FY11-ISC01-Fin-Full

              STATE OF ILLINOIS
NORTH COOK
INTERMEDIATE SERVICE CENTER NO. 1
FINANCIAL AUDIT
(IN ACCORDANCE WITH THE SINGLE AUDIT ACT
AND OMB CIRCULAR A-133)
FOR THE YEAR ENDED JUNE 30, 2011
PERFORMED AS SPECIAL ASSISTANT AUDITORS
FOR THE OFFICE OF THE AUDITOR GENERAL
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
TABLE OF CONTENTS
Page
Numbers
OFFICIALS 1
Compliance Report Summary and Exit Conference 2
Financial Statement Report Summary 3
INDEPENDENT AUDITORS’ REPORT 4-5
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 6-7
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS
THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133 8-9
FEDERAL COMPLIANCE SECTION
Schedule of Findings and Questioned Costs 10 – 13
Corrective Action Plan for Current year Findings 14
Summary Schedule of Prior Audit Findings 15
Management Discussion and Analysis 16 – 19
BASIC FINANCIAL STATEMENTS
Statement of Net Assets – Governmental Activities 20
Statement of Activities 21
Balance Sheet – Governmental Funds 22
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets 23
Statement of Revenues, Expenditures, and Changes in Fund Balance
- Governmental Funds 24
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance to the Statement of Activities – Governmental Funds 25
Notes to Financial Statements 26 – 46
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
TABLE OF CONTENTS (Continued)
Page
Numbers
REQUIRED SUPPLEMENTARY INFORMATION
(Other than Management’s Discussion and Analysis)
Illinois Municipal Retirement Fund – Schedule of Funding Progress 47
Post Employment Benefits Other than Pensions – Schedule of Funding Progress 48
Budgetary Comparison Schedules – General Fund 49 - 51
Budgetary Comparison Schedules – Education Fund 52 - 54
Budgetary Comparison Schedules – Nonmajor Special Revenue Fund 55
Schedule of Expenditures of Federal Awards 56
Notes to the Schedule of Expenditures of Federal Awards 57
OFFICIALS
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Executive Director (Current and during audit period) Mr. Robert Ingraffia
Administrative Assistant (Current and during audit period) Ms. Cindy Cirillo
Business Manager (Curre nt and during audit period) Mr. Ronald Chilcote
Accounting Coordinator (Current and during audit period) Ms. Robyn Schiferl
Offices are located at:
Continental Office Plaza
2340 Des Plaines River Rd. Suite 414
Des Plaines, IL 60018-3292
-1-
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- -0-
Repeated audit findings -0- -0-
Prior recommendations implemented
or not repeated -0- -0-
Details of audit findings are presented in a separate section of this report.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-1 11 Inadequate Documentation for Payroll Expenditures S ig nificant Deficiency
and Noncompliance
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
11-1 11 Inadequate Documentation for Payroll Expenditures S ignificant Deficiency
and Noncompliance
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
-N/A-PRIOR
FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
-N/A-EXIT
CONFERENCE
The Center waived having an exit conference per a letter dated February 22, 2012.
-2-
FINANCIAL STATEMENT
REPORT SUMMARY
The audit of the accompanying basic financial statements of North Cook Intermediate Service Center No. 1
was performed by Bass, Solomon & Dowell, LLP.
Based on their audit, the auditors expressed an unqualified opinion on the agency’s basic financial statements.
-3-
INDEPENDENT AUDITORS’ REPORT
Honorable William G. Holland
Auditor General
State of Illinois
Board of Directors
North Cook Intermediate Service Center No. 1
As Special Assistant Auditors for the Auditor General, we have audited the accompanying financial
statements of the governmental activities, each major fund, and the aggregate remaining fund information of
North Cook Intermediate Service Center No. 1, as of and for the year ended June 30, 2011, which collectively
comprise the North Cook Intermediate Service Center No. 1’s basic financial statements as listed in the table
of contents. These financial statements are the responsibility of North Cook Intermediate Service Center No.
1’s management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and the significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, each major fund, and the aggregate remaining fund
information of North Cook Intermediate Service Center No. 1, as of June 30, 2011, and the respective
changes in financial position, thereof for the year then ended in conformity with the accounting principles
generally accepted in the United States of America.
North Cook Intermediate Service Center No. 1 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 North Cook Intermediate Service Center No. 1’s
governmental funds’ assets or liabilities nor was there any effect to the total amount of any of the North Cook
Intermediate Service Center No. 1’s governmental fund balances as of and for the year ended June 30, 2011.
In accordance with Government Auditing Standards, we have also issued a report dated February 28, 2012 on
our consideration of North Cook Intermediate Service Center No. 1’s internal control over financial reporting
and 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.
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Page 2
The Management’s Discussion and Analysis, the Illinois Municipal Retirement Fund Schedule of Funding
Progress and the Post Employment Benefits other than Pensions Schedule of Funding Progress, on pages 16
through 19, page 47, and page 48, are not a required part of the basic financial statements but are
supplementary information required by the 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 North Cook Intermediate Service Center No. 1’s basic financial statements. The Budgetary
Comparison Schedule is presented for purposes of additional analysis and is not a required part of the basic
financial statements of North Cook Intermediate Service Center No. 1. The accompanying Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of
Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit
Organization s, and is also not a required part of the basic financial statements. The Budgetary Comparison
Schedule 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.
Palatine , Illinois
February 28, 2012
-5-
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
Board of Directors
North Cook Intermediate Service Center No. 1
As Special Assistant Auditors for the Auditor General, we have audited the financial statements of the
governmental activities, each major fund, and the aggregate remaining fund information of North Cook
Intermediate Service Center No. 1, as of and for the year ended June 30, 2011, which collectively comprise
the North Cook Intermediate Service Center No. 1’s basic financial statements and have issued our report
thereon dated February 28, 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 North Cook Intermediate Service Center No. 1 is responsible for establishing and
maintaining effective internal control over financial reporting. In planning and performing our audit, we
considered North Cook Intermediate Service Center No. 1’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 the North Cook
Intermediate Service Center No. 1’s internal control over financial reporting. Accordingly, we do not express
an opinion on the effectiveness of the Center’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis.
A material weakness is a deficiency, or 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.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over financial
reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses as defined
above. However, we identified a certain deficiency in internal control over financial reporting, described in
finding 11-1 in the accompanying Schedule of Findings and Questioned Costs that we consider to be a
significant deficiency in internal control over financial reporting. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important
enough to merit attention by those charge with governance.
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Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the North Cook Intermediate Service Center No. 1’s
financial statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that
is required to be reported under Government Auditing Standards and which is described in the accompanying
Schedule of Findings and Question Costs as item 11-1.
Intermediate Service Center No. 1’s response to the finding identified in our audit is described in the
accompanying Schedule of Findings and Questioned Costs. We did not audit the Intermediate Service Center
No. 1’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, the 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.
Palatine, Illinois
February 28, 2012
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INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS
THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH
MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable William G. Holland
Auditor General
State of Illinois
Board of Directors
North Cook Intermediate Service Center No. 1
Compliance
We have audited the North Cook Intermediate Service Center No. 1’s compliance with the types of
compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a
direct and material effect on each of North Cook Intermediate Service Center No. 1’s major federal programs
for the year ended June 30, 2011. North Cook Intermediate Service Center No. 1’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 North Cook Intermediate Service Center No.1’s
management. Our responsibility is to express an opinion on North Cook Intermediate Service Center No. 1’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 North Cook
Intermediate Service Center No. 1’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 on North Cook Intermediate Service
Center No. 1’s compliance with those requirements.
In our opinion, North Cook Intermediate Service Center No. 1 complied, in all material respects, with the
compliance requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended June 30, 2011. However, the results of our auditing procedures disclosed
an instance of noncompliance with those requirements, which is required to be reported in accordance with
OMB-Circular A-133 and which is described in the accompanying Schedule of Findings and Questioned
Costs as item 11-1.
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Page 2
Internal Control Over Compliance
Management of North Cook Intermediate Service Center No. 1 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 North Cook
Intermediate Service Center No. 1’s internal control over compliance with the 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 North
Cook Intermediate Service Center No. 1’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 non compliance 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 material weaknesses, as defined above.
However, we identified a certain deficiency in internal control over compliance that we consider to be a
significant deficiency as described in the accompanying Schedule of Findings and Questioned Costs as item
11-1. A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of a compliance requirement of a federal
program that is less than severe than a material weakness in internal control over compliance, yet important
enough to merit attention by those charged with governance.
North Cook Intermediate Service Center No. 1’s response to the finding identified in our audit is described in
the accompanying Schedule of Findings and Questioned Costs. We did not audit North Cook Intermediate
Service Center No. 1’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.
Palatine , Illinois
February 28, 2012
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Section 1 - Summary of Auditor's Results
Financial Statements
Type of auditor's report issued:
Internal control over financial reporting:
• Material weakness(es) identified? yes X no
• Significant deficiencies identified
not considered to be material weaknesses? X yes none reported
• Noncompliance material to financial statements noted? X yes no
Federal Award:
Internal Control over major programs:
• Material weakness(es) identified? yes X no
• Significant deficiencies identified
not considered to be material weaknesses? X yes none reported
Type of auditor's report issued on compliance
for major programs:
Any audit findings disclosed that are required
to be reported in accordance with
Circular A-133, Section .510(a)? X yes no
Identification of major programs:
CFDA Number
Title I Grants to Local Educational Agencies Cluster:
84.010A
84.389
Dollar threshold used to distinguish
between Type A and Type B programs: $300,000
Auditee qualified as low-risk auditee? X yes no
Name of Federal Program or Cluster
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Schedule of Findings and Questioned Costs
Year Ended June 30, 2011
Title I - School Improvement & Accountability
Unqualified
Unqualified
Title I - Grants to Local Educational Agencies, Recovery Act
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Schedule of Findings and Questioned Costs
Year Ended June 30, 2011
Section II – Financial Statement Findings
Finding No. 11-1 – Inadequate Documentation for Payroll Expenditures
Federal Program Name: Title I – School Improvement and Accountability
Project No.: 2011-4331-SS
CFDA No.: 84.010A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Federal Program Name: Title I – Grants to Local Educational Agencies, Recovery Act
Project No.: 2011-4854-00
CFDA No.: 84.389
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific requirement:
Office of Management and Budget (OMB) Circular A-87, Cost Principles for State, Local and Indian Tribal
Governments , establishes principles and standards for determining costs for federal awards carried out
through grants, cost reimbursement contracts, and other agreements with State and local governments and
federally recognized Indian tribal governments. To be allowable under federal awards, costs must meet
certain general criteria. Those criteria require that expenditures be allocable, reasonable, and supported by
adequate documentation.
OMB Circular A-87 requires that all employees charged to federal grants maintain time and effort reporting.
There are two types of required time and effort records; semi-annual certifications and detailed monthly
reports. The type of record that must be kept is based on the job responsibilities of the individual charged to
the grant. The job responsibilities are referred to as either single cost objective or multiple cost objectives.
