.
• The Regional Office did not maintain adequate internal controls over the
processing of all financial transactions, and numerous adjustments were required
to present financial statements in accordance with generally accepted accounting
principles.
Corrective Action Plan:
The Regional Office of Education #26 understands the nature of this finding and realizes
that this circumstance is not unusual in an organization of this size. The Regional Office
accepts the degree of risk associated with this condition because the added expense of
seeking additional accounting expertise to prepare and/or review financial statements
would take away from the funds available to provide educational services for the schools
in the region.
ANTICIPATED DATE OF COMPLETION:
Undetermined
CONTACT PERSON:
John Meixner, Regional Superintendent
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HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For Year Ended June 30, 2011
Finding
No. Condition Current Status
10-1 Controls over financial statement
preparation Repeated 11-1
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
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The Hancock/McDonough Regional Office of Education #26 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 with the Agency’s financial statements, which follow.
2011 Financial Highlights
General Fund revenues increased from $930,066 (restated) in fiscal year 2010 (FY 10) to
$968,680 in fiscal year 2011 (FY 11). The General Fund expenditures decreased from
$943,465 (restated) in FY 10 to $739,930 in FY 11. The Regional Office experienced an
increase in the General Fund balance from $341,795 at the beginning of FY 11 to a General
Fund balance of $592,696 at the end of FY 11. The General Fund now included the
Alternative Schools Program, which receives general state aid. The FY 10 numbers reflect
this change. FY 11 revenues were up slightly due to the State of Illinois paying FY10
payments during FY 11. FY 11 expenditures were down mainly from lower salary and
benefits. At the end of FY11, this Regional Office was owed a substantial amount from the
State of Illinois.
Using This Annual Report
• Management’s Discussion and Analysis introduces the basic financial statements and
provides an analytical overview of the Office’s financial activities.
• 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
Regional Office of Education #26 as a whole and present an overall view of the
Office's finances.
• The fund financial statements tell how governmental services were financed in the
short term as well as what remains for future spending. Fund financial statements
report the Office’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 essential to a
full understanding of the data provided in the basic financial statements.
• Supplementary information further explains and supports the financial statements with
a comparison of the Office’s detailed information for each category of funds and also
provides detailed information about the non-major funds.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
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Reporting the Regional Office of Education #26 as a Whole
The Statement of Net Assets and the Statement of Activities
The government-wide statements report information about the Regional Office of Education
#26 as a whole using accounting methods similar to those used by private-sector companies.
The Statement of Net Assets includes all of the Hancock/McDonough Regional Office of
Education #26’s 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 Office’s net assets and how they have
changed. Net assets—the difference between the assets and liabilities—are one way to
measure the Office’s health or position.
• Over time, increases or decreases in the net assets can be an indicator of whether the
financial position is improving or deteriorating, respectively.
• To assess the 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.
Fund Financial Statements
The fund financial statements provided detailed information about the Regional Office’s
funds, focusing on its most significant or “major” funds. Funds are accounting devices which
allow the tracking of specific sources of funding and spending on particular programs. Some
funds are required by State law. The Hancock/McDonough Regional Office of Education #26
established other funds to control and manage money for particular purposes.
1) Governmental funds account for a majority of the Office’s services. These focus on
how cash and other financial assets that can be readily converted to cash flow in and
out and 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 Office’s programs. The Office’s governmental funds include: the General
Fund and the Special Revenue Funds.
The governmental fund’s required financial statements include a Balance Sheet and a
Statement of Revenue, Expenditures and Changes in Fund Balances.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
- 22 -
2) Proprietary funds account for services for which the Hancock/McDonough Regional
Office of Education #26 charges fees under a cost-reimbursement method. These fees
cover the costs of certain services and workshops it provides.
The proprietary fund’s required financial statements include a Statement of Net
Assets, a Statement of Revenues, Expenses and Changes in Fund Net Assets, and a
Statement of Cash Flows.
3) Fiduciary funds account for services for which the Hancock/McDonough Regional
Office of Education #26 acts as fiscal agent for individuals and private or
governmental organizations.
The fiduciary funds required financial statements include a Statement of Fiduciary Net
Assets.
A summary reconciliation between the government-wide financial statements and the fund
financial statements is included after each fund financial statement.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of financial position.
The Hancock/McDonough Regional Office of Education #26’s net assets at the end of fiscal
year 2010 totaled $584,939. At the end of fiscal year 2011, the net assets were $866,593.
Net assets related to the Teacher Institute Fund, the Education Funds, and the Non-major
Special Revenue Funds are considered restricted for educational purposes.
The analysis that follows provides a summary of the Office’s net assets at June 30, 2011 and
2010.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
- 23 -
CONDENSED STATEMENT OF NET ASSETS
June 30, 2011 and 2010
Governmental Business-type
Activities Activities Total
ASSETS 2011 2010 2011 2010 2011 2010
Current Assets
Total Current Assets $1,352,547 $1,037,331 $553,735 $583,714 $1,906,282 $1,621,045
Noncurrent Assets
Capital Assets, net of
depreciation 56,809 51,198 49,865 44,523 106,674 95,721
TOTAL ASSETS $1,409,356 $1,088,529 $603,600 $628,237 $2,012,956 $1,716,766
LIABILITIES
Current Liabilities
Total Current Liabilities $618,157 $554,106 $528,206 $544,571 $1,146,363 $1,098,677
Noncurrent Liabilities
Compensated
Absences - 33,150 - - - 33,150
TOTAL LIABILITIES $618,157 $587,256 $528,206 $544,571 $1,146,363 $1,131,827
NET ASSETS
Investments in capital
assets, net of related
debt $ 56,809 $ 51,198 $49,865 $44,523 $106,674 $ 95,721
Unrestricted 588,836 421,881 25,529 39,143 614,365 461,024
Restricted for educational
Purposes 145,554 28,194 - - 145,554 28,194
TOTAL NET ASSETS $791,199 $501,273 $75,394 $83,666 $866,593 $584,939
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
- 24 -
CHANGES IN NET ASSETS
For the Years Ended June 30, 2011 and 2010
Governmental Business-type
Activities Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services $9,563 $ 7,841 $ 781,476 $874,521 $791,039 $ 882,362
Operating grants &
contributions 2,483,607 2,798,427 - - 2,483,607 2,798,427
General Revenues:
Local Sources 496,249 423,114 - - 496,249 423,114
On-behalf payments 341,083 369,751 - 341,083 369,751
Investment income 722 1,020 - - 722 1,020
Total Revenues $3,331,224 $3,600,153 $ 781,476 $874,521 $4,112,700 $4,474,674
Expenses
Salaries $1,125,661 $1,445,599 $ 32,400 $31,400 $1,158,061 $1,476,999
Benefits 429,995 509,004 2,898 3,403 432,893 512,407
Purchased Services 799,947 1,141,850 24,131 9,827 824,078 1,151,677
Supplies and materials 106,586 99,089 724,680 819,801 831,266 918,890
Miscellaneous - - 617 - 617 -
Depreciation 27,887 25,868 5,022 5,588 32,909 31,456
Other objects 317 800 - - 317 800
Transfers-payments to
other governments 209,822 13,341 - - 209,822 13,341
On-behalf payments 341,083 369,751 - - 341,083 369,751
Total Expenses $3,041,298 $3,605,302 $789,748 $870,019 $3,831,046 $4,475,321
Change in net assets $ 289,926 $ (5,149) $ (8,272) $ 4,502 $ 281,654 $ (647)
Net assets-beginning 501,273 506,422 83,666 79,164 584,939 585,586
Net assets-ending $791,199 $ 501,273 $ 75,394 $ 83,666 $866,593 $ 584,939
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
- 25 -
Governmental Activities
For FY 11, revenues for governmental activities were $3,331,224 and expenses were
$3,041,298. The Regional Office of Education #26 determined that the decrease in expense is
due to fewer employees resulting in lower payroll, benefits, and travel costs.
Business-Type Activities
Combined revenue and expense for the Hancock/McDonough Regional Office of Education
#26’s business-type activities decreased net assets by $8,272.
Financial Analysis of the Regional Office of Education #26 Funds
As previously noted, the ROE #26 uses fund accounting to ensure and demonstrate
compliance with finance-related requirements. The Agency’s Governmental Funds report
combined fund balances of $732,166.
Governmental Fund Highlights
• The number of dollars coming from the State of Illinois to the Regional Office of
Education #26 for staff development programs has continued to decrease, impacting
the number of programs that can be offered.
• The timeliness of payments from the State of Illinois to the Regional Office of
Education #26 was deplorable as it was extremely late. This resulted in serious cash
flow issues.
• The state aid accrued to the Regional Office of Education Safe School/Alternative
School Programs has diminished due to decreases in enrollment.
• County support for the Regional Office of Education #26 will increase to $95,206 for
the county fiscal year, which runs from December 2011 through November, 2012.
The previous year’s support from the county totaled $90,440.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
- 26 -
Budgetary Highlights
The Office annually adopts a budget on a basis consistent with U.S. generally accepted
accounting principles when required by the granting agency. The Illinois State Board of
Education reviews the proposed budget and either grants approval or returns it without
approval with comments. Any unapproved budget must be resubmitted to the Illinois State
Board of Education for final approval. The budget may be amended during the year utilizing
procedures prescribed by the Illinois State Board of Education. Schedules showing the
budget amounts compared to the Office’s actual financial activity are included in
supplementary information of this report.