The difference between these two cost objectives is determined on what activities an employee works, not
how the employee is funded.
Costs are allocable to federal awards if the goods or services involved are chargeable or assignable to the
award in accordance with the relative benefits received. Where an accumulation of indirect costs will
ultimately result in charges to a federal award, a cost allocation plan is required as described in OMB Circular
A-87, Attachment B, paragraphs 8.h.(4),(5), and (6).
Condition:
North Cook Intermediate Service Center No. 1 did not maintain adequate time and effort statements to
allocate indirect costs in accordance with OMB Circular A-87. Salary and benefits for administrative
employees were charged to the Title I – School Improvement and Accountability and Title I – Grants to Local
Educational Agencies, Recovery Act programs based on amounts calculated for budget purposes rather than
costs based on actual time and effort reports.
Questioned Costs:
The amount of questioned costs cannot be determined without preparing a cost allocation plan.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Schedule of Findings and Questioned Costs
Year Ended June 30, 2011
Section II – Financial Statement Findings (Continued)
Finding No. 11-1 – Inadequate Documentation for Payroll Expenditures (Continued)
Context :
North Cook Intermediate Service Center No. 1 allocated a total of $69,097 of indirect compensation costs to
the above programs. While these costs were approved in the grant budgets, without acceptable
documentation of the basis for, and rationale behind the allocations, the amounts over or under charged to the
programs cannot be readily determined. Based on the total amount of allocated costs charged to the programs,
any amount deemed to be over charged to the award most likely would be considered immaterial.
Effect :
North Cook Intermediate Service Center No. 1 is not able to determine if the amount of indirect
compensation charged to both Title I programs represent s the grant’s “fair share” of costs recognized under
principles required by OMB Circular A-87.
Cause:
North Cook Intermediate Service Center No. 1 determined the amount of costs to be allocated to the grant
programs based on amounts allowable in grant budgets.
Recommendation :
North Cook Intermediate Service Center No. 1 should develop and implement adequate policies and
procedures to ensure compliance with the Allowable Costs/Cost Principles of the OMB Circular A-133
Compliance Supplement and Cost Principles of OMB Circular A-87 for Compensation for Personnel
Services. These policies and procedures should include requiring staff involved in multiple programs to
submit time sheets by program or a time and effort report by program. North Cook Intermediate Service
Center No. 1 should also establish a payroll cost allocation procedure that allows for computation and
comparison of actual time charged with budgeted time or allocation rates on a regular basis. Payroll charges
by program should be based on the time devoted and identified specifically to the performance of those
programs.
Management’s Response:
After discussing the finding with the Illinois State Board of Education, North Cook Intermediate Service
Center No. 1 agrees with this finding and began developing and implementing adequate policies and
procedures to ensure compliance with the Allowable Costs/Cost Principles of the OMB Circular A-133
Compliance Supplement and Cost Principles of OMB Circular A-87 for Compensation for Personnel
Services. Starting in fiscal year 2012, North Cook Intermediate Service Center No. 1 will be modifying the
budget for its various programs to eliminate administrative function support from the budget.
-12-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Schedule of Findings and Questioned Costs
Year Ended June 30, 2011
Section III – Federal Award Findings
Instances of Noncompliance
Finding No. 11-1 – Inadequate Documentation for Payroll Expenditures – (Finding details on page 11)
Significant Deficiency
Finding No. 11-1 – Inadequate Documentation for Payroll Expenditures – (Finding details on page 11)
-13-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Corrective Action Plan for Current Year Audit Finding
Year Ended June 30, 2011
Corrective Action Plan
Finding No. 11-1 – Inadequate Documentation for Payroll Expenditures
Federal Program Name: Title I – School Improvement and Accountability
Project No.: 2011-4331-SS
CFDA No.: 84.010A
Passed Through: Illinoi s State Board of Education
Federal Agency: U.S. Department of Education
Federal Program Name: Title I – Grants to Local Educational Agencies, Recovery Act
Project No.: 2011-4854-00
CFDA No.: 84.389
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Condition :
North Cook Intermediate Service Center No. 1 did not maintain adequate time and effort statements to
allocate indirect costs in accordance with OMB Circular A-87. Salary and benefits for administrative
employees were charged to the Title I – School Improvement and Accountability and Title I – Grants to Local
Educational Agencies, Recovery Act programs based on amounts calculated for budget purposes rather than
costs based on actual time and effort reports.
Corrective Action Plan:
After discussing the finding with the Illinois State Board of Education, North Cook Intermediate Service
Center No. 1 agrees with this finding and began developing and implementing adequate policies and
procedures to ensure compliance with the Allowable Costs/Cost Principles of the OMB Circular A-133
Compliance Supplement and Cost Principles of OMB Circular A-87 for Compensation for Personnel
Services. Starting in fiscal year 2012, North Cook Intermediate Service Center No. 1 will be modifying the
budget for its various programs to eliminate administrative function support from the budget.
Anticipated Date of Completion:
The Center will implement the corrective action plan immediately
Name of Contact Person:
Ronald Chilcote, Business Manager
-14-
Finding Number Condition Current Status
-15-
-N/A-NORTH
COOK INTERMEDIATE SERVICE CENTER NO. 1
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2011
MANAGEMENT’S DISCUSSION AND ANALYSIS
(REQUIRED SUPPLEMENTARY INFORMATION)
managements
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Required Supplementary Information
Management Discussion and Analysis
Year Ended June 30, 2011
As management of North Cook Intermediate Service Center No. 1, we offer the readers of the financial
statements this narrative overview and analysis of the financial activities of North Cook Intermediate Service
Center No. 1 for the year ended June 30, 2011.
Management’s Discussion and Analysis (MD&A) is an element of required supplementary information
specified in the Governmental Accounting Standards Board’s (GASB) Statement No. 34 issued in June 1999.
Certain comparative information between the current year (ended June 30, 2011) and the prior year (ended
June 30, 2010) is required to be presented in the MD&A.
MD&A is provided at the beginning of the report to provide an overview of North Cook Intermediate Service
Center No. 1’s financial position at June 30, 2011 and the results of operations for the year. This summary
should not be taken as a replacement for the audit report, which consists of the financial statements, notes to
the financial statements, required and other supplementary information.
During fiscal year 2011, North Cook Intermediate Service Center No. 1 implemented Government
Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund
Type Definitions, which required certain programs and funds to be reclassified and the restatement of
beginning fund balances as detailed in Note 1 in the financial statements. Because of these reclassifications,
the fund analysis is not comparable between fiscal year 2010 and fiscal year 2011.
Using This Financial Report
The financial section of this annual report consists of four parts – Independent Auditor’s Reports, required
supplementary information which includes the MD&A (this section), the basic financial statements, and other
supplementary information. The basic financial statements include two kinds of statements that present
different views of North Cook Intermediate Service Center No. 1: 1) Government-wide financial statements
and 2) fund financial statements.
Government – Wide Financial Statements
The first two statements are government-wide financial statements that provide both short term and long term
information about North Cook Intermediate Service Center No. 1’s overall financial status, similar to a
private business sector. In the government-wide financial statements, activities are shown in one category –
governmental activities. North Cook Intermediate Service Center No. 1’s basic service is education. These
activities are largely financed with local, State and federal revenues.
The Statement of Net Assets presents information on all of North Cook Intermediate Service Center No. 1’s
assets and liabilities, with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of North Cook
Intermediate Service Center No. 1 is improving or deteriorating. The Statement of Activities presents
information showing how the government’s net assets changed during the most recent fiscal year.
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as
revenue as soon as all the eligibility requirements imposed by the provider have been met.
The modified accrual basis of accounting is followed by the Governmental fund, which is in conformity with
the Illinois Program Accounting Manual for Local Education Agencies and accounting principles generally
accepted in the United States of America. Under the modified accrual basis of accounting, revenues are
recorded when susceptible to accrual, that is, when they become both “Measurable” and “Available” to
finance expenditures of the fiscal period. “Available” means collectible within the current period or soon
enough thereafter to be used to pay liabilities of the current period. Expenditures are generally recognized
under the modified accrual basis of accounting when the related liability is incurred.
-16-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Required Supplementary Information
Management Discussion and Analysis (Continued)
Year Ended June 30, 2011
Fund Financial Statements
The fund financial statements provide more detailed information about North Cook Intermediate Service
Center No. 1’s funds – not North Cook Intermediate Service Center No. 1 as a whole. Funds are specific
segregations of cash and accounting devices North Cook Intermediate Service Center No. 1 uses to keep track
of specific sources of funding and spending on particular programs. Some funds are required by state law,
while others are established to control and manage money for particular purposes or to show that North Cook
Intermediate Service Center No. 1 is properly using certain revenues.
Because the focus of the governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for each. By doing so, readers may better
understand the long-term impact of North Cook Intermediate Service Center No. 1’s near-term financing
decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues,
Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate the comparison between
governmental funds and governmental activities.
North Cook Intermediate Service Center No. 1 maintains various governmental funds. Information is
presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of
Revenues, Expenditures, and Changes in Fund Balance for these funds. More detail of the individual
revenues and expenditures for these funds is presented in the supplementary section of this report.
North Cook Intermediate Service Center No. 1 is not legally required to adopt a budget, but an annual budget
is adopted for the Education Fund. Illinois State Board of Education, a granting agency, requires the North
Cook Intermediate Service Center No. 1 to adopt budgets for certain program revenues. A budgetary
comparison statement has been provided as supplementary information for the General, Education, and
Nonmajor Special Revenue Funds which is in compliance with GASB Statement No. 34.
Condensed Financial Information
Net assets are summarized in the table below.
June 30, 2011 June 30, 2010
Assets:
Current Assets $ 2,794,375 $2,854,203
Non-current Assets
Capital Assets 84,616 140,046
Total Assets 2,878,991 2,994,249
Liabilities:
Current Liabilities 265,782 344,426
Noncurrent Liabilities 14,155 -0-
Total Liabilities 279,937 344,426
Net Assets:
Investments in capital assets, net of debt 84,616 140,046
Restricted for educational purposes 496,113 -0-
Unrestricted 2,018,325 2,509,777
Total Net Assets $2,599,054 $2,649,823
Current assets consist of cash and investments, prepaid expense, accrued interest receivable and accounts
receivable -governmental claims.
As of June 30, 2011, North Cook Intermediate Service Center No. 1 had no outstanding long-term debt.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Required Supplementary Information
Management Discussion and Analysis (Continued)
Year Ended June 30, 2011
North Cook Intermediate Service Center No. 1’s net assets consist of unrestricted and restricted net assets and
investment in capital assets net of related debt.
Revenues, expenses, and changes in net assets are summarized in the table below.
Condensed Statement of Activities
For Fiscal Years Ending:
June 30, 2011 June 30, 2010
Revenues received:
Program:
Operating grants and contributions $2,470,098 $2,976,971
General:
Local sources 2,276,732 1,969,730
On-behalf payments 400,486 526,692
Investment Income 16,608 31,017
Miscellaneous -0- 64,009
Total revenue received 5,163,924 5,568,419
Expenditures disbursed:
Instructional services:
Instruction 1,345,095 1,646,302
Supporting Services 3,256,441 3,208,875
Nonprogrammed Charges 199,964 220,757
Administrative services:
On-behalf payments 400,486 526,692
Unallocated Depreciation Expense 12,707 12,571
Total expenditures disbursed 5,214,693 5,615,197
Change in net assets (50,769 ) (46,778)
Beginning net assets 2,649,823 2,696,601
Ending net assets $2,599,054 $2,649,823
Major sources of operating revenues for North Cook Intermediate Service Center No. 1 include: Federal and
State grants, and local tuition fees.
Management’s Analysis of the Intermediate Service Center’s Overall Financial Position and Results of
Operations
As shown in the table above, total revenues for governmen tal activities for this year were $5,163,924.
Federal and State grants financed 48% of this or $2,470,098. Local sources consisting of primar ily tuition
was the next largest contributor with $2,276,732 .
Capital assets
During the year ended June 30, 2011, the North Cook Intermediate Service Center No. 1 invested $8,110 in
new computers and other miscellaneous computer hardware.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Required Supplementary Information
Management Discussion and Analysis (Continued)
Year Ended June 30, 2011
Management’s Analysis of the Intermediate Service Center’s Overall Financial Position and Results of
Operations (Continued)
Net assets
During the year, net assets and net assets invested in capital assets decreased $50,769. Total revenue for
fiscal year ended June 30, 2010 was $5,568,419 and decreased by $404,495 to $5,163,924 for fiscal year
ended June 30, 2011. This was mainly due to a decrease in State and Federal grant monies. Expenses
decreased by $400,504 from $5,615,197 in fiscal year ended June 30, 2010, to $5,214,693 during fiscal year
ended June 30, 2011. Expenditures were lower in fiscal year 2011 compared to fiscal year 2010 due to a
decrease in instruction, supporting services and nonprogrammed charges. The factors which have contributed
to this condition are explained below.
Factors or Conditions Impacting Future Periods
On the revenue side, State and Federal grant monies decreased. Local revenue s were higher in comparison to
the prior year primarily due to the new ROE responsibilities assumed by the Center and an increase in the
number of participants enrolled in the various programs offered by North Cook Intermediate Service Center
No. 1.
On the expenditure side, increased spending will force the Center to do more with less.
In summary, this expectation of continued increases in service demand will result in larger response times,
reduced array of services, and the need to do more with existing human resources.
Contacting the Intermediate Service Center’s Financial Management
This financial report is designed to provide the Auditor General, the General Assembly, the Legislative Audit
Commission, the Governor, agency management, others within the organization, Illinois State Board of
Education, Federal award agencies and pass-through entities with a general overview of North Cook
Intermediate Service Center No. 1’s finances and to demonstrate accountability for the money it receives. If
you have questions about this report or need additional financial information, please contact Mr. Robert
Ingraffia , Executive Director, 2340 Des Plaines River Road, Des Plaines, IL 60018-3292.
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BASIC FINANCIAL STATEMENTS
ASSETS
Current assets:
Cash and investments $ 2,176,885
Prepaid expenses 53,809
Accrued interest receivable 4,093
Accounts receivable 559,588
Total current assets 2,794,375
Noncurrent assets:
Capital Assets, being depreciated, net 84,616
Total noncurrent assets 84,616
Total assets 2,878,991
LIABILITIES
Current Liabilities:
Accounts payable 28,315
Deferred revenue 202,494
Accrued payroll liabilities 34,973
Total current liabilities 265,782
Noncurrent Liabilities:
Accrued compensated absences 14,155
Total noncurrent liabilities 14,155
Total liabilities 279,937
NET ASSETS
Invested capital assets, net of related debt 84,616
Restricted for educational purposes 496,113
Unrestricted 2,018,325
Total net assets $ 2,599,054
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Statement of Net Assets - Governmental Activities
Year Ended June 30, 2011
The notes to the financial statements are an integral part of this statement.
Net (Expense) Revenue
Program and Changes in
Revenues Net Assets
Operating Primary Government
Grants and Governmental
Expenses Contributions Activities
FUNCTIONS/PROGRAMS
Primary government:
Governmental activities:
Instructional Services:
Instruction $ 1,345,095 $ 1,149,837 $ (195,258)
Supporting Services 3,256,441 1,057,725 (2,198,716)
Community Services -0- -0- -0-
Nonprogrammed Charges 199,964 262,536 62,572
Administrative:
On-behalf payments 400,486 -0- (400,486)
Unallocated Depreciation Expense 12,707 -0- (12,707)
Total governmental activities $ 5,214,693 $ 2,470,098 (2,744,595)
General revenues:
Local sources 2,276,732
On-behalf payments 400,486
Investment Income 16,608
Total general revenues 2,693,826
Change in net assets (50,769)
Net assets - beginning 2,649,823
Net assets - ending $ 2,599,054
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Statement of Activities
Year Ended June 30, 2011
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The notes to the financial statements are an integral part of this statement.
Nonmajor Total
General Education Special Revenue Governmental
ASSETS Fund Fund Funds Funds
Cash $ 982,283 $ 201,019 $ 79,070 $ 1,262,372
Investments 914,513 - - 914,513
Prepaid Expenses 53,809 - - 53,809
Accrued interest receivable 4,093 - - 4,093
Accounts Receivable 182,750 376,838 - 559,588
Total assets $ 2,137,448 $ 577,857 $ 79,070 $ 2,794,375
LIABILITIES
Accounts payable $ 568 $ 26,002 $ 1,745 $ 28,315
Accrued payroll liabilities 34,973 - - 34,973
Deferred revenue 15,618 219,568 - 235,186
Total liabilities $ 51,159 $ 245,570 $ 1,745 $ 298,474
FUND BALANCE
Nonspendable $ 53,809 $ - $ - $ 53,809
Restricted - 332,287 77,325 409,612
Assigned - - - -
Unassigned 2,032,480 - - 2,032,480
Total fund balance 2,086,289 332,287 77,325 2,495,901
Total liabilities
and fund balance $ 2,137,448 $ 577,857 $ 79,070 $ 2,794,375
The notes to the financial statements are an integral part of this statement.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Balance Sheet
Governmental Funds
June 30, 2011
Total fund balance - governmental fund $ 2,495,901
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. 84,616
Compensated absences are not due and payable in the current period
and therefore, are not reported as liabilities in the funds. (14,155)
Revenues in the statement of activities that do not provide
current financial resources are not reported as revenues in the funds. 32,692
Net assets of governmental activities $ 2,599,054
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets
June 30, 2011
The notes to the financial statements are an integral part of this statement.
Nonmajor Total
General Education Special Revenue Governmental
Fund Fund Fund Funds
REVENUES
Local Sources $ 1,880,728 $ 67,619 $ 344,993 $ 2,293,340
State Sources 733,015 1,398,777 95,028 2,226,820
Federal Sources -0- 705,526 -0- 705,526
Total Direct Revenues 2,613,743 2,171,922 440,021 5,225,686
On-behalf Payments 400,486 -0- -0- 400,486
Total Revenues 3,014,229 2,171,922 440,021 5,626,172
EXPENDITURES
Instruction 706,105 582,112 -0- 1,288,217
Support Services 1,892,515 1,001,230 362,696 3,256,441
Community Services -0- -0- -0- -
Nonprogrammed Charges -0- 199,964 -0- 199,964
Total Direct Expenditures 2,598,620 1,783,306 362,696 4,744,622
On-behalf Payments 400,486 -0- -0- 400,486
Total Expenditures 2,999,106 1,783,306 362,696 5,145,108
Net Change in Fund Balance 15,123 388,616 77,325 481,064
Fund Balance, July 1, 2010 (Restated- See Note 1F) 2,071,166 (56,329) -0- 2,014,837
Fund Balance, June 30, 2011 $ 2,086,289 $ 332,287 $ 77,325 $ 2,495,901
The notes to the financial statement are an integral part of this statement.
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Year Ended June 30, 2011
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Funds
Net change in fund balances $ 481,064
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 $ 8,110
Depreciation expense (63,540) (55,430)
Revenues in the statement of activities that did not
provide financial resources in the prior year and
are not reported as revenues in the government-wide
statements in the current year (494,940)
Expenditures in the Statement of Activities that do not
require the use of current financial resources and
therefore, are not reported as expenditures in the
governmental funds (14,155)
Revenues in the statement of activities that do not
provide current financial resources are not reported
as revenues in the funds 32,692
Change in net assets of governmental activities $ (50,769)
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Governmental Funds
Year ended June 30, 2011
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balance to the Statement of Activities
The notes to the financial statements are an integral part of this statement.
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of North Cook Intermediate Service Center No. 1 conform to accounting
principles generally accepted in the United States of America, as applicable to local governmental
units of this type. The following is a summary of the more significant accounting policies.
A. Reporting Entity:
The purpose of North Cook Intermediate Service Center No. 1 shall be to provide services
designed to be responsive to the specific needs of the schools in North Cook County. This area
shall include the districts within the territorial boundaries of the following high school districts:
Evanston Township H.S. Dist. 202 New Trier Township H.S. Dist. 203
Maine Township H.S. Dist. 207 Township H.S. Dist. 211
Township H.S. Dist. 214 Niles Township Comm. H.S. Dist. 219
Northfield Township H.S. Dist. 225
More specifically, North Cook Intermediate Service Center No 1 incorporates the following
activities into its overall plan of services:
Provide a variety of in-service training and staff development opportunities to
improve the knowledge and skills of educators.
Coordinate the communication and data reporting requirements from local and
regional programs and services to the State Board of Education and the State
Superintendent of Education as needed.
Serve as a clearinghouse for educational information and research.
Serve as the primary regional delivery system for federal and/or state supported
programs and services in education as authorized in Section 2-3.62 of The School
Code or as directed by the State Superintendent of Education.
Provide other services as set out in Section 500.50 of the Emergency Rules of the
State Board of Education.
In evaluating how to define North Cook Intermediate Service Center No. 1 for financial
reporting purposes, management has considered all potential component units. The decision to
include or exclude a potential component unit in the reporting entity is made by applying the
criteria set forth in Accounting Principles Generally Accepted in the United States of America.
The definition of a component unit is a legally separate organization for which North Cook
Intermediate Service Center No. 1 is financially accountable and other organizations for which
the nature and significance of their relationship are such that exclusion would cause the
reporting entity’s financial statements to be misleading or incomplete. North Cook Intermediate
Service Center No. 1 is financially accountable if it appoints a voting majority of the
organization’s governing body and (1) it is able to impose its will on that organization or (2)
there is a potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on it. North Cook Intermediate Service Center No. 1 also may be
financially accountable if an organization is fiscally dependent on it regardless of whether the
organization has (1) a separately elected governing board, (2) a governing board appointed by a
higher level of government or (3) a jointly appointed board. Even though there are local
government agencies within the geographic area served by North Cook Intermediate Service
Center No. 1, such as the municipality, library and park district, these agencies have been
excluded from the report because they are legally separate and it is not financially accountable
for them. Based on these criteria, North Cook Intermediate Service Center No. 1 is not aware of
an entity which would exercise such oversight and would result in the Center being considered a
component unit of the entity.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B. Government -Wide and Fund Financial Statements:
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement
of Activities ) report information on all of the nonfiduciary activities of the Intermediate Service
Center.