Capital Assets
The value of capital assets increased during FY 2011 due to the addition of new assets that
were higher than the depreciation of capital assets.
Economic Factors and Next Year’s Budget
At the time these financial statements were prepared and audited, the Regional Office of
Education #26 was aware of several existing circumstances that could affect its financial
condition in the future:
• With the State of Illinois in the midst of an unprecedented financial crisis, the status of
grant funding for the upcoming fiscal year is bleak at best. We are anticipating drastic
cuts for many of our programs or the elimination of them.
• Many programs were suspended for a six month period in FY11 due to cash flow
issues which can solely be attributed to the extremely late payments from the State of
Illinois.
• The County Boards of Hancock and McDonough Counties have increased their
funding slightly to our office.
• The Child and Family Connections # 13 Grant anticipates a decrease in funding which
may require layoffs in that program.
• The Regional Office of Education is required to maintain a high level of liability
insurance, which increases in cost yearly.
• As costs for consumers rise (energy, maintenance, etc.), there will be increasing
demands for employees to have raises that match or exceed past practices. These will
be difficult to honor as both counties encompassed by Regional Office of Education
#26 are burdened with considerable financial challenges.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2011
- 27 -
Contacting the Regional Office’s Financial Management
This financial report is designed to provide the Regional Office’s citizens, taxpayers, clients,
and other constituents with a general overview of its finances and demonstrate the
accountability for the money it receives. If the reader has questions concerning this report or
needs additional financial information, please contact the Regional Superintendent of the
Regional Office of Education #26, 130 South Lafayette Street, Suite 200, Macomb, IL 61455.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
BASIC FINANCIAL STATEMENTS
The notes to the financial statements are an integral part of this statement.
28
Governmental Business-Type
Activities Activities Total
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 699,204 $ 31,683 $ 730,887
Inventory - 522,052 522,052
Due from other funds 5,032 - 5,032
Due from other governments 648,311 - 648,311
Total current assets $ 1,352,547 $ 553,735 $ 1,906,282
NONCURRENT ASSETS
Capital assets, net of depreciation 56,809 49,865 106,674
TOTAL ASSETS $ 1,409,356 $ 603,600 $ 2,012,956
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 34,500 $ 523,174 $ 557,674
Due to other governments 4,375 - 4,375
Due to other funds - 5,032 5,032
Deferred revenue 579,282 - 579,282
Total current liabilities $ 618,157 $ 528,206 $ 1,146,363
TOTAL LIABILITIES $ 618,157 $ 528,206 $ 1,146,363
NET ASSETS
Investments in capital assets, net of related debt $ 56,809 $ 49,865 $ 106,674
Unrestricted 588,836 25,529 614,365
Restricted for educational purposes 145,554 - 145,554
TOTAL NET ASSETS $ 791,199 $ 75,394 $ 866,593
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
STATEMENT OF NET ASSETS
JUNE 30, 2011
The notes to the financial statements are an integral part of this statement.
29
Charges Operating Governmental Business-Type
FUNCTIONS/PROGRAMS Expenses for Services Grants Activities Activities Total
PRIMARY GOVERNMENT
Governmental Activities:
Instructional Services:
Salaries $ 1,125,661 $ - $ 1,049,667 $ (75,994) $ - $ (75,994)
Benefits 429,995 - 346,072 (83,923) - (83,923)
Purchased services 799,947 8,378 724,048 (67,521) - (67,521)
Supplies and materials 106,586 1,185 107,625 2,224 - 2,224
Depreciation 27,887 - - (27,887) - (27,887)
Capital outlay - - 46,140 46,140 - 46,140
Other objects 317 - 233 (84) - (84)
Transfers - payments to other governmental units 209,822 - 209,822 - - -
Administrative:
On-behalf payments 341,083 - - (341,083) - (341,083)
Total Governmental Activities $ 3,041,298 $ 9,563 $ 2,483,607 $ (548,128) $ - $ (548,128)
Business-type Activities:
Other $ 789,748 $ 781,476 $ - $ - $ (8,272) $ (8,272)
Total Business-type Activities $ 789,748 $ 781,476 $ - $ - $ (8,272) $ (8,272)
Total Primary Government $ 3,831,046 $ 791,039 $ 2,483,607 $ (548,128) $ (8,272) $ (556,400)
General Revenues:
Local sources $ 496,249 $ - $ 496,249
On-behalf payments 341,083 - 341,083
Investment income 722 - 722
Total General Revenues $ 838,054 $ - $ 838,054
Change in net assets $ 289,926 $ (8,272) $ 281,654
Net Assets - beginning of year 501,273 83,666 584,939
Net Assets - end of year $ 791,199 $ 75,394 $ 866,593
and Changes in Net Assets
Program Revenues Primary Government
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Net (Expense) Revenue
The notes to the financial statements are an integral part of this statement.
30
Nonmajor Total
General Education Institute Special Revenue Governmental
Fund Fund Fund Funds Funds
ASSETS
Cash and cash equivalents $ 378,880 $ 258,805 $ 52,567 $ 8,952 $ 699,204
Due from other funds 218,191 - - - 218,191
Due from other governments - 648,311 - - 648,311
TOTAL ASSETS $ 597,071 $ 907,116 $ 52,567 $ 8,952 $ 1,565,706
LIABILITIES
Accounts payable $ - $ 34,500 $ - $ - $ 34,500
Due to other funds - 213,159 - - 213,159
Due to other governments 4,375 - - - 4,375
Bank notes payable - - - - -
Deferred revenue - 559,047 22,459 - 581,506
Total liabilities $ 4,375 $ 806,706 $ 22,459 $ - $ 833,540
FUND BALANCE
Unassigned $ 592,696 $ (6,084) $ - $ - $ 586,612
Restricted - 106,494 30,108 8,952 145,554
Total fund balance $ 592,696 $ 100,410 $ 30,108 $ 8,952 $ 732,166
TOTAL LIABILITIES AND FUND BALANCE $ 597,071 $ 907,116 $ 52,567 $ 8,952 $ 1,565,706
LIABILITIES AND FUND BALANCE
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2011
The notes to the financial statements are an integral part of this statement.
31
Total fund balances - governmental funds $ 732,166
Amounts reported for governmental activities in the Statement of Net
Assets are different because:
Capital assets used in governmental activities are not
financial resources and therefore, are not reported in the funds. 56,809
Revenues in the Statement of Activities that do not provide current
financial resources but are reported as deferred revenue in the funds 2,224
Net assets of governmental activities $ 791,199
JUNE 30, 2011
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
GOVERNMENTAL FUNDS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
The notes to the financial statements are an integral part of this statement.
32
Nonmajor Total
General Education Institute Special Revenue Governmental
Fund Fund Fund Funds Funds
REVENUES
State sources $ 237,406 $ 1,426,591 $ - $ 3,868 $ 1,667,865
Federal sources 9,353 961,123 - - 970,476
Local sources 453,252 40,302 9,448 3,532 506,534
On-behalf payments 268,669 72,414 - - 341,083
Total revenues $ 968,680 $ 2,500,430 $ 9,448 $ 7,400 $ 3,485,958
EXPENDITURES
Instructional services:
Salaries $ 169,740 $ 989,071 $ - $ - $ 1,158,811
Benefits 124,520 305,475 - - 429,995
Purchased services 143,630 644,208 6,470 5,639 799,947
Supplies and materials 9,219 96,045 1,064 258 106,586
Other objects - 317 - - 317
Transfers - payments to other governmental units 7,537 202,285 - - 209,822
On-behalf payments 268,669 72,414 - - 341,083
Capital outlay 16,615 16,883 - - 33,498
Total expenditures $ 739,930 $ 2,326,698 $ 7,534 $ 5,897 $ 3,080,059
Revenues over (under) expenditures $ 228,750 $ 173,732 $ 1,914 $ 1,503 $ 405,899
Other financing sources (uses)
Transfers in $ 22,151 $ 1,607 $ - $ - $ 23,758
Transfers out - (23,758) - - (23,758)
Total other financing sources (uses) $ 22,151 $ (22,151) $ - $ - $ -
Net change in fund balances $ 250,901 $ 151,581 $ 1,914 $ 1,503 $ 405,899
FUND BALANCE (DEFICIT), BEGINNING
OF YEAR (Restated- See Note 18) 341,795 (51,171) 28,194 7,449 326,267
FUND BALANCE, END OF YEAR $ 592,696 $ 100,410 $ 30,108 $ 8,952 $ 732,166
FOR THE YEAR ENDED JUNE 30, 2011
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
The notes to the financial statements are an integral part of this statement.
33
Net change in fund balances $ 405,899
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 outlay $ 33,498
Depreciation (27,887) 5,611
Revenues in the Statement of Activities that do not provide current
financial resources and are not reported as revenues in the funds. 2,224
Revenues providing current financial resources in the fund statements
previously recognized in the Statement of Activities. (156,958)
Certain expenses in the Statement of Activities do not require the
use of current financial resources and, therefore, are not
reported as expenditures in governmental funds 33,150
Change in net assets of governmental activities $ 289,926
FOR THE YEAR ENDED JUNE 30, 2011
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
GOVERNMENTAL FUNDS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
The notes to the financial statements are an integral part of this statement.