The Statement of Activities demonstrates the degree to which the direct expenses of a given
function or segment is 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. Under the terms of grant agreements, North Cook Intermediate Service Center No. 1
funds certain programs by a combination of specific cost-reimbursement grants and general
revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted
funding resources available to finance the program. It is the policy of North Cook Intermediate
Service Center No. 1 to first apply restricted fund balances , then unrestricted. For unrestricted
fund balances, committed fund balances are used first, then assigned fund balances, then
unassigned if any.
The Statement of Net Assets presents information on all of North Cook Intermediate Service
Center No. 1’s assets and liabilities, with the difference between the two reported as net assets.
Over time, increases or decreases in net assets may serve as a useful indicator of whether the
financial position of North Cook Intermediate Service Center No. 1 is improving or
deteriorating. The net assets of the Intermediate Service Center are classified as follows:
Invested in Capital Assets – represents the Intermediate Service Center’s total investment in
capital assets. There is no outstanding debt related to these assets at this time.
Unrestricted Net Assets – represent resources used for transactions relating to the general
operations of the Intermediate Service Center and may be used at the discretion of
management to meet expenses for any purpose.
Restri cted Net Assets – represents a restriction on resources of a state or local government
that is externally imposed by creditors or imposed by law.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Basis of Presentation:
The accounts are organized and operated on the basis of funds. A fund is an independent fiscal
and accounting entity with a self-balancing set of accounts that comprise its assets, liabilities,
reserves, fund balance, revenues and expenditures or expenses as appropriate. Fund accounting
segregates funds according to their intended purpose, and is used to aid management in
demonstrating compliance with finance-related legal and contractual provisions. The minimum
number of funds is maintained consistent with legal and managerial requirements.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (continued):
The Center has the following fund types:
Governmental Funds are used to account for general government activities. Governmental fund
types use the flow of current financial resources measurement focus and the modified accrual
basis of accounting, revenues are recognized when susceptible to accrual, i.e., when they are
both “measurable and available”. “Measurable” means that the amount of the transaction can be
determined and “available” means collectible within the current period or soon enough
thereafter to be used to pay liabilities of the current period. All revenues are considered
available if they are collected within 60 days after year-end. Revenues received more than 60
days after the end of the current period are deferred in the governmental fund financial
statements, but are recognized as current revenues in the government-wide financial statements.
Expenditures are recorded when the related fund liability is incurred, except for unmatured
principal and interest on long-term debt which is recognized when due, and certain compensated
absences, claims and judgments which are recognized when the obligations are expected to be
liquidated with expendable available financial resources.
State and federal aid, and interest on investments are susceptible to accrual. Other receipts
become measurable and available when cash is received and are recognized as revenue at that
time.
North Cook Intermediate Service Center No. 1 uses funds to maintain its financial records
during the year. A fund is defined as a fiscal and accounting entity with a self-balancing set of
accounts. The Center uses governmental funds.
Governmental funds are those which most governmental functions typically are reported.
Governmental fund reporting focuses on the sources, uses, and balances of current financial
reporting. Expendable assets are assigned to the various governmental funds according to the
purpose for which they may or must be use. Current liabilities are assigned to the fund from
which they will be paid. The difference between governmental fund assets and liabilities is
reported as fund balance.
As prescribed by GASB Statement No. 34, governmental fund reporting focuses on the major
funds, rather than the fund type. There is a two-step process for determining if a fund should be
reported as a major fund: 1) total assets, liabilities, revenues, or expenditures/expenses
(excluding extraordinary items) of an individual fund are at least 10% of the corresponding total
for the fund type, and 2) total assets, liabilities, revenues, or expenditure/expenses (excluding
extraordinary items) of an individual fund are at least 5% of the corresponding total for the total
of all governmental and proprietary funds combined. Funds that do not meet the major fund
determination requirements are reported in aggregate as nonmajor funds. North Cook
Intermediate Service Center No. 1 has presented all major funds that met the above
qualifications.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (continued):
Fund balance is the difference between assets and liabilities in a Governmental Fund. The
following types of fund balances may be presented in the Governmental Fund Balance Sheet:
Nonspendable Fund Balance – the portion of a Governmental Fund’s net assets that are not
available to be spent, either short term or long term, in either form or through legal restrictions.
Prepaid expenses are presented under the nonspendable fund balance.
Restricted Fund Balance – the portion of a Governmental Fund’s net assets that are subject to
external enforceable legal restrictions. The following account fund balances are restricted by
grant agreements or contracts: ROE/ISC Operations, Regional Safe Schools, Bus Driver
Training and Certification, Institute, Gifted Education, Title I - School Improvement and
Accountability, Title I - Reading First Part B SEA Funds, Title I – Grant to Local Educational
Agencies, Recovery Act, and Education Jobs Fund.
Committed Fund Balance – the portion of a Governmental Fund’s net assets with self-imposed
constraints or limitations that have been placed at the highest level of decision making. There
are no accounts presenting a committed fund balance.
Assigned Fund Balance – the portion of a Governmental Fund’s net assets to denote an intended
use of resources. The accounts presented with assigned fund balances are specified for a
particular purpose by the Executive Director. There are no accounts presenting an assigned fund
balance.
Unassigned Fund Balance – available expendable financial resources in a governmental fund
that are not designated for a specific purpose. The unassigned fund balance is made up of the
Regional Safe Schools – General State Aid and tuition monies for teachers and administrator
workshops.
North Cook Intermediate Service Center No. 1 reports the following major governmental funds:
The Education Fund: This Fund is used to account for and report proceeds of specific revenue
sources that are restricted by grant requirements or contracts to expenditures for specified
purposes supporting education enhancement programs. Grants that are accounted for and
included in the Education Fund in the financial statements are as follows:
Title I - School Improvement and Accountability: This program provides direct technical
assistance to schools and districts in academic status. The program provides funds to put
school support teams (educational advisors) in each school in academic trouble.
Title I – Reading First Part B SEA Funds: This program focuses on putting proven methods
of early reading instruction in classrooms.
Title I Grant to Local Educational Agencies, Recovery Act: Funds are used to help local
educational agencies (LEAs) and schools improve the teaching and learning of children
failing, or most at-risk of failing, to meet challenging State academic achievement standards.
Education Jobs Fund: The objective of this program is to assist local educational agencies
(LEAs) in saving or creating education jobs for school year 2010-2011.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (continued):
I.S.C. Operations: Program monies for I.S.C. administrative operations. Program funding is
used to keep offices open in order to provide professional development to teachers in the
area.
Regional Safe Schools: Alternative program created through state legislation for students in
grades 6 through 12 that have multiple suspensions or that have been expelled from their
district. Eligible students are administratively transferred from their district into this program.
Gifted Education: Provides Gifted Education Seminars to teachers and Administrators. In
addition, funds can be used to provide additional professional development relating to the
differentiation of instruction training.
Local Sources: Establish es programs that offer coordinated services to at-risk students, and
their families.
The General Fund: The General Fund is the operating fund of North Cook Intermediate Service
Center No. 1. It is used to account for all financial resources within the territorial boundaries of
the Center except those required to be accounted and reported for in other fund. General Funds
include the following:
Regional Safe Schools - General State Aid: This program is for students placed in Regional
Safe Schools. Districts give up their general state aid claim for the students while placed in
the Regional Safe Schools program.
Local Services: These are revenues and expenditures associated with workshops conducted
by North Cook Intermediate Service Center No. 1.
Nonmajor Special Revenue Funds: All other special revenue funds not classified under the
Education Fund are grouped under this fund for financial statement presentation. This fund
includes the following:
Bus Driver Training and Certification: Accounts for revenue from the issuance of school bus
driver permits and to sponsor instructional training courses for school bus drivers.
Institute Fund: Accounts for fees collected for the registration and renewal of teaching
certificates. These fees are used to defray administrative expenses incidental to teachers’
institutes, workshops, or meetings of a professional nature that are designed to promote the
professional growth of teachers or to defray the expense of any general or special meeting of
teachers or school personnel. All funds generated remain restricted until expended only on
the aforementioned activities.
Government -wide and fund financial statements:
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement
of Activities) report information on all of the nonfiduciary activities of the Center.
The Statement of Activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Measurement Focus, Basis of Accounting and Basis of Presentation (concluded):
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.
The Statement of Net Assets presents information on all of North Cook Intermediate Service
Center No. 1’s assets and liabilities, with the difference between the two reported as net assets.
Net assets of the Center are classified as Unrestricted and Restricted Net Assets. Unrestricted
Net Assets represent resources used for transactions relating to the general operations of the
Center and may be used at the discretion of management to meet expenses for any purpose.
Restricted Net Assets consists of net assets with constraints placed on their used either by 1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments or 2) law through constitutional provisions or enabling legislation.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as a separate column in the fund financial statements.
D. Basis of Accounting:
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows.
Grants and similar items are recognized as revenue as soon as all the eligibility requirements
imposed by the provider have been met.
The modified accrual basis of accounting is followed by the Governmental fund, which is in
conformity with the Illinois Program Accounting Manual for Local Education Agencies and
accounting principles generally accepted in the United States of America. Under the modified
accrual basis of accounting, revenues are recorded when susceptible to accrual, that is, when
they become both “Measurable” and “Available” to finance expenditures of the fiscal period.
“Available” means collectible within the current period or soon enough thereafter to be used to
pay liabilities of the current period. Expenditures are generally recognized under the modified
accrual basis of accounting when the related liability is incurred.
E. Assets, Liabilities and Equity:
Deposits and Investments
State statutes authorize North Cook Intermediate Service Center No. 1 to invest in obligations of
the U.S. Treasury, certain highly-rated commercial paper, corporate bonds, repurchase
agreements, and the State Treasurer’s Investment Pool. Investments are stated at fair value.
Capital Assets
Capital assets used in governmental fund types are recorded in the government-wide financial
statements at cost or estimated historical cost if purchased or constructed. North Cook
Intermediate Service Center No. 1’s threshold for capitalizing fixed assets are those with a cost
of $500 or more.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
E. Assets, Liabilities and Equity (concluded):
Capital Assets (concluded)
Donated fixed assets are recorded at their estimated fair value at the date of donation. The cost
of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized.
All capital assets are being depreciated using the straight-line method over the following useful
life:
Equipment 7 years
Capital assets in the governmental fund financial statements are reported as expenditures when
incurred.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items.
Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimates
and assumptions affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and expenditures. Actual results
could differ from those estimates.
Reclassifications
Certain fund balance classifications in the 2010 financial statements have been reclassified to
conform to the 2011 presentation with no effect on previously reported changes in net assets.
F. New Accounting Pronouncements:
Effective for the year ending June 30, 2011, the Center adopted GASB Statement No. 54, Fund
Balance Reporting and Governmental Fund Type Definitions. This statement enhances the
usefulness of fund balance information by providing clearer fund balance classifications that can
be more consistently applied and by clarifying the existing governmental fund type definitions.
In addition, this Statement establishes fund balance classifications that comprise a hierarchy
based primarily on the extent to which government is bound to observe constraints imposed
upon the use of the resources reported in governmental funds. The implementation of GASB
Statement No. 54 changed fund balance reporting for governmental funds by adding some
additional fund balance classifications, clarifying governmental fund type definitions, and
providing additional disclosures on how fund balance constraints are imposed and may be
modified or eliminated.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
F. New Accounting Pronouncements (concluded):
Effective for the year ending June 30, 2011, the Center adopted GASB Statement No. 59,
Financial Instruments Omnibus. The objective of this Statement is to update and improve
existing standards regarding financial reporting and disclosure requirements of certain financial
instruments and external investment pools for which significant issues have been identified in
practice . There was no significant impact on the Center’s financial statements as a result of
adopting this statement.
Effective for the year ending June 30, 2011, the Center adopted GASB Statement No. 62,
Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30,
1989 FASB and AICPA Pronouncements. This Statement incorporates into the GASB’s
authoritative literature certain accounting and financial reporting guidance that is included in the
pronouncement issued on or before November 30, 1989, which does not conflict with or
contradict GASB pronouncements . There was no significant impact on the Center’s financial
statements as a result of adopting this statement.
G. Compensated Absences:
A full time, noncertified 260 day employee shall be eligible for paid vacation according to the
followin g schedule:
After this number of years of continuous
employment
Noncertified full time staff will receive this
number of paid vacation days
1 12
2 13
3 14
4 15
5 16
6 17
7 18
8 19
9 or more 20
North Cook Intermediate Service Center No. 1’s full time staff members working on a certified
position shall receive 15 days of vacation per year with one additional day per year after each
subsequent year of service, up to a maximum of 20 total days. Vacation time for noncertified
and certified employees is earned throughout the year on a prorated basis. Vacation days in one
fiscal year must be used by the end of that fiscal year.
With the prior approval of the Executive Director, up to 10 days may be carried over from year
to year, but in no instance may accrued days of vacation from the prior year exceed ten. For the
year ended June 30, 2011, the Executive Director granted a total of 51 days or $14,155 in
vacation accruals and thus, a liability has been accrued.
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Data:
Budgeted amounts for the Education Fund are adopted on the modified accrual basis, which is
consistent with accounting principles generally accepted in the United States of America
(GAAP).
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (concluded)
A. Budgetary Data (concluded):
Federal grants administered that have budgets are as follows: Title I-School Improvement and
Accountabil ity, Title I- Reading First Part B SEA Funds, Title I – Grants to Local Educational
Agencies, Recovery Act, and Education Jobs Fund.
State grants administered that have budgets are as follows: I.S.C. Operations, Regional Safe
Schools -General State Aid, Regional Safe Schools, Gifted Education and Bus Driver Training
and Certification.
In addition to having budgets for Federal and State grants, North Cook Intermediate Service
Center No. 1 also prepares a budget for local revenues and expenditures.
North Cook Intermediate Service Center No. 1 has not legally adopted the budgets and is not
required to do so. The Governing Board follows these procedures in establishing the budgetary
data reflected in the financial statements:
1. The Administration submits to the Board of Education a proposed operating budget for
the fiscal year commencing July 1. The operating budget includes proposed expenditures
and the means of financing them.
2. Prior to August 31, the Governing Board reviews the budget.
3. Management is authorized to transfer budget amounts, provided funds are transferred
between the same function and object codes. The Governing Board is authorized to
transfer up to a legal level of 10% of the total budget between functions within any fund;
however, any revisions that alter the total expenditures of any fund must be approved by
the Governing Board after following the public hearing process mandated by law.
4. Formal budgetary integration is employed as a management control device during the
year for the governmental fund.
5. Budgeted amounts for the governmental fund are adopted on a basis that is consistent
with accounting principles generally accepted in the United States of America, with the
exception of on-behalf payments made by other governmental units, which are not
required to be budgeted under state laws and regulations and are not budgeted.
6. Appropriations lapse at the end of the fiscal year.
7. The budget amounts shown in the financial statements are as originally adopted because
there were no amendments during the past fiscal year.
3. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments:
Under the Illinois Compiled Statutes, school districts and related organizations are authorized to
enter into contracts among themselves and to confirm and transfer powers and functions by
intergovernmental cooperation. O n July 1, 1996 the Wheeling Township Treasurer and Trustees
were abolished. At this time, Community Consolidated School District No. 21, the Center’s
Administrative Agent, as well as a number of other districts in the township, entered into an
intergovernmental agreement to transfer many of the duties and powers of the Township
Treasurer to Township High School District No. 214.
Effective July 1, 2000, North Cook Intermediate Service Center No. 1 began utilizing Des
Plaines School District No. 62 as its administrative agent in order to better facilitate accounting
for its transactions.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes To The Financial Statements
June 30, 2011
3. DETAILED NOTES ON ALL FUNDS (continued)
A. Deposits and Investments (concluded):
Township treasurer duties rest with Maine Township High School District No. 207 for Des
Plaines School District No. 62 and a number of other districts. At June 30, 2000, all
investments had been transferred to District No. 207.
District 207 invests excess funds at its discretion, subject to the legal restrictions discussed
below. For these purposes, District 207 is permitted to combine monies from more than one
fund of a single district and to combine monies of more than one district in the township.
Monies combined under these circumstances as well as investment earnings are accounted for
separately for each fund and/or district.
Cash and investments, other than the depository account and imprest funds are part of a
common pool for all school centers and cooperatives within the township. District 207
maintains records that segregate the cash and investment balance by district or cooperative.
Income from investments is distributed monthly based upon the percentage participation in the
pool.
At June 30, 2011, North Cook Intermediate Service Center No. 1 had a total of $2,176,885 in
cash and investments. This consists of $2,171,685 held on deposit with District 207, a $5,000
imprest account and $200 cash on hand. Because all cash and investments are pooled by a
separate legal governmental agency (District 207), categorization by risk category is not
determinable.
Carrying Bank
Amount Balance
Cash deposits $5,000 $5,140
The deposits shown above were fully covered by depository insurance.
Credit Risk
District 207’s investment policies are established by an Advisory Board made up of
representatives of the member districts as prescribed by the Illinois School Code and the Illinois
Compiled Statutes. District 207 is authorized to invest in obligations of the U.S. Treasury,
backed by the full faith and credit of the U.S. Government, certificates of deposit issued by
commercial banks and savings and loan associations, and commercial paper rated within the
three highest classifications by at least two standard rating services (subject to certain
limitations). As of June 30, 2011, the District’s investment in the external pool was rated within
the three highest classifications by at least two standard rating services.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an investment. Generally, the longer the maturity of an investment, the greater the
sensitivity of its fair value to changes in market interest rates. The District has no specific
policy on the interest rate risk at year-end. Management guidelines suggest investments not to
exceed six years in maturity from the date of purchase.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
3. DETAILED NOTES ON ALL FUNDS (continued)
B. Capital Assets:
The governmental activities capital asset activity for the year ended June 30, 2011 is as follows:
Balance Balance
July 1, 2010 Additions Retirements June 30, 2011
Cost:
Equipment $739,972 $8,110 $45,612 $702,470
Accumulated
Depreciation:
Equipment $599,926 $63,540 $45,612 $617,854
Total Capital
Assets, Net
Equipment $140,046 $(55,430 ) $-0- $84,616
Depreciation expense was charged to governmental functions as follows:
Instruction $50,833
Depreciation not charged to a specific function 12,707
Total depreciation for governmental activities $63,540
C. Lease Commitments:
North Cook Intermediate Service Center No. 1 has entered into three operating leases as
follows:
Lease 1: On December 10, 1999, a lease agreement was entered into for office and classroom
suites in Des Plaines, IL. An amendment was made on September 21, 2005 which extends the
lease until June 30, 2010. On January 31, 2010, a third amendment was made to extend the
lease until July 31, 2014.
The lease required the following rental terms:
Upper level suite: February 1, 2004 to January 31, 2005 at $11,059.44 per month
February 1, 2005 to January 31, 2006 at $9,309.00 per month
February 1, 2006 to January 31, 2007 at $9,588.27 per month
February 1, 2007 to March 31, 2007 at $9,875.92 per month
April 1, 2007 to March 31, 2008 at $9,877.88 per month
April 1, 2008 to March 31, 2009 at $10,174.22 per month
April 1, 2009 to March 31, 2010 at $10,479.45 per month
April 1, 2010 to March 31, 2011 at $10,793.83 per month
April 1, 2011 to March 31, 2012 at $11,117.64 per month
April 1, 2012 to March 31, 2013 at $11,451.17 per month
April 1, 2013 to March 31, 2014 at $11,794.71 per month
April 1, 2014 to July 31, 2014 at $12,150.12 per month
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
3. DETAILED NOTES ON ALL FUNDS (continued)
C. Lease Commitments (continued):
Lower level suites: February 1, 2004 to January 31, 2005 at $8,639.26 per month
February 1, 2005 to January 31, 2006 at $7,960.17 per month
February 1, 2006 to January 31, 2007 at $8,198.97 per month
February 1, 2007 to March 31, 2007 at $8,444.94 per month
April 1, 2007 to March 31, 2008 at $8,443.46 per month
April 1, 2008 to March 31, 2009 at $8,696.77 per month
April 1, 2009 to March 31, 2010 at $8,957.67 per month
April 1, 2010 to March 31, 2011 at $9,226.40 per month
April 1, 2011 to March 31, 2012 at $9,503.19 per month
April 1, 2012 to March 31, 2013 at $9,788.29 per month
April 1, 2013 to March 31, 2014 at $10,081.94 per month
April 1, 2014 to July 31, 2014 at $10,388.02 per month
April 1, 2007 to March 31, 2008 at $2,010.31 per month
April 1, 2008 to March 31, 2009 at $4,142.38 per month
April 1, 2009 to March 31, 2010 at $4,266.67 per month
April 1, 2010 to March 31, 2011 at $4,393.51 per month
April 1, 2011 to March 31, 2012 at $4,525.41 per month
April 1, 2012 to March 31, 2013 at $4,659.86 per month
April 1, 2013 to March 31, 2014 at $4,801.91 per month
April 1, 2014 to July 31, 2014 at $4,943.96 per month
Lease 1 (Amendment): On February 1, 2003, an additional 1,610 square feet was rented for
classroom suites in Des Plaines, IL. Amendments were made on September 21, 2005 and
February 1, 2007 which extends the lease to July 31, 2014.