34
Western
Area Nonmajor
Purchasing Enterprise
Co-Op Funds Total
Assets
Current assets
Cash and cash equivalents $ 17,206 $ 14,477 $ 31,683
Inventory 522,052 - 522,052
Total current assets $ 539,258 $ 14,477 $ 553,735
Noncurrent assets
Equipment, net $ 2,606 $ 9,759 $ 12,365
Building, net 37,500 - 37,500
Total noncurrent assets $ 40,106 $ 9,759 $ 49,865
Total Assets $ 579,364 $ 24,236 $ 603,600
Liabilities and Net Assets
Liabilities
Accounts payable $ 522,052 $ 1,122 $ 523,174
Due to other funds - 5,032 5,032
Total liabilities $ 522,052 $ 6,154 $ 528,206
Net Assets
Invested in capital assets, net of related debt $ 40,106 $ 9,759 $ 49,865
Unrestricted 17,206 8,323 25,529
Total Net Assets $ 57,312 $ 18,082 $ 75,394
Business-type Activities
Enterprise Funds
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
PROPRIETARY FUNDS
STATEMENT OF NET ASSETS
JUNE 30, 2011
The notes to the financial statements are an integral part of this statement.
35
Western
Area Nonmajor
Purchasing Enterprise
Co-Op Funds Totals
Operating Revenues
Charges for services $ 748,487 $ 32,989 $ 781,476
Operating Expenses
Salaries $ 32,400 $ - $ 32,400
Benefits 2,898 - 2,898
Purchased services 3,872 20,259 24,131
Supplies and materials 722,766 1,914 724,680
Miscellaneous - 617 617
Depreciation 2,762 2,260 5,022
Total operating expenses $ 764,698 $ 25,050 $ 789,748
Change in Net Assets $ (16,211) $ 7,939 $ (8,272)
Net Assets, Beginning of year 73,523 10,143 83,666
Net Assets, End of year $ 57,312 $ 18,082 $ 75,394
Business-type Activities
Enterprise Funds
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
The notes to the financial statements are an integral part of this statement.
36
Western
Area Nonmajor
Purchasing Enterprise
Co-Op Funds Totals
Cash Flows from Operating Activities:
Receipts from customers $ 748,487 $ 33,430 $ 781,917
Payments to suppliers and providers of goods
and services (726,638) (16,636) (743,274)
Payments to employees (35,298) - (35,298)
Net cash provided (used) by operating activities $ (13,449) $ 16,794 $ 3,345
Cash Flows from Capital and Related Financing Activities:
Purchases of capital assets $ - $ (10,364) $ (10,364)
Net cash used by capital and
related financing activities $ - $ (10,364) $ (10,364)
Net increase (decrease) in cash and cash equivalents $ (13,449) $ 6,430 $ (7,019)
Cash and cash equivalents - Beginning of year 30,655 8,047 38,702
Cash and cash equivalents - End of year $ 17,206 $ 14,477 $ 31,683
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $ (16,211) $ 7,939 $ (8,272)
Adjustments to reconcile operating income (loss) to net cash
provided (used) by operating activities:
Depreciation 2,762 2,260 5,022
Decrease in assets:
Inventory 22,519 - 22,519
Due from other governments - 441 441
Increase/(Decrease) in liabilities:
Accounts payable (22,519) 1,122 (21,397)
Due to other funds - 5,032 5,032
Net cash provided (used) by operating activities $ (13,449) $ 16,794 $ 3,345
Business-type Activities
Enterprise Funds
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2011
The notes to the financial statements are an integral part of this statement.
37
Agency
Funds
ASSETS
Cash and cash equivalents $ 12,160
TOTAL ASSETS $ 12,160
LIABILITIES
Due to other governments $ 12,160
TOTAL LIABILITIES $ 12,160
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30, 2011
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 38 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Introduction
The accounting policies of Hancock/McDonough Regional Office of Education #26
(ROE) substantially comply with the rules prescribed by the Illinois State Board of
Education (ISBE). These accounting policies conform to Generally Accepted
Accounting Principles as prescribed by the Governmental Accounting Standards Board
(GASB).
Reporting Entity
Hancock/McDonough Regional Office of Education #26 was created by Illinois Public
Act 88-89, as amended. The ROE operates under the School Code (Articles 3 and 3A
of Illinois Compiled Statutes, Chapter 105). The ROE encompasses Hancock and
McDonough Counties. The voters of Hancock and McDonough Counties elect the
Regional Superintendent of Schools. The Regional Superintendent of Schools
(Superintendent) serves as chief administrative officer of the ROE and is elected
pursuant to Article 3, 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; inspection of public schools; direction of teachers and
school officers; to serve as the official advisor and assistant to school officers and
teachers; to conduct teachers institutes as well as to aid and encourage the formation of
other teacher meetings and assist in their management; evaluate the schools in the
region; examine evidence of indebtedness; file and keep the returns of elections
required to be returned to the Regional Superintendent's office; and file and keep the
reports and statements returned by school treasurers and trustees.
The Regional Superintendent is also charged with the responsibilities of conducting a
special census, when required; providing notice of any monies distributed to treasurers,
board presidents, clerks and secretaries of the school districts on or before each
September 30; maintenance of a map and numbering of the Regional Office of
Education #26's districts; providing township treasurers with a list of district treasurers;
to inspect and approve building plans which comply with State law; to perform and
report on annual building inspections; investigate bus drivers for valid bus driver
permits and take related action as may be required; to maintain a list of unfilled
teaching positions and to carry out other related duties required 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 under his control are properly bonded.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 39 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Reporting Entity - continued
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 bonds and that the district has
certified publication of the annual financial report. The Regional Superintendent is
required to provide opinions and advice related to controversies under school law.
For the period ended June 30, 2011, the Regional Office of Education #26 applied for,
received, and administered numerous State and federal programs and grants in assistance
of the educational activities of the school districts in the region. Such activities are
reported as a single major special revenue fund (Education Fund).
The ROE's financial statements include all funds of the ROE.
These are the only activities considered to be part of (controlled by or dependent on) the
ROE, as determined by the application of the criteria set forth in Governmental
Accounting Standards Board Statement No. 14, The Financial Reporting Entity. The
ROE has developed criteria to determine whether outside agencies with activities which
benefit the citizens of the region, including joint agreements which serve pupils from
numerous school districts, should be included within its financial reporting entity. The
criteria include, but are not limited to, whether the ROE exercises oversight responsibility
(which includes financial interdependency, selection of governing authority, designation
of management, ability to significantly influence operations, and accountability for fiscal
matters), scope of public service, and special financing relationships. The blended
component units described below are included in the ROE’s reporting entity because of
the significance of their operational or financial relationships with the ROE.
• Western Area Purchasing Co-Op is a joint agreement used to reduce costs to school
districts by purchasing various supplies in larger quantities. School districts in
West-Central Illinois place orders with the Co-Op, which accumulates the orders
and purchases large quantities for distribution to the districts. The purchasing Co-
Op is a discretionary activity fund.
• Video Co-Op is a joint agreement administered by the ROE, which maintains an
inventory of videocassette tapes. The tapes and tape players are available for
check-out by each of the school districts serviced by Regional Office of Education
#26. The Video Co-Op is a discretionary activity fund.
• Hancock/McDonough Alternative School and Alternative Training – Used to
account for State revenues and expenditures paid to provide an alternative education
program in Hancock and McDonough Counties.
• Gifted Co-Op Fund – Used to account for a joint agreement for providing gifted
instruction and coordination to school districts within ROE #26’s region.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 40 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Government-wide and Fund Financial Statements
Furthermore, the ROE does not consider itself to be a component unit of any other
entity.
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. The effect of interfund activity has been removed from these
statements. Governmental activities are supported by intergovernmental revenues and
are reported separate from business-type activities, which rely to a significant extent on
fees and charges for support.
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 customers or applicants 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. Other 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 funds are reported as separate columns in the
fund financial statements. Nonmajor funds are aggregated and reported in a single
column.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of the related cash flows. Grants
and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon
enough thereafter to pay current liabilities. The ROE considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. 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.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 41 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
Continued
Revenues from local sources consist primarily of fees charged to school districts for
services rendered by the ROE. Miscellaneous revenues are recorded when received in
cash because they are generally not measurable until actually received. Grant funds
from the State of Illinois are considered to be earned to the extent of expenditures made
under the provisions of the grant. Investment earnings are recorded as earned since
they are measurable and available.
The proprietary fund type is accounted for on a flow of economic resources
measurement focus. With this measurement focus, all assets and liabilities associated
with the operation of this fund are included on the Statement of Net Assets. Proprietary
fund type operating statements present increases (e.g., revenues) and decreases (e.g.,
expenses) in net total assets. The accrual basis of accounting is utilized by the
proprietary fund type. Under this basis of accounting, revenues are recognized when
earned and expenses are recognized when the related liability is incurred.
The ROE reports the following major governmental funds:
General Fund - The General Fund is used to account for all financial resources in the
Region except for those required to be accounted and reported for in other funds. The
ROE’s General Fund accounts include the following:
• County Funds – Used to account for funds provided by the County Boards of
Hancock and McDonough Counties for general office operation and maintenance.