The lease required the following rental terms:
Additional suite: February 1, 2004 to January 31, 2005 at $2,763.83 per month
February 1, 2005 to January 31, 2006 at $2,415.00 per month
February 1, 2006 to January 31, 2007 at $2,487.45 per month
February 1, 2007 to March 31, 2007 at $2,562.07 per month
April 1, 2007 to March 31, 2008 at $2,562.58 per month
April 1, 2008 to March 31, 2009 at $2,639.46 per month
April 1, 2009 to March 31, 2010 at $2,718.64 per month
April 1, 2010 to March 31, 2011 at $2,800.20 per month
April 1, 2011 to March 31, 2012 at $2,884.21 per month
April 1, 2012 to March 31, 2013 at $2,970.74 per month
April 1, 2013 to March 31, 2014 at $3,059.86 per month
April 1, 2014 to July 31, 2014 at $3,151.57 per month
Lease 1 (Amendment): On February 11, 2011, an additional 543 square feet was rented for
storage space in Des Plaines, IL. The effective date of the lease begins on March 1, 2011 and
extends to July 31, 2014.
Storage Space: March 1, 2011 to July 31, 2014 at $152.25 per month
Lease 2: On August 1, 2003 a lease agreement was entered into for property located in Skokie,
IL. The lease required the following rental terms:
August 1, 2003 to July 31, 2004 at $11,484.60 per month
August 1, 2004 to July 31, 2005 at $12,233.60 per month
August 1, 2005 to March 31, 2006 at $12,982.60 per month
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
3. DETAILED NOTES ON ALL FUNDS (concluded)
C. Lease Commitments (concluded):
Lease 2 (Amendment): On March 24, 2006, a decrease of 631 square feet was deleted from
classroom space rented in Skokie, IL. The amendment also extended the lease agreement until
July 31, 2011.
The revised lease agreement required the following rental terms:
April 1, 2006 to July 31, 2007 at $11,720.70 per month
August 1, 2007 to July 31, 2008 at $12,347.46 per month
August 1, 2008 to July 31, 2009 at $12,974.24 per month
August 1, 2009 to July 31, 2010 at $13,601.01 per month
August 1, 2010 to July 31, 2011 at $14,227.79 per month
Lease 3: On April 22, 2005 a new lease agreement was entered into for property located in
Palatine, IL. The lease required the following rental terms:
August 1, 2005 to July 31, 2006 at $5,500.00 per month
August 1, 2006 to July 31, 2007 at $6,000.00 per month
August 1, 2007 to July 31, 2008 at $6,180.00 per month
August 1, 2008 to July 31, 2009 at $6,365.00 per month
August 1, 2009 to July 31, 2010 at $6,556.00 per month
August 1, 2010 to July 31, 2011 at $7,000.00 per month
August 1, 2011 to July 31, 2012 at $7,350.00 per month
August 1, 2012 to July 31, 2013 at $7,718.00 per month
August 1, 2013 to July 31, 2014 at $8,103.00 per month
August 1, 2014 to July 31, 2015 at $8,509.00 per month
The leases carry no restrictions on the financial operating policies.
Minimum future rental payments under the above non-cancelable leases having remaining terms
in excess of 1 year as of June 30, 2011 for each of the next five years and in the aggregate are:
Year Ended June 30
2012
2013
2014
2015
Thereafter
$ 442,789
443,121
458,225
106,798
8,509
$1,459,442
North Cook Intermediate Service Center No. 1 also leases certain copy equipment under non-cancellable
rental agreements. The lease terms are for five years. The following is a schedule of
future rental payments required under these equipment leases:
Year Ended June 30
2012 3,300
$3,300
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
3. DETAILED NOTES ON ALL FUNDS (concluded)
D. Accounts Receivable:
Accounts receivable at June 30, 2011 consisted of the following amounts due from Federal,
State and Local programs:
Governmental Claims:
Regional Safe Schools $192,555
ROE/ISC Operations 76,161
Title I – Grant to Local Educational
Agencies, Recovery Act 1 8 4 , 2 8 3
Accounts Receivable-
Governmental Claims $452,999
Local Programs 106,589
Accounts Receivable at June 30, 2011 $559,588
E. Deferred Revenue
Deferred revenue is recognized in programs where program monies have been received but not
yet spent. The following programs recognized deferred revenues at June 30, 2011:
Title I- School Improvement & Accountability $ 199,572
Local Programs 650
ROE/ISC Operations 2,272
Deferred Revenue at June 30, 2011 $ 202,494
4. OTHER INFORMATION
A. Risk Management:
North Cook Intermediate Service Center No. 1 is exposed to various risks of loss related to torts;
theft of, damage to and destruction of assets; errors and omissions; and natural disasters for
which it carries commercial insurance through the Suburban School Cooperative Insurance Pool
(SSCIP).
B. Employee Retirement Systems & Plans:
Teachers’ Retirement System
North Cook Intermediate Service Center No. 1 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 that are employed by a TRS-covered employer
to provide services for which teacher certification is required. The active TRS members’
contribution rate for the year June 30, 2011 was 9.4 percent of their creditable earnings.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (continued)
B. Employee Retirement Systems & Plans (continued):
Teachers’ Retirement System (continued)
The same contribution rate applies to members whose first contributing service is on or after
Jan. 1, 2011, the effective date of the benefit changes contained in Public Act 96-0889. These
contributions, which may be paid on behalf of employees by the employer, are submitted to
TRS by the employer. The active member contribution rate was also 9.4 percent for the years
ended June 30, 2010 and 2009.
The State of Illinois makes contributions directly to TRS on behalf of North Cook Intermediate
Service Center No 1’s TRS covered employees.
On- behalf contributions. The State of Illinois makes employer pension contributions on
behalf of North Cook Intermediate Service Center No. 1. 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 Center recognized revenue and expenditures of $385,789 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 ($508,425) and 17.08
percent ($355,559), respectively.
North Cook Intermediate Service Center No. 1 makes other types of employer contributions
directly to TRS.
2.2 formula contributions. Employers contribute 0.58 percent of total creditable earnings
for the 2.2 formula change. This rate is specified by statute. Contributions for the year
ending June 30, 2011 were $9,686. Contributions for the years ending June 30, 2010 and
June 30, 2009 were $12,613 and $12,074, respectively.
Federal and special trust fund contributions. When TRS members are paid from federal
and special trust funds administered by the Center, there is a statutory requirement for the
Center to pay an employer pension contribution from those funds. Under a policy adopted
by the TRS Board of Trustees that was first effective for the fiscal year ended June 30,
2006, employer contributions for employees paid from federal and special trust funds will
be the same as the State contribution rate to TRS.
For the year ended June 30, 2011, the employer pension contribution was 23.10 percent of
salaries paid from federal and special trust funds. For the years ended June 30, 2010 and
2009, the employer contributions were 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 $156,988 were paid from federal and
special trust funds that required employer contributions of $36,264. For the years ended
June 30, 2010, and June 30, 2009, required Center contributions were $47,792 and $33,423,
respectively.
Early Retirement Option (ERO). North Cook Intermediate Service Center No. 1 is also
required to make one-time employer contributions to TRS for members retiring under the
Early Retirement Option. 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.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (continued)
B. Employee Retirement Systems & Plans (continued):
Teachers’ Retirement System (concluded)
For the year ended June 30, 2011, the Center paid $-0- to TRS for employer contributions
under the ERO program. For the years ended June 30, 2010 and June 30, 2009, the Center
paid $-0- in employer ERO contributions respectively .
Salary increases over 6 percent and excess sick leave.
If an employer grants salary increases over 6 percent and those salaries are used to
calculate a retiree’s final average salary, the employer makes a contribution to TRS. The
contribution will cover the difference in actuarial cost of the benefit based on actual
salary increases and the benefit based on salary increases of up to 6 percent.
For the year ended June 30, 2011, the Center paid $-0- to TRS for employer
contributions due on salary increases in excess of 6 percent. For the years ended June
30, 2010 and June 30, 2009, the Center paid $-0- to 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 year ended June 30, 2011, the Center paid $-0- to TRS for sick leave days
granted in the excess of the normal annual allotment. For the years ended June 30, 2010
and June 30, 2009, the Center paid $-0- in employer contributions granted for sick leave
days, respectively.
TRS financial information, an explanation of TRS benefits, and descriptions of member,
employer and state funding requirements can be found in the TRS Comprehensive Annual
Financial Report for the year ended June 30, 2010. The report for the year ended June 30, 2011,
is expected to be available in late 2011. The reports may be obtained by writing to the
Teachers’ Retirement System of the State of Illinois, 2815 West Washington Street, P.O. Box
19253, Springfield, IL 62794-9253. The most current report is also available on the TRS Web
site at http:// trs.illinois.gov .
Illinois Municipal Retirement Fund
Plan Description
The employer’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 employer plan is affiliated with the Illinois Municipal Retirement Fund
(IMRF), an agent multiple-employer plan. Benefit provisions are established by statute and may
only be changed by the General Assembly of the State of Illinois.
IMRF issues a publicly available financial report that includes financial statements and required
supplementary information. The report may be obtained on-line at www.imrf.org .
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (continued)
B. Employee Retirement Systems & Plans (concluded):
Illinois Municipal Retirement Fund (concluded)
Funding Policy
As set by statute, the employer Regular plan members are required to contribute 4.50 percent of
their annual covered salary. The statute requires employers to contribute the amount necessary,
in addition to member contributions, to finance the retirement coverage of its own employees.
The employer contribution rate for calendar year 2010 was 7.44 percent . The employer also
contri butes for disability benefits, death benefits and supplemental retirement benefits, all of
which are pooled at the IMRF level. Contribution rates for disability and death benefits are set
by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute.
Annual Pension Cost
The required contribution for calendar year 2010 was $29,862.
Three-Year Trend Information for the Regular Plan
Fiscal Annual Percentage Net
Year Pension of APC Pension
Ending Cost (APC) Contributed Obligation
12/31/10 $ 29,862 100% $ -0-
12/31/09 $ 26,006 100% $ -0-
12/31/08 $ 21,948 100% $ -0-
The required contribution for 2010 was determined as part of the December 31, 2008, actuarial
valuation using the entry age normal actuarial cost method. The actuarial assumptions at
December 31, 2008, included (a) 7.5 percent investment rate of return (net of administrative and
direct investment expenses), (b) projected salary increases of 4% 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 benefits increases of 3%
annually.
The actuarial value of the employer 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 employer
Regular plan’s unfunded actuarial accrued liability at December 31, 2008 is being amortized as
a level percentage of projected payroll on an open 10 year basis.
Funded Status and Funding Progress
As of December 31, 2010, the most recent actuarial valuation date, the Regular plan was 84.70
percent funded. The actuarial accrued liability for benefits was $536,418 and the actuarial value
of assets was $454,355, resulting in an underfunded actuarial accrued liability (UAAL) of
$82,063 . The covered payroll (annual payroll of active employees covered by the plan) was
$401,369 and the ratio of the UAAL to the covered payroll was 20 percent.