• Interest Fund – Used to account for interest earned on the Distributive Fund for the
mutual benefit of each school district in Hancock and McDonough Counties.
• Regional Programs Funds – Accounts for the cost of operating certain programs
not paid for through special revenues or County funds and for interest earned on the
Distributive Fund.
• Office Administration Fund – Accounts for indirect costs of operating programs.
• Directory Fund – Funded by contributions from local school districts to prepare an
ROE directory.
• Hancock/McDonough Alternative Schools – Used to account for State revenues and
expenditures paid to provide an alternative education program in Hancock and
McDonough Counties.
Institute Fund – Used to account for examination, registration and renewal fees and to
defray expenses incidental to teacher’s institutes, workshops and professional meetings.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 42 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
Continued
Education Fund – The Education Fund includes proceeds of specific revenue sources
that are restricted by grant agreements or contracts to expenditures for specified
purposes supporting education enhancement programs. The ROE's Education Fund
accounts include the following:
• Early Childhood Grants – Used to account for State grant proceeds for the early
childhood education block grants.
• Even Start – Used to account for an educational opportunity program.
• Workforce Investment – Used to account for coordination of optional education and
vocational programs.
• Novel – Used to account for local fees associated with the ROE’s Novel project.
• Local Donations – Used to account for donations given to assist the McKinney
Education For Homeless Grant and Child and Family Connections Grant.
• Child and Family Connections – Used to account for a contractual agreement with
the Illinois Department of Human Services to provide a caseworker for the purpose
of monitoring teen parents receiving Aid to Dependent Children.
• Hearing/Vision Screening – Used to account for a hearing screenings program
funded through the Illinois Department of Public Aid.
• United Way – Used to account for funding from local United Way for child birth
classes and materials.
• Pioneer Grant – Used to promote mathematics and science in the Macomb Area.
• Truants Alternative Optional Education – Used to account for the cost of providing
tutoring services and to encourage students to stay in school.
• Regional Safe Schools – Used to account for an alternative schools program of
centralized instructional programs for students with specialized needs.
• Title I - Reading First Part B SEA Funds-Used to account for a program supporting
reading initiatives.
• Title IV – Safe and Drug Free Formula – Used to account for a regional, multi-district
program on drug and alcohol abuser education and prevention for students
throughout all grade levels (Pre-K thru 12).
• McKinney Education for Homeless Children/ARRA- McKinney Education for
Homeless Children – Used to account for the McKinney Education for Homeless
Grant, a program to facilitate the enrollment, attendance and success of homeless
youths in school.
• ROE Technology Maintenance – Used to account for revenues and expenditures of
the ISBE Technology Maintenance grant program.
• Family Literacy-Used to account for assistance provided to reading programs.
• Regional System Provider/Federal System – Used to account for federal revenues to
support a regionalized system of support to assist schools in academic difficulty.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 43 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
Continued
• Truants Alternative Optional Education Program (TAOEP) Training – Used to
account for State grant proceeds expended to train individuals in Truant Alternative
Education.
• Teen Court – Used to account for Department of Human Services funding of a
project designed to help teens better understand the court system in which teens act
as the jury in certain legal cases.
• Gifted Co-Op – Used to account for a joint agreement for providing gifted
instruction and coordination to school districts within ROE #26’s region.
• Teaching American History Grant – Used to account for federal grant proceeds
received in the ROE’s project to conduct nationally significant programs to improve
the quality of education, assist all students to meet challenging State content
standards, and contribute to the achievement of elementary and secondary students.
• Adult Learning Resource Center – Used to account for the ROE’s subcontract with
Schaumberg CUSD #54’s McKinney Education for Homeless Grant.
• Teen Parent Services – Used to account for Department of Human Services funding
for various programs for teen parents.
• ARRA Title I- School Improvement - Used to account for federal grant to improve
the lowest performing schools.
• ARRA Education Jobs Fund Program - Used to account for program to save or
create early childhood, elementary and secondary education jobs to provide
educational and related services.
• Tech Illinois – Used to account for program to enhance education through
technology.
• WC4 – Used to develop and implement a regional improvement plan.
Additionally, the ROE reports the following fund types:
Governmental
Non-Major Special Revenue Funds - Special Revenue Funds are used to account and
report the proceeds of specific revenue source (other than fiduciary or major capital
projects) that are legally restricted to expenditures for specified purposes. The ROE’s
nonmajor Special Revenue Funds include the following:
• General Education Development (GED) Fund – Used to account for fees and
expenditures incidental to administering the high school equivalency testing
program.
• Bus Driver Training – Used to account for fees and expenditures incidental to
conducting courses of instruction for school bus drivers pursuant to the standards
established by the Illinois Secretary of State.
• Supervisory Fund – Used to account for travel and other expenditures necessary to
perform the duty of supervising the school districts in the region.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 44 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
Continued
Proprietary
Proprietary funds account for activities whose costs are funded by fees and charges.
These fees and charges are paid by external users for goods or services. The ROE
utilizes the following proprietary fund:
• Western Area Purchasing Co-Op is a joint agreement used to reduce costs to school
districts by purchasing various supplies in larger quantities. School districts in
West-Central Illinois place orders with the Co-Op, which accumulates the orders
and purchases large quantities for distribution to the districts. As noted previously,
the purchasing Co-Op is a discretionary activity fund.
Additionally, the ROE reports the following nonmajor Proprietary Funds:
• Video Co-Op is a joint agreement administered by the ROE, which maintains an
inventory of videocassette tapes. The tapes and tape players are available for
check-out by each of the school districts serviced by Regional Office of Education
#26. As noted previously, the VIDEO Co-Op is a discretionary activity fund.
• Workshop Fund is used to account for all activity for workshops managed by the
ROE.
• Fingerprinting Fund is used to account for activity for the service of fingerprinting.
Fiduciary
Agency Funds – Fiduciary funds account for assets held by the ROE in a trustee or
agency capacity. Agency funds are custodial in nature and do not involve
measurement of results of operations. The ROE utilizes the following agency
funds:
• Distributive Fund – The resources in this fund are received by and passed through
the ROE to their owners. Entities whose resources are received by and passed
through the distributive fund include the Western Area Career System, West
Central Illinois Special Ed, and Regional Office of Education #26.
• State Superintendent Fund – Accounts for funds received from people applying for
teaching certificates. The funds are received by the ROE which, in turn, sends them
to the State Superintendent of Education on the individual’s behalf. Since the State
Superintendent of Education does not accept personal checks from the individuals,
the ROE accepts their checks and then remits a check to the State on their behalf.
• Regional Board of School Trustees Fund – Accounts for the marketing and disposal
of school properties belonging to local education agencies and for expenses related
to detachment petitions.
• Area III Superintendents Fund – Accounts for all the Area III regional
superintendents. Membership fees are used to provide meetings and seminars for
disseminating current information on administration issues.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 45 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
Continued
• Hancock County Principal Fund – Accounts for all the Hancock County principals.
Fees are used to provide meetings and seminars for disseminating current
information on administration issues.
• Rotary Scholarship Fund – Accounts for the donations from the rotary to give
scholarships to qualifying individuals to help in the cost of GED testing.
Budgetary Data
The grant budgets are submitted to grantor agencies for approval and funding; however,
no legal budget is required or adopted. A funding agreement is entered into upon
approval of the budget by the grantor. Any subsequent budget revisions must be
approved by the grantor. The following accounts prepare budgets:
Early Childhood Block Grant
Early Childhood Grant
Even Start
Truants Alternative Optional Education
Regional Safe Schools
ARRA- Title I – School Improvement &
Accountability
McKinney Education for Homeless
Children
Truants Alternative Optional Education
Program Training
Teaching American History Grant
Budgets for the other funds of the ROE are not legally required and have not been
prepared. Accordingly, no actual to budget comparison is included in the basic
financial statements. The actual to budget comparisons are prepared on the modified
accrual basis of accounting. The ROE is required to report, in its financial statements,
payments made by the State of Illinois to the Teachers' Retirement System. These “on-behalf”
payments which were not required to be budgeted, are recorded in the
Education Fund. These payments were recorded as both revenues and expenditures in
accordance with GASB Statement No. 24, Accounting and Financial Reporting for
Certain Grants and Other Financial Assistance.
Cash and Cash Equivalents
Cash consists of demand deposits. For purposes of the Statement of Cash Flows, the
ROE considers highly liquid investments (including restricted assets) with an original
maturity of three months or less when purchased to be cash equivalents.
Inventories
Inventories are carried at the lower of cost or market, cost being determined on the
first-in, first-out (FIFO) method.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 46 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
Continued
Due From Other Governments
Due from other governmental units and agencies is reported at gross with no allowance
for uncollectibles since management feels the amount of any uncollectible accounts is
immaterial.
Capital Assets
Capital assets, which include buildings, software, and furniture and equipment, are
reported in the applicable governmental or business-type activities column in the
government-wide financial statements. General fixed assets are not capitalized in the
funds used to acquire or construct them. Instead, capital acquisition and construction
are reflected as expenditures in governmental funds. All purchased fixed assets are
valued at cost where historical records are available and at an estimated historical cost
where no historical records exist. Donated fixed assets are valued at their estimated fair
market value on the date received. The ROE records all capital items, which are
individually greater than $500, with a useful life of greater than one year, as fixed
assets.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives are not capitalized. Improvements are capitalized and
depreciated over the remaining useful lives of the related fixed assets, as applicable.
Depreciation is computed using the straight-line method over the following estimated
useful lives; software over 3 years, furniture and equipment over 5 years, and buildings
over 40 years.
Net Assets
In the government-wide financial statements, fund equity is displayed in three
components:
Unrestricted net assets – All other net assets which do not meet the definition of
“restricted” or “invested in capital assets, net of related debt.”
Investment in capital assets, net of related debt – Consists of capital assets, net of
accumulated depreciation.
Restricted for educational purposes – Net assets that are subject to outside restrictions
which are not controlled by the entity. Things such as restrictions imposed by
creditors, grantors, contributors, or laws and regulations of other governments, or
imposed by law through constitutional provision or enabling legislation. Special
Revenue Funds are by definition restricted for those specified purposes.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 47 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation –
Continued
Fund Balance
According to Government Accounting Standards, fund balances are to be classified into
five major classifications; Nonspendable Fund Balance, Restricted Fund Balance,
Committed Fund Balance, Assigned Fund Balance, and Unassigned Fund Balance.
Below are definitions and a reconciliation of how these balances are reported.
Nonspendable Fund Balance- The nonspendable fund balance classification includes
amounts that cannot be spent because they are either (a) not in spendable form or (b)
legally or contractually required to be maintained intact. The "not in spendable form"
criterion includes items that are not expected to be converted to cash, for example
inventories and prepaid amounts. Due to the cash basis nature of the ROE, all such
items are expensed at the time of purchase, so there is nothing to report for this
classification.
Restricted Fund Balance- The restricted fund balance classification refers to amounts
that are subject to outside restrictions, not controlled by the entity. Things such as
restrictions imposed by creditors, grantors, contributors, or laws, and regulations of
other governments, or imposed by law through constitutional provisions or enabling
legislation. Special Revenue Funds are by definition restricted for those specified
purposes. The funds that make up Restricted Fund Balance are: Institute Fund, Even
Start, Novel, Local Donations, Hearing/Vision Screening, United Way, Title IV- Safe
and Drug Free Formula, McKinney Education for Homeless Children, ROE
Technology Maintenance, Family Literacy, General Education Development Fund, and
Bus Driver Training.
Committed Fund Balance- The committed fund balance classification refers to amounts
that can only be used for specific purposes pursuant to constraints imposed by formal
action of the government's highest level of decision making authority. Those
committed amounts cannot be used for any other purpose unless the government
removes or changes the specified use by taking the same type of formal action it
employed to previously commit those amounts. The ROE has nothing to report for this
classification.
Assigned Fund Balance- The assigned fund balance classification refers to amounts that
are constrained by the government's intent to be used for a specific purpose, but are
neither restricted or committed. The ROE has nothing to report for this classification.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 48 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation –
Continued
Fund Balance - Continued
Unassigned Fund Balance- The unassigned fund balance classification is the residual
classification for amounts in the General Operating Funds for amounts that have not
been restricted, committed, or assigned to specific purposes within the Governmental
Fund. The funds that make up Unassigned Fund Balance are: County Funds, Interest
Fund, Regional Programs Fund, Office Administration Fund, Directory Fund,
Hancock/McDonough Alternative Schools, Teen Court and Teen Parent Services.
Unless specifically identified, expenditures act to reduce restricted balances first, then
committed balances, next assigned balances, and finally act to reduce unassigned
balances. Expenditures for a specifically identified purpose will act to reduce the
specific classification of fund balance that is identified.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of
revenues, expenditures, gains, losses, and other changes in fund balance during the
reporting period. Actual results could differ from those estimates.
2. USE OF FUNDING SOURCES
Under the terms of grant agreements, the ROE funds certain programs by a
combination of specific cost-reimbursement grants and general revenues.
Thus, when program expenses are incurred, there are both restricted and
unrestricted resources available to finance the program. It is the policy of the
ROE to first apply cost-reimbursement grant resources to such programs and
then general revenues.
3. DEPOSITS AND INVESTMENTS
The Illinois Compiled Statutes authorize the ROE to invest in U.S. Government, State of
Illinois, and municipal securities; certificates of deposit or time savings deposits insured
by the FDIC; mortgage notes, bonds, or debentures issued by the Federal Housing
Administration; bonds and other obligations of the Federal National Mortgage
Association; commercial paper rated within the three highest classifications by at least
two standard rating services; credit union shares; and the Illinois Funds.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 49 -
3. DEPOSITS AND INVESTMENTS - Continued
Bank Deposits
At June 30, 2011, the government-wide and agency fund’s carrying amounts of the
ROE's various bank deposits totaled $730,887 and $12,160, respectively. The bank
balances totaled $854,945. Included in the bank balance is $10,243 invested in the
Illinois Funds. The ROE has obtained sufficient collateral for any excess cash on
deposit.
Custodial Credit Risk - Custodial credit risk for deposits with financial institutions is
the risk that in the event of bank failure, the ROE’s deposits may not be returned to it.
The ROE does not have a formal investment policy to guard against custodial credit risk
for deposits with financial institutions.
Investments
The ROE does not have a formal investment policy but requires that funds be invested
solely in investments authorized by the Public Funds Investment Act, 30 ILCS 235/2.
Custodial Credit Risk - Custodial credit risk for investments is the risk that, in the event
of the failure of the counterparty to the investment, the ROE will not be able to recover
the value of its investments that are in possession of an outside party.
Interest Rate Risk - The ROE invests solely in investments authorized by the Public Funds
Investment Act, 30 ILCS 235/2.
Credit Risk - The Illinois Funds (the Fund) is an external investment pool authorized by
the Illinois General Assembly. The Fund is exempt from registering with the Securities
and Exchange Commission. The Fund is rated by Standard and Poors upon the request
of the Fund’s management. The most recent money market rating issued by Standard
and Poors was AAAm. The fair value of the position in the Illinois Funds Investment
Pool is the same as the value of the pool shares. Illinois State Statute provides the
Illinois State Treasurer with regulatory oversight over the Pool.
4. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2011 is as follows:
Governmental Activities
Balance Balance
July 1, June 30,
2010 Additions Deletions 2011
Software and equipment $ 202,157 $ 33,498 $ - $ 235,655
Less accumulated depreciation for:
Software and equipment 150,959 27,887 - 178,846
Total capital assets, net of
accumulated depreciation $ 51,198 $ 5,611 $ - $ 56,809
Depreciation was charged to the Instructional Services activity.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 50 -
4. CAPITAL ASSETS - Continued
Business-type Activities
Capital asset activity for the year ended June 30, 2011 is as follows:
Balance Balance
July 1, June 30,
2010 Additions Deletions 2011
Building $ 50,000 $ - $ - $ 50,000
Software and equipment 25,568 10,364 - 35,932
Less accumulated depreciation for:
Building 11,250 1,250 - 12,500
Software and equipment 19,795 3,772 - 23,567
Total capital assets, net of
accumulated depreciation $ 44,523 $ 5,342 $ - $ 49,865
Depreciation was charged to the Other activity.
5. LONG-TERM DEBT
The ROE had recorded a liability associated with compensated absences in prior fiscal
years. During the fiscal year ended June 30, 2011, the ROE combined the unpaid
compensated absences with unused sick time, per agreement with the State of Illinois.
At June 30, 2011, the balance of compensated absences account was $0.
Balance Balance
July 1, June 30,
2010 Additions Deletions 2011
Compensated absences $ 33,150 $ - $ 33,150 $ -
6. EMPLOYEE’S RETIREMENT PLANS
A. Illinois Municipal Retirement Fund
Plan Description. The ROE’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 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 report that includes
financial statements and required supplementary information. That report may be
obtained on-line at www.imrf.org.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 51 -
6. EMPLOYEE’S RETIREMENT PLANS – Continued
A. Illinois Municipal Retirement Fund - continued
Funding Policy. As set by statute, the ROE 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 10.62 percent. The ROE 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 the calendar year 2010 was
$74,692.
Three-Year Trend Information for the Regular Plan
Calendar Annual Percentage
Year Pension of APC Net Pension
Ending Cost (APC) Contributed Obligation
12/31/10 $ 74,692 100% $ -
12/31/09 75,131 100% -
12/31/08 72,618 100% -
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) 7.50% investment rate of return (net of
administrative and direct investment expenses), (b) projected salary increases of 4.0% a
year, attributable to inflation, (c) additional projected salary increases ranging from
0.4% to 10.0% per year depending on age and service, attributable to seniority/merit,
and (d) post-retirement benefit increases of 3% annually. The actuarial value of 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 regular plan’s unfunded
actuarial accrued liability at December 31, 2008 is being amortized as a level
percentage of projected payroll on an open ten year basis.
Funded Status and Funding Progress. As of December 31, 2010, the most recent
actuarial valuation date, the regular plan was 93.35 percent funded. The actuarial
accrued liability for benefits was $1,403,107 and the actuarial value of assets was
$1,309,837, resulting in an underfunded actuarial accrued liability (UAAL) of $93,270.