The schedule of funding progress, presented as RSI following the notes to the financial
statements, presents multiyear trend information about whether the actuarial value of the plan
assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (continued)
C. Postemployment Benefits other than Pensions:
1) Illinois Municipal Retirement Fund
Plan Description and Actuarial Valuation
In addition to providing the pension benefits described, the Intermediate Service Center No. 1
provides postemployment health care benefits (OPEB) for retired employees through a single
employer defined benefit plan. The benefits, benefit levels, employee contributions and
employer contributions are governed by the Intermediate Service Center No. 1 and can be
amended by board approval. The plan is not accounted for as a trust fund, as an irrevocable
trust has not been established to account for the plan. The plan does not issue a separate report.
For financial statement purposes, an actuarial valuation is required at least biennially for OPEB
plans with a total membership (including employees in active service, terminated employees
who have accumulated benefits but are not yet receiving them, and retired employees and
beneficiaries currently receiving benefits) of 200 or more, or at least triennially for plans with a
total membership of fewer than 200. As a result of these requirements, North Cook Intermediate
Service Center No. 1 was not required to have an actuarial valuation for the year ended June 30,
2011. July 1, 2009 was the most recent actuarial valuation of North Cook Intermediate Service
Center No. 1’s plan. The results of North Cook Intermediate Service Center No. 1’s latest
actuarial valuation are described below.
Benefits Provided
The Intermediate Service Center No. 1 provides continued health insurance coverage at the
blended employer rate to all eligible retirees in accordance with Illinois Compiled Statutes,
which creates an implicit subsidy of retiree health insurance. To be eligible for benefits, an
employee must qualify for retirement under the Intermediate Service Center No. 1 retirement
plan. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer and
the retiree is no longer eligible to participate in the plan, but can purchase a Medicare
supplement plan from the Intermediate Service Center No. 1 insurance provider.
Membership
At July 1, 2009 membership consisted of:
Retirees and Beneficiaries Currently Receiving Benefits -
Terminated Employees Entitled
to Benefits but not yet Receiving Them -
Active Employees 6
TOTAL 6
Participating Employers 1
Funding Policy
The Intermediate Service Center No. 1 is not required to and currently does not advance fund the
cost of benefits that will become due and payable in the future. Active employees do not
contribut e to the plan until retirement.
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NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (continued)
C. Postemployment Benefits other than Pensions (continued)
1) Illinois Municipal Retirement Fund (continued)
The Intermediate Service Center No. 1 had an actuarial valuation performed for the plan as of
July 1, 2009 to determine the funded status of the plan as of that date as well as the employer’s
annual required contribution (ARC) for the fiscal year ended June 30, 2010.
Annual OPEB Costs and Net OPEB Obligation
The Intermediate Service Center No. 1’s annual OPEB cost (expense) of $4,693 was equal to the
ARC for the fiscal year, as the transition liability was set at zero as of July 1, 2009. The
Intermediate Service Center No. 1’s annual OPEB cost, the percentage of annual OPEB cost
contributed to the plan and the net OPEB obligation for fiscal year 2010 was as follows
(information for the two preceding years before fiscal year 2010 is not available as an actuarial
valuation was performed for the first time as of July 1, 2009):
Fiscal
Year
Ended
Annual
OPEB
Cost
Employer
Contribut ions
Percentage of
Annual OPEB
Cost
Contributed
Net OPEB
Obligation
June 30, 2010 $ 4,693 $ - 0% $ 4,693
The net OPEB obligation as of July 1, 2009, was calculated as follows:
Annual Required Contribution $ 4,693
Interest on Net OPEB Obligation -
Adjustment to Annual Required Contribution -
Annual OPEB Cost 4,693
Contributions Made -
Increase in Net OPEB Obligation -
Net OPEB Obligation Beginning of Year -
NET OPEB OBLIGATION END OF YEAR $ 4,693
Funded Status and Funding Progress. The funded status of the plan as of July 1, 2009, was as
follows:
Actuarial Accrued Liability (AAL) $ 21,023
Actuarial Value of Plan Assets -
Unfunded Actuarial Accrued Liability (UAAL) 21,023
Funded Ratio (Actuarial Value of Plan Assets/AAL) 0.0%
Covered Payroll (Active Plan Members) $ N/A
UAAL as a Percentage of Covered Payroll 0.0%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future.
-44-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (continued)
C. Postemployment Benefits other than Pensions (continued)
1) Illinois Municipal Retirement Fund (concluded)
Examples include assumptions about future employment, mortality and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
The schedule of funding progress, presented as required supplementary information following
the notes to the financial statements, presents multi-year trend information that shows whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits.
Actuarial Methods and Assumptions - Projections of benefits for financial reporting purposes
are based on the substantive plan (the plan as understood by the employer and plan members)
and include the types of benefits provided at the time of each valuation and the historical pattern
of sharing of benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the
long-term perspective of the calculations.
In the July 1, 2009, actuarial valuation, the unit credit cost method was used. The actuarial
assumptions included a discount rate of 5.00% and an initial healthcare cost trend rate of
11.00% with a 5.00% increase for 2015 and later years. Both rates include a 2.00% inflation
assumption.
The actuarial value of assets was not determined as the Intermediate Service Center No. 1 has
not advance funded its obligation. The plan’s unfunded actuarial accrued liability is being
amortized using a closed, level dollar method. The remaining amortization period at July 1,
2009 was 30 years. Intermediate Service Center No. 1 has not recorded a post employment
benefit liability since the obligation was determined to be immaterial.
2) Teacher Health Insurance Security Fund
North Cook Intermediate Service Center No. 1 participates in the Teacher Health Insurance
Security (THIS) Fund, a cost-sharing, multi-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 the Teachers’ Retirement System (TRS). Annuitants may
participate in the state administered participating provider option plan or choose from several
managed care options. The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines
the benefit provisions of THIS Fund and amendments to the plan can be made only by
legislative action with the Governor’s approval.
The Illinois Department of Healthcare and Family Services (HFS) and the Illinois Department
of Central Management Services (CMS) administer the plan with the cooperation of TRS. The
director of HFS determines the rates and premiums for annuitants and dependent beneficiaries
and establishes the cost-sharing parameters.
-45-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Notes to The Financial Statements
June 30, 2011
4. OTHER INFORMATION (concluded)
C. Postemployment Benefits other than Pensions (concluded)
2) Teacher Health Insurance Security Fund (concluded)
Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active contributors
to the TRS who are not employees of the state make contributions to THIS. The percentage of
employer required contributions in the future will be determined by the director of HFS and will
not exceed 105 percent of the percentage of salary actually required to be paid in the previous
fiscal year.
On behalf contributions to THIS Fund
The State of Illinois makes employer retiree health insurance contributions on behalf of North
Cook Intermediate Service Center No. 1. State contributions are intended to match contributions
to THIS Fund from active members which were 0.88 percent of pay during the year ended June
30, 2011. State of Illinois contributions were $14,697, and North Cook Intermediate Service
Center No. 1 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 0.84 percent of pay or $18,267. Had Intermediate Service Center No. 1 recognized
revenue and expenditures for State contributions intended to match active member contributions
during the year ended June 30, 2009, under the current standards, the contribution match would
have been 0.84 percent of pay or $17,487.
Employer Contributions to THIS Fund
North Cook Intermediate Service Center No. 1 also makes contributions to THIS Fund. The
Center THIS Fund contribution was 0.66 percent during the years ended June 30, 2011, and 0.63
percent during the years ended June 30, 2010, and June 30, 2009. For the year ended June 30,
2011, North Cook Intermediate Service Center No. 1 paid $11,023 to the THIS Fund. For the
years ended June 30, 2010 and June 30, 2009, the Center paid $13,700 and $13,115 to the THIS
Fund, respectively, which was 100 percent of the required contribution.
Further information on THIS Fund
The publicly available financial report of the THIS Fund may be obtained by writing to the
Department of Healthcare and Family Services, 201 S. Grand Ave., Springfield, IL 62763-3838.
5. ON-BEHALF CONTRIBUTIONS
The State of Illinois paid the following retirement and other postemployment benefits on-behalf of
North Cook Intermediate Service Center No. 1:
TRS Pension Contribution $ 385,789
Teachers’ Health Insurance Security 14,697
$ 400,486
These amounts have been recorded in the accompanying financial statements as State revenue and
expenditures.
6. SUBSEQUENT EVENTS
Management has evaluated subsequent events through February 28, 2012, the date on which the
financial statements were available to be issued.
-46-
REQUIRED SUPPLEMENTARY INFORMATION
(OTHER THAN MANAGEMENT ’S DISCUSSION AND ANALYSIS)
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage of
Actuarial Value of Liability AAL Funded Covered Covered
Valuation Assets (AAL) (UAAL) Ratio Payroll Payroll
Date (a) Entry Age (b) (b-a) (a/b) ( c ) ((b-a)/c)
12/31/10 $454,355 $536,418 $82,063 84.70% $401,369 20.45%
12/31/09 $392,791 $430,067 $37,276 91.33% $321,454 11.60%
12/31/08 $384,133 $357,684 ($26,449) 107.39% $275,383 0.00%
On a market value basis, the actuarial value of assets as of December 31, 2010 is $494,878. On a market basis, the funded
ratio would be 92.26%.