The covered payroll for calendar year 2010 (annual payroll of active employees
covered by the plan) was $703,311 and the ratio of the UAAL to the covered payroll
was 13 percent.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 52 -
6. EMPLOYEE’S RETIREMENT PLANS – Continued
The schedule of funding progress, presented as required supplementary information
following the notes to the financial statements, presents multi-year trend information
about whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liability for benefits.
B. Illinois Teachers’ Retirement System (TRS)
The ROE 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 primary responsibility for the funding of the plan, but
contributions from participating employers and members are also required. The TRS
Board of Trustees is responsible for the system’s administration.
TRS members include all active nonannuitants who are employed by a TRS-covered
employer to provide services for which teacher certification is required. The active
member contribution rate through 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’s TRS-covered
employees.
• On Behalf Contributions to TRS
The State of Illinois makes employer pension contributions on behalf of the ROE.
For the year ended June 30, 2011, State of Illinois contributions were based on
23.10 percent of creditable earnings not paid from federal funds, and the ROE
recognized revenue and expenditures of $130,505 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 ($159,621) and 17.08
percent ($83,152), respectively.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 53 -
6. EMPLOYEE’S RETIREMENT PLANS – Continued
B. Illinois Teachers' Retirement System (TRS) - continued
The ROE makes other types of employer contributions directly to TRS.
• 2.2 Formula Contributions
Employers contributed 0.58 percent of creditable earnings for the 2.2 formula
change. This rate is specified by statute. Contributions for the year ending
June 30, 2011 were $2,214. Contributions for the years ended June 30, 2010 and
June 30, 2009, were $2,897 and $2,824, respectively.
• Federal and Special Trust Fund Contributions
When TRS members are paid from federal and special trust funds administered by
the ROE, there is a statutory requirement for the ROE 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 year
ended June 30, 2010 and 2009, the employer pension 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 $41,391 were paid from federal and
special trust funds that required employer contributions of $9,561. For the years
ended June 30, 2010 and June 30, 2009, required ROE contributions were $14,907
and $13,018, respectively.
• Early Retirement Option
The ROE is also required to make one-time employer contributions to TRS for
members retiring under the Early Retirement Option (ERO). The payments vary
depending on the age and salary of the member.
The maximum employer ERO contribution is 117.5 percent and applies when the
member is age 55 at retirement.
For the year ended June 30, 2011, the ROE paid $-0- to TRS for employer
contributions under the ERO program. For the years ended June 30, 2010 and June
30, 2009, the ROE made no payments in employer ERO contributions.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 54 -
6. EMPLOYEE’S RETIREMENT PLANS – Continued
B. Illinois Teachers’ Retirement System (TRS) – Continued
• 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 up to 6 percent.
For the years ended June 30, 2011, 2010, and 2009, the ROE paid no TRS for
employer contributions due on salary increases in excess of 6 percent, respectively.
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 years ended June 30, 2011, 2010 and 2009, there were no sick leave days
granted in excess of the normal annual allotment.
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, P.O. Box 19253, 2815 West Washington Street, Springfield, IL 62794-9253.
The most current report is also available on the TRS Website at http://trs.illinois.gov.
C. Teacher Health Insurance Security Fund
The ROE 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 it
does not provide vision, dental, or life insurance benefits to annuitants of 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 only be made by legislative action with the Governor's
approval.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 55 -
6: EMPLOYEE’S RETIRENT PLANS - continued
C. Teacher Health Insurance Security Fund – continued
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 payments to the THIS Fund. The State of Illinois makes employer retiree
health insurance contributions on behalf of the ROE. State contributions are intended
to match contributions to the THIS Fund from active members which were .88 percent
of pay during the year ended June 30, 2011. State of Illinois contributions were $3,359
and the ROE recognized revenue and expenditures of this amount during the year.
State contributions intended to match active member contributions during the year
ended June 30, 2010 was .84 percent of pay. State contributions on behalf of ROE
employees was $4,196. Had the Regional Office of Education #26 recognized revenue
and expenditures for State contributions to match active member contributions during
the year ended June 30, 2009, under current standards, the contribution match would
have been .84 percent of pay or $4,089.
• Employer contributions to the THIS Fund. The ROE also makes contributions to
the THIS Fund. The employer THIS Fund contribution was .66 percent during the year
ended June 30, 2011, and .63 percent for the years ended June 30, 2010 and
June 30, 2009. For the year ended June 30, 2011, the ROE paid $2,519 to the THIS Fund.
For the years ended June 30, 2010 and June 30, 2009, the ROE paid $3,147 and $3,067
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 Ave., Springfield, IL
62763-3838.
7. OTHER POSTEMPLOYMENT RETIREMENT BENEFITS
The Regional Office of Education #26 allows employees, who retire through the
Regional Office of Education #26’s plan disclosed in Note 6, the option to continue
in the Regional Office of Education #26’s health insurance plan as required by the
Illinois Compiled Statutes, but the retiree pays the full premium for the health insurance.
This has not created an implicit subsidy as defined by GASB Statement
No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other than Pensions, as the Regional Office of Education #26’s health plan
is considered a community rated plan. In addition, the Regional Office of Education
#26 has no explicit subsidy as defined in GASB Statement No. 45.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 56 -
8. DUE FROM OTHER GOVERNMENTS
A summary of amounts due from other governments at June 30, 2011 follows:
Amounts Amounts
due in less due in more
than 60 days than 60 days
Education Fund:
Illinois Department of Human Services $ 64,838 $ 9,862
U.S. Department of Education 36,739 -
Illinois State Board of Education 460,115 57,627
Two Rivers Professional Development Center 11,604 -
Adult Learning Resource Center 7,526 -
Total Education Fund $580,822 $ 67,489
The total due from other governments is $648,311.
9. DUE TO OTHER GOVERNMENTS
A summary of amounts due to other governments at June 30, 2011 follows:
General Fund:
Hancock/McDonough Alternative Schools $4,375
Total General Fund $4,375
Agency Funds:
State Superintendent Fund $ 1,291
Regional Board of School Trustees 1,773
Area III Superintendents 3,908
Hancock County Principal Fund 4,438
Rotary Scholarship Fund 750
Total Agency Funds $12,160
10. INTERFUND RECEIVABLES AND PAYABLES
Funds periodically borrow from other funds to cover temporary cash shortages. These
loans are usually paid in full within a few months. No interest is charged on the loans
outstanding. Following is a summary of the outstanding amounts due from (to) other
funds as of June 30, 2011:
Due from Due to
Fund Other Funds Other Funds
Education Fund $ - $213,159
General Fund 218,191 -
Proprietary Fund - 5,032
Total $218,191 $218,191
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 57 -
11. RISK MANAGEMENT
The ROE 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.
Insurance to cover these risks is provided through Hancock and McDonough Counties.
Claims from these risks have not exceeded commercial insurance coverage during the
current fiscal year and the previous two fiscal years.
12. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Generally accepted accounting principles require disclosure of certain information
concerning individual funds (which are presented only in combination on the financial
statements). Funds having deficit fund balances and funds which over-expended
appropriations during the year are required to be disclosed.
The following funds had a deficit fund balance at June 30, 2011:
Teen Court $3,860
Teen Parent Services 2,224
13. ON-BEHALF SALARIES AND BENEFITS PAYMENTS
As previously noted, the State of Illinois makes employer pension contributions on
behalf of the ROE. The salaries, benefits, and TRS contributions of the Regional
Superintendent and the Assistant Superintendent are paid by the State of Illinois. The
amounts paid by the State of Illinois are as follows:
Regional Superintendent salary $ 96,435
Regional Superintendent benefits 34,552
(Includes State paid insurance)
Assistant Regional Superintendent salary 86,791
Assistant Regional Superintendent benefits 31,766
(Includes State paid insurance)
Total $249,544
Salary and benefit data for the Regional Superintendent and Assistant Regional
Superintendent was calculated based on data provided by the Illinois State Board of
Education.
These awards are included in the financial statements of the General Revenue Fund as
on-behalf payments. Included in the benefits above is $42,325 of TRS contributions.
In addition to the total $249,544 above, TRS contributions in the Education Fund
include $72,414, and the General fund also includes TRS contributions of $15,766 and
THIS contribution of $3,359 for a total of $341,083 for the year ended June 30, 2011.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
NOTES TO THE FINANCIAL STATEMENTS
- 58 -
14. LEASE OBLIGATIONS
The ROE leases classroom and office space from various locations. Future minimum
rental payments under non-cancellable operating leases are as follows:
2012 $65,169
2013 $17,023
2014 $ 6,884
2015 $ 7,090
Rent expense for the year ended June 30, 2011 was $77,909.
15. NEW ACCOUNTING PRONOUNCEMENTS
In 2011, the ROE adopted 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 implemented these standards during the year; however, there
was no significant impact of the implementation of GASB No. 59 or No. 62. See Note 1
for implementation of GASB Statement No. 54.
16. TRANSFERS
The Hancock/McDonough Alternative Schools ($21,000), Regional Programs
Fund ($1,151), Early Childhood Block Grant ($875), and Early Childhood
Grant ($732) transferred in money from Child & Family Connections ($1,862),
Regional System Provider/Federal System ($21,000), and Truants Alternative
Optional Education Program Training ($896).
17. OPERATING LINE OF CREDIT
The ROE obtained an operating line of credit on May 26, 2010, secured by substantially
all of the ROE’s assets. The line was allowed to expire in January, 2011.
18. FUND RECLASSIFICATION
During the fiscal year 2011, the ROE implemented GASB Statement No. 54, Fund
Balance Reporting and Governmental Fund Type Definitions, which required certain
programs and funds to be reclassified and beginning fund balances to be restated. The
Hancock/McDonough Alternative Schools program was moved from an Educational
Fund Account to a General Fund Account with a beginning fund balance change of
$263,165.
19. SUBSEQUENT EVENTS
The ROE assessed events that have occurred subsequent to June 30, 2011 through
April 26, 2012, the date the financial statements were available to be issued, for potential
recognition and disclosure in the financial statements. No events have occurred that
would require adjustments to or disclosure in the financial statements.
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
REQUIRED SUPPLEMENTARY INFORMATION
(Other than Management’s Discussion and Analysis)
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
ILLINOIS MUNICIPAL RETIREMENT FUND (IMRF) - REQUIRED SUPPLEMENTARY
INFORMATION
SCHEDULE OF FUNDING PROGRESS
(Unaudited)
JUNE 30, 2011
59
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)- AAL Funded Covered of Covered
Valuation Assets Entry (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
12/31/2010 $ 1,309,837 $ 1,403,107 $ 93,270 93.35% $ 703,311 13.26 %
12/31/2009 1,197,214 1,424,434 227,220 84.05% 822,901 27.61 %
12/31/2008 1,072,190 1,225,464 153,274 87.49% 803,302 19.08 %
On a market value basis, the actuarial value of assets as of December 31, 2010 is $1,373,786.
On a market basis, the funded ratio would be 97.91%.
See Accompanying Independent Auditors' Report
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
OTHER SUPPLEMENTARY INFORMATION
See accompanying Independent Auditors' Report.
60
Hancock/
Regional Office McDonough
County Interest Programs Administration Directory Alternative
Funds Fund Fund Fund Fund Schools Totals
Assets
Cash and cash equivalents $ 41,020 $ 34,948 $ 57,324 $ 166 $ 5,755 $ 239,667 $ 378,880
Due from other funds - - 5,032 - - 213,159 218,191
Total Assets $ 41,020 $ 34,948 $ 62,356 $ 166 $ 5,755 $ 452,826 $ 597,071
Liabilities and Fund Balance
Liabilities
Accounts payable $ - $ - $ - $ - $ - $ - $ -
Due to other governments - - - - - 4,375 4,375
Total Liabilities $ - $ - $ - $ - $ - $ 4,375 $ 4,375
Fund Balance
Unassigned $ 41,020 $ 34,948 $ 62,356 $ 166 $ 5,755 $ 448,451 $ 592,696
Total Liabilities and
Fund Balance $ 41,020 $ 34,948 $ 62,356 $ 166 $ 5,755 $ 452,826 $ 597,071
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
GENERAL FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
61
Hancock/
Regional Office McDonough
County Interest Programs Administration Directory Alternative
Funds Fund Fund Fund Fund Schools Totals
Revenues
State sources $ - $ - $ - $ - $ - $ 237,406 $ 237,406
Federal sources - - 7,537 - - 1,816 9,353
Local sources 102,345 - 284,685 6,084 1,000 59,138 453,252
On-behalf payments - - 252,903 - - 15,766 268,669
Total Revenues $ 102,345 $ - $ 545,125 $ 6,084 $ 1,000 $ 314,126 $ 968,680
Expenditures
Salaries $ 54,274 $ - $ 64,971 $ - $ - $ 50,495 $ 169,740
Benefits 21,383 - 81,392 - - 21,745 124,520
Purchased services 4,889 - 94,433 - - 44,308 143,630
Supplies and materials 1,908 - 399 5,001 1,000 911 9,219
Transfers - payments to other governmental units - - 7,537 - - - 7,537
Capital outlay - - - - - 16,615 16,615
On-behalf payments - - 252,903 - - 15,766 268,669
Total Expenditures $ 82,454 $ - $ 501,635 $ 5,001 $ 1,000 $ 149,840 $ 739,930
Revenues over(under) expenditures $ 19,891 $ - $ 43,490 $ 1,083 $ - $ 164,286 $ 228,750
. .
Other Financing Sources/(Uses)
Transfers in $ - $ - $ 1,151 $ - $ - $ 21,000 $ 22,151
Transfers out - - - - - - -
$ - $ - $ 1,151 $ - $ - $ 21,000 $ 22,151
Net change in fund balances $ 19,891 $ - $ 44,641 $ 1,083 $ - $ 185,286 $ 250,901
Fund Balance (Deficit), Beginning
of year- (Restated- See Note 18) 21,129 34,948 17,715 (917) 5,755 263,165 341,795
Fund Balance (Deficit), End of year $ 41,020 $ 34,948 $ 62,356 $ 166 $ 5,755 $ 448,451 $ 592,696
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
GENERAL FUND ACCOUNTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
62
Early
Childhood Early
Block Childhood Even Workforce
Grant Grant Start Investment Novel
Assets
Cash and cash equivalents $ - $ 7,127 $ 27,830 $ - $ 95,659
Due from other funds - - - - -
Due from other governments 112,289 156,978 - - -
Total Assets $ 112,289 $ 164,105 $ 27,830 $ - $ 95,659
Liabilities and Fund Balance
Liabilities
Accounts payable $ - $ - $ - $ - $ -
Due to other funds 12,830 - - - -
Due to other governments - - - - -
Deferred revenue 99,459 164,105 27,659 - -
Total Liabilities $ 112,289 $ 164,105 $ 27,659 $ - $ -
Fund Balance
Restricted $ - $ - $ 171 $ - $ 95,659
Unassigned - - - - -
Total Fund Balance (Deficit) $ - $ - $ 171 $ - $ 95,659
Total Liabilities and
Fund Balance $ 112,289 $ 164,105 $ 27,830 $ - $ 95,659
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
63
Assets
Cash and cash equivalents
Due from other funds
Due from other governments
Total Assets
Liabilities and Fund Balance
Liabilities
Accounts payable
Due to other funds
Due to other governments
Deferred revenue
Total Liabilities
Fund Balance
Restricted
Unassigned
Total Fund Balance (Deficit)
Total Liabilities and
Fund Balance
Truants
Child & Hearing/ Alternative
Local Family Vision United Pioneer Optional
Donations Connections Screening Way Grant Education
$ 2,858 $ - $ 2,713 $ 822 $ 13,362 $ -
- - - - - -
- 48,800 - - - 100,916
$ 2,858 $ 48,800 $ 2,713 $ 822 $ 13,362 $ 100,916
$ - $ 1,152 $ - $ - $ - $ -
- 42,045 - - - 89,615
- - - - - -
- 5,603 - - 13,362 11,301
$ - $ 48,800 $ - $ - $ 13,362 $ 100,916
$ 2,858 $ - $ 2,713 $ 822 $ - $ -
- - - - - -
$ 2,858 $ - $ 2,713 $ 822 $ - $ -
$ 2,858 $ 48,800 $ 2,713 $ 822 $ 13,362 $ 100,916
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
64
Assets
Cash and cash equivalents
Due from other funds
Due from other governments
Total Assets
Liabilities and Fund Balance
Liabilities
Accounts payable
Due to other funds
Due to other governments
Deferred revenue
Total Liabilities
Fund Balance
Restricted
Unassigned
Total Fund Balance (Deficit)
Total Liabilities and
Fund Balance
ARRA
Title I - McKinney McKinney
Reading Title IV - Education Education
Regional First Safe and for for
Safe Part B Drug Free Homeless Homeless
Schools SEA Funds Formula Children Children
$ - $ - $ 632 $ 1,884 $ 15,916
- - - - -
30,194 - - - -
$ 30,194 $ - $ 632 $ 1,884 $ 15,916
$ - $ - $ - $ - $ -
9,178 - - - -
- - - - -
21,016 - - 1,884 14,747
$ 30,194 $ - $ - $ 1,884 $ 14,747
$ - $ - $ 632 $ - $ 1,169
- - - - -
$ - $ - $ 632 $ - $ 1,169
$ 30,194 $ - $ 632 $ 1,884 $ 15,916
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
65
Assets
Cash and cash equivalents
Due from other funds
Due from other governments
Total Assets
Liabilities and Fund Balance
Liabilities
Accounts payable
Due to other funds
Due to other governments
Deferred revenue
Total Liabilities
Fund Balance
Restricted
Unassigned
Total Fund Balance (Deficit)
Total Liabilities and
Fund Balance
Truants
Regional Alternative
System Optional
ROE Provider/ Education
Technology Family Federal Program Teen
Maintenance Literacy System Training Court
$ 1,733 $ 737 $ 7,651 $ 67,111 $ -
- - - - -
- - 11,604 81,140 13,460
$ 1,733 $ 737 $ 19,255 $ 148,251 $ 13,460
$ - $ - $ 2,960 $ - $ -
- - - - 13,460
- - - - -
- - 16,295 148,251 3,860
$ - $ - $ 19,255 $ 148,251 $ 17,320
$ 1,733 $ 737 $ - $ - $ -
- - - - (3,860)
$ 1,733 $ 737 $ - $ - $ (3,860)
$ 1,733 $ 737 $ 19,255 $ 148,251 $ 13,460
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
66
Assets
Cash and cash equivalents
Due from other funds
Due from other governments
Total Assets
Liabilities and Fund Balance
Liabilities
Accounts payable
Due to other funds
Due to other governments
Deferred revenue
Total Liabilities
Fund Balance
Restricted
Unassigned
Total Fund Balance (Deficit)
Total Liabilities and
Fund Balance
Teaching Adult ARRA
American Learning Teen Title I -
Gifted History Resource Parent School
Co-Op Grant Center Services Improvement
$ - $ - $ - $ - $ -
- - - - -
- 36,739 7,526 12,440 36,225
$ - $ 36,739 $ 7,526 $ 12,440 $ 36,225
$ - $ 30,388 $ - $ - $ -
- 6,351 1,210 8,662 29,808
- - - - -
- - 6,316 6,002 6,417
$ - $ 36,739 $ 7,526 $ 14,664 $ 36,225
$ - $ - $ - $ - $ -
- - - (2,224) -
$ - $ - $ - $ (2,224) $ -
$ - $ 36,739 $ 7,526 $ 12,440 $ 36,225
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF ACCOUNTS
JUNE 30, 2011
See accompanying Independent Auditors' Report.
67
Assets
Cash and cash equivalents
Due from other funds
Due from other governments
Total Assets
Liabilities and Fund Balance
Liabilities
Accounts payable
Due to other funds
Due to other governments
Deferred revenue
Total Liabilities
Fund Balance
Restricted
Unassigned
Total Fund Balance (Deficit)
Total Liabilities and
Fund Balance
ARRA
Education
Jobs Fund
Program Tech Illinois WC4 Totals
$ - $ - $ 12,770 $ 258,805
- - - -
- - - 648,311
$ - $ - $ 12,770 $ 907,116
$ - $ - $ - $ 34,500
- - - 213,159
- - - -
- - 12,770 559,047
$ - $ - $ 12,770 $ 806,706
$ - $ - $ - $ 106,494
- - - (6,084)
$ - $ - $ - $ 100,410
$ - $ - $ 12,770 $ 907,116
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
See accompanying Independent Auditors' Report.
68
Early
Childhood Early
Block Childhood Even Workforce
Grant Grant Start Investment Novel
Revenues
State sources $ 223,809 $ 254,163 $ - $ - $ -
Federal sources - - 102,200 11,627 -
Local sources 96 - - - 30,041
On-behalf payments - 25,800 - - -
Total Revenues $ 223,905 $ 279,963 $ 102,200 $ 11,627 $ 30,041
Expenditures
Salaries $ 86,784 $ 132,144 $ 53,678 $ - $ -
Benefits 32,987 22,389 19,985 - -
Purchased services 32,483 42,847 20,655 3 -
Supplies and materials 8,234 23,806 7,053 804 -
Other objects - - - - -
Transfers - payments to other governmental units - - - - -
Capital outlay - - 829 - -
On-behalf payments - 25,800 - - -
Total Expenditures $ 160,488 $ 246,986 $ 102,200 $ 807 $ -
Revenues over (under) expenditures $ 63,417 $ 32,977 $ - $ 10,820 $ 30,041
Other Financing Sources/(Uses)
Transfers in $ 875 $ 732 $ - $ - $ -
Transfers out - - - - -
$ 875 $ 732 $ - $ - $ -
Net change in fund balances $ 64,292 $ 33,709 $ - $ 10,820 $ 30,041
Fund Balance, Beginning of year (Restated- See Note 18) (64,292) (33,709) 171 (10,820) 65,618
Fund Balance, End of year $ - $ - $ 171 $ - $ 95,659
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
See accompanying Independent Auditors' Report.
69
Revenues
State sources
Federal sources
Local sources
On-behalf payments
Total Revenues
Expenditures
Salaries
Benefits
Purchased services
Supplies and materials
Other objects
Transfers - payments to other governmental units
Capital outlay
On-behalf payments
Total Expenditures
Revenues over (under) expenditures
Other Financing Sources/(Uses)
Transfers in
Transfers out
Net change in fund balances
Fund Balance, Beginning of year (Restated- See Note 18)
Fund Balance, End of year
Child & Hearing/
Local Family Vision United Pioneer
Donations Connections Screening Way Grant
$ - $ 487,047 $ - $ - $ -
- 66,812 - - -
1,284 - 5,770 1,773 590
- - - - -
$ 1,284 $ 553,859 $ 5,770 $ 1,773 $ 590
$ - $ 299,704 $ 5,085 $ 133 $ -
- 127,067 389 9 -
- 117,777 718 - 590
835 8,673 - 2,163 -
- - - - -
- - - - -
- 638 - - -
- - - - -
$ 835 $ 553,859 $ 6,192 $ 2,305 $ 590
$ 449 $ - $ (422) $ (532) $ -
$ - $ - $ - $ - $ -
- (1,862) - - -
$ - $ (1,862) $ - $ - $ -
$ 449 $ (1,862) $ (422) $ (532) $ -
2,409 1,862 3,135 1,354 -
$ 2,858 $ - $ 2,713 $ 822 $ -
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
See accompanying Independent Auditors' Report.
70
Revenues
State sources
Federal sources
Local sources
On-behalf payments
Total Revenues
Expenditures
Salaries
Benefits
Purchased services
Supplies and materials
Other objects
Transfers - payments to other governmental units
Capital outlay
On-behalf payments
Total Expenditures
Revenues over (under) expenditures
Other Financing Sources/(Uses)
Transfers in
Transfers out
Net change in fund balances
Fund Balance, Beginning of year (Restated- See Note 18)
Fund Balance, End of year
ARRA
Title I - McKinney McKinney
Truants Reading Title IV - Education Education
Alternative Regional First Safe and for for
Optional Safe Part B Drug Free Homeless Homeless
Education Schools SEA Funds Formula Children Children
$ 134,494 $ 63,508 $ - $ - $ - $ -
- - 3,789 - 16,369 273,623
- - - - - -
4,678 8,924 - - - 17,980
$ 139,172 $ 72,432 $ 3,789 $ - $ 16,369 $ 291,603
$ 65,610 $ 31,204 $ 319 $ - $ 8,826 $ 45,869
15,313 7,629 120 - 3,668 18,319
23,439 1,257 3,350 - 1,271 15,673
8,690 - - - 2,604 8,835
317 - - - - -
- - - - - 182,466
11,685 - - - - 2,461
4,678 8,924 - - - 17,980
$ 129,732 $ 49,014 $ 3,789 $ - $ 16,369 $ 291,603
$ 9,440 $ 23,418 $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ -
- - - - - -
$ - $ - $ - $ - $ - $ -
$ 9,440 $ 23,418 $ - $ - $ - $ -
(9,440) (23,418) - 632 - 1,169
$ - $ - $ - $ 632 $ - $ 1,169
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
See accompanying Independent Auditors' Report.
71
Revenues
State sources
Federal sources
Local sources
On-behalf payments
Total Revenues
Expenditures
Salaries
Benefits
Purchased services
Supplies and materials
Other objects
Transfers - payments to other governmental units
Capital outlay
On-behalf payments
Total Expenditures
Revenues over (under) expenditures
Other Financing Sources/(Uses)
Transfers in
Transfers out
Net change in fund balances
Fund Balance, Beginning of year (Restated- See Note 18)
Fund Balance, End of year
Truants
Regional Alternative
System Optional
ROE Provider/ Education
Technology Family Federal Program Teen
Maintenance Literacy System Training Court
$ - $ - $ - $ 163,369 $ 35,890
- - 34,263 - -
373 - - -
- - 15,032 - -
$ 373 $ - $ 49,295 $ 163,369 $ 35,890
$ - $ - $ 18,746 $ 41,765 $ 18,480
- - 2,534 13,543 3,400
786 - 12,006 102,848 5,399
- - 977 5,213 580
- - - - -
- - - - -
1,270 - - - -
- - 15,032 - -
$ 2,056 $ - $ 49,295 $ 163,369 $ 27,859
$ (1,683) $ - $ - $ - $ 8,031
$ - $ - $ - $ - $ -
- - (21,000) (896) -
$ - $ - $ (21,000) $ (896) $ -
$ (1,683) $ - $ (21,000) $ (896) $ 8,031
3,416 737 21,000 896 (11,891)
$ 1,733 $ 737 $ - $ - $ (3,860)
HANCOCK/MCDONOUGH REGIONAL OFFICE OF EDUCATION #26
EDUCATION FUND ACCOUNTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2011
See accompanying Independent Auditors' Report.
72
Revenues
State sources
Federal sources
Local sources
On-behalf payments
Total Revenues
Expenditures
Salaries
Benefits
Purchased services
Supplies and materials
Other objects
Transfers - payments to other governmental units
Capital outlay
On-behalf payments
Total Expenditures
Revenues over (under) expenditures
Other Financing Sources/(Uses)
Transfers in
Transfers out
Net change in fund balances
Fund Balance, Beginning of year (Restated- See Note 18)
Fund Balance, End of year
Teaching Adult ARRA
American Learning Teen Title I -
Gifted History Resource Parent School
Co-Op Grant Center Services Improvement
$ 35,315 $ - $ - $ 14,477 $ -
- 270,882 39,927 6,438 113,583
- - - - -
-