-47-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Illinois Municipal Retirement Fund - Schedule of Funding Progress
June 30, 2011
(Unaudited)
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage of
Actuarial Value of (AAL) AAL Funded Covered Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) ( c ) ((b-a)/c)
7/1/09 $0 $21,023 $21,023 0.00% N/A 0.00%
-48-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Post Employment Benefits other than Pensions - Schedule of Funding Progress
June 30, 2011
(Unaudited)
Variance
Favorable
Budget Actual (Unfavorable)
REVENUES
Local Sources
Investment Income $ 40,000 $ 16,608 $ (23,392)
Services Provided Other LEA's 1,638,900 1,830,577 191,677
Local Fees 12,000 33,474 21,474
Contributions -0- 69 69
Total Local Sources 1,690,900 1,880,728 189,828
State Sources
Regional Safe Schools - General State Aid 732,000 733,015 1,015
Total State Sources 732,000 733,015 1,015
Total Direct Revenues 2,422,900 2,613,743 190,843
On-Behalf Payments -0- 400,486 400,486
Total Revenues 2,422,900 3,014,229 591,329
-49-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedule
General Fund
Year Ended June 30, 2011
Variance
Favorable
EXPENDITURES Budget Actual (Unfavorable)
Instruction
High School Programs
Salaries 523,000 465,277 57,723
Employee Benefits 218,200 203,511 14,689
Purchased Services 34,590 10,764 23,826
Supplies and Materials 40,590 26,553 14,037
Total Instruction 816,380 706,105 110,275
Support Services
Pupils
Attendance and Social Work Services
Salaries 251,000 354,036 (103,036)
Employee Benefits 68,500 59,029 9,471
Guidance Services
Salaries 63,500 63,439 61
Employee Benefits 29,000 26,042 2,958
Purchased Services 5,000 2,635 2,365
Supplies and Materials 5,000 5,395 (395)
Total Pupils 422,000 510,576 (88,576)
Instructional Staff
Improvement of Instruction Services
Purchased Services 3,000 2,340 660
Supplies and Materials 1,000 486 514
Total Instructional Staff 4,000 2,826 1,174
General Administration
Special Area Administrative Services
Salaries 151,100 151,058 42
Employee Benefits 66,400 92,990 (26,590)
Purchased Services 269,000 257,347 11,653
Supplies and Materials 17,000 19,808 (2,808)
Total General Administration 503,500 521,203 (17,703)
-50-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedules
General Fund (Continued)
Year Ended June 30, 2011
Variance
Favorable
Budget Actual (Unfavorable)
EXPENDITURES
ROE Services
Salaries -0- 5,500 (5,500)
Employee Benefits -0- 421 (421)
Purchased Services -0- 794 (794)
Supplies and Materials -0- 462 (462)
Other Objects -0- 165 (165)
Total ROE Services -0- 7,342 (7,342)
School Administration
Other Support Services
Salaries 204,000 204,900 (900)
Employee Benefits 24,625 21,132 3,493
Total School Administration 228,625 226,032 2,593
Business
Fiscal Services
Salaries 28,500 28,250 250
Employee Benefits 5,070 4,730 340
Facilities Acquisition
Purchased Services 5,000 8,610 (3,610)
Operations and Maintenance of Plant
Purchased Services 489,000 464,524 24,476
Supplies and Materials 25,000 12,990 12,010
Pupil Transportation Services
Employee Benefits -0- -0- -0-
Purchased Services 33,500 27,106 6,394
Food Services
Purchased Services 85,000 77,246 7,754
Total Business 671,070 623,456 47,614
Other Support Services
Purchased Services -0- 1,080 (1,080)
Total Other Support Services -0- 1,080 (1,080)
Total Support Services 1,829,195 1,892,515 (63,320)
Total Direct Expenditures 2,645,575 2,598,620 46,955
On-behalf Payments -0- 400,486 (400,486)
Total Expenditures 2,645,575 2,999,106 (353,531)
Excess (Deficiency) of Revenues
Over (Under) Expenditures $ (222,675) $ 15,123 $ 237,798
Fund Balance, Beginning of Year 2,071,166
Fund Balance, End of Year $ 2,086,289
-51-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedule
General Fund (Continued)
Year Ended June 30, 2011
Variance
Favorable
Budget Actual (Unfavorable)
REVENUES
Local Sources
Local Fees $ 90,000 $ 62,937 $ (27,063)
Miscellaneous 1,000 4,682 3,682
Total Local Sources 91,000 67,619 (23,381)
State Sources
Regional Safe Schools 610,000 1,013,380 403,380
I.S.C. Operations 185,000 339,997 154,997
Gifted Education -0- 45,400 45,400
Total State Sources 795,000 1,398,777 603,777
Federal Sources
Title I - School Improvement & Accountability 602,236 316,821 (285,415)
Title I - Reading First Part B SEA Funds -0- 42,517 42,517
Title I - Grants to Local Educational Agencies, Recovery Act 300,000 279,447 (20,553)
Education Jobs Fund -0- 66,741 66,741
Total Federal Sources 902,236 705,526 (196,710)
Total Direct Revenues 1,788,236 2,171,922 383,686
On-Behalf Payments -0- -0- -0-
Total Revenues 1,788,236 2,171,922 383,686
-52-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedule
Education Fund
Year Ended June 30, 2011
Variance
Favorable
EXPENDITURES Budget Actual (Unfavorable)
Instruction
High School Programs
Salaries 506,000 577,695 (71,695)
Supplies and Materials -0- 4,417 (4,417)
Total Instruction 506,000 582,112 (76,112)
Support Services
Pupils
Attendance and Social Work Services
Salaries 104,000 -0- 104,000
Total Pupils 104,000 -0- 104,000
Instructional Staff
Improvement of Instruction Services
Salaries 23,121 36,734 (13,613)
Employee Benefits 6,544 9,779 (3,235)
Purchased Services 761,954 508,667 253,287
Supplies and Materials 105,499 6,132 99,367
Total Instructional Staff 897,118 561,312 335,806
General Administration
Executive Administrative Services
Salaries 94,500 82,264 12,236
Employee Benefits 31,650 21,551 10,099
Purchased Services 61,000 24,797 36,203
Supplies and Materials 10,000 13,714 (3,714)
Capital Outlay 2,000 -0- 2,000
Other Objects 12,000 8,861 3,139
Special Area Administrative Services
Purchased Services -0- 3,790 (3,790)
Total General Administration 211,150 154,977 56,173
Business
Fiscal Services
Salaries 19,000 11,521 7,479
Employee Benefits 3,950 1,932 2,018
Purchased Services 44,000 39,312 4,688
Operations and Maintenance of Plant
Purchased Services 148,500 140,568 7,932
Supplies and Materials 10,000 1,341 8,659
Pupil Transportation Services
Salaries 35,000 31,431 3,569
Employee Benefits 5,700 5,410 290
Purchased Services 22,300 24,362 (2,062)
Supplies and Materials 1,000 952 48
Other Objects -0- 30 (30)
Total Business 289,450 256,859 32,591
-53-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedules
Education Fund (Continued)
Year Ended June 30, 2011
Variance
Favorable
Budget Actual (Unfavorable)
EXPENDITURES
Other Support Services
Salaries 9,950 14,229 (4,279)
Employee Benefits 3,237 2,937 300
Purchased Services 6,231 10,916 (4,685)
Other Expenses -0- -0- -0-
Total Other Support Services 19,418 28,082 (8,664)
Total Support Services 1,521,136 1,001,230 519,906
Nonprogrammed Charges
Other Payments to In-State Government Units
Purchased Services 323,250 199,964 123,286
Total Nonprogrammed Charges 323,250 199,964 123,286
Total Direct Expenditures 2,350,386 1,783,306 567,080
On-behalf Payments -0- -0- -0-
Total Expenditures 2,350,386 1,783,306 567,080
Excess (Deficiency) of Revenues
Over (Under) Expenditures $ (562,150) $ 388,616 $ 950,766
Fund Balance, Beginning of Year (56,329)
Fund Balance, End of Year $ 332,287
-54-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedule
Education Fund (Continued)
Year Ended June 30, 2011
Variance
Favorable
Budget Actual (Unfavorable)
REVENUES
Local Sources
Institute $ 320,000 $ 344,993 $ 24,993
Total Local Sources 320,000 344,993 24,993
State Sources
Bus Driver Certification 20,000 40,333 20,333
Bus Driver Training 40,000 54,695 14,695
Total State Sources 60,000 95,028 35,028
Total Direct Revenues 380,000 440,021 60,021
On-Behalf Payments -0- -0- -0-
Total Revenues 380,000 440,021 60,021
EXPENDITURES
Support Services
Instructional Staff
Improvement of Instruction Services
Salaries 15,000 15,000 -0-
Purchased Services 77,500 78,694 (1,194)
Supplies and Materials 24,000 18,046 5,954
Total Instructional Staff 116,500 111,740 4,760
ROE Services
Salaries 115,000 113,364 1,636
Employee Benefits 41,200 34,789 6,411
Purchased Services 107,500 88,391 19,109
Supplies and Materials 7,000 5,892 1,108
Capital Outlay -0- 8,110 (8,110)
Other Objects -0- 410 (410)
Total ROE Services 270,700 250,956 19,744
Total Support Services 387,200 362,696 24,504
Total Direct Expenditures 387,200 362,696 24,504
On-behalf Payments -0- -0- -0-
Total Expenditures 387,200 362,696 24,504
Excess (Deficiency) of Revenues
Over (Under) Expenditures $ (7,200) $ 77,325 $ 84,525
Fund Balance, Beginning of Year -0-
Fund Balance, End of Year $ 77,325
-55-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Budgetary Comparison Schedule
Nonmajor Special Revenue Fund
Year Ended June 30, 2011
Federal Grantor/ CFDA Project # or
Program or Cluster Number Contract # 7/01/09 - 6/30/10 7/01/10 - 06/30/11
Title (A) (B) (C) (D)
U.S. Dept. of Education passed through
Illinois State Board of Education (ISBE):
Title I - Part A Cluster
Title I - School Improvement & Accountability (M) 84.010A 10-4331-SS $ 469,899 $ 80,982
Title I - School Improvement & Accountability (M) 84.010A 11-4331-SS -0- 316,821
Title I - Grants to Local Educational Agencies, Recovery Act (M) 84.389 11-4854-00 -0- 299,443
Total Title I - Part A Cluster: 469,899 697,246
Reading First State Grants
Title I - Reading First Part B SEA Funds 84.357A 10-4337-00 13,177 42,517
13,177 42,517
ARRA Education Jobs Fund 84.410 11-4880-93 -0- 66,741
-0- 66,741
State Fiscal Stabilization Fund- Cluster
State Fiscal Stabilization Fund- Education State Grants Recovery 84.394 10-4850-93 110,500 -0-
State Fiscal Stabilization Fund- Government Services Recovery 84.397 10-4870-93 36,833 -0-
Total State Fiscal Stabilization Fund Cluster 147,333 -0-
Title II - Teacher Quality - Leadership Grant 84.367A 10-4935-SS 78,436 -0-
78,436 -0-
Total Expenditures of
Federal Awards $ 708,845 $ 806,504
(M) - Program was audited as a major program.
Expenditures
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2011
The accompanying notes are an integral part of this schedule.
-56-
NORTH COOK INTERMEDIATE SERVICE CENTER NO. 1
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2011
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of North
Cook Intermediate Service Center No. 1 and is presented on the modified accrual basis of accounting. The
information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this
schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
NOTE 2 – SUBRECIPIENTS
-NONE-NOTE
3 – DESCRIPTION OF MAJOR FEDERAL PROGRAM
The following federal programs were audited as major programs in accordance with the requirements of
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations .
Title I – School Improvement & Accountability:
This program is part of the Center’s System of Support Coordination and Services Plan. The program is part
of a strategy to nurture and assist low-performing schools in North Cook County. Services initially are
targeted in elementary and high schools now on the Academic Early Warning List (AEWL), with provision to
support additional schools when they are identified. Moreover, schools in jeopardy of being identified as
low-performing will be encouraged to access school improvement resources on a fee for services basis.
The goals of the program are to:
Establish a regional support system to provide improvement support to schools and districts on the
AEWL and AWL;
Assist other schools and districts whose performance make placement on the list in the near future likely;
Build capacity within each targeted school and district for continuous school improvement; and
Serve all schools and districts identified for support in the region and assist and collaborate with other
regional centers to provide full coverage of targeted districts through efficient and cost-effective
programs .
Title I – Grants to Local Educational Agencies, Recovery Act
The objective of this program is to help local educational agencies (LEAs) and schools improve the teaching
and learning of children failing, or most at-risk of failing, to meet challenging State academic achievement
standards.
NOTE 4 – NON-CASH ASSISTANCE
-NONE-NOTE
5 – AMOUNT OF INSURANCE
-NONE-NOTE
6 – LOANS OR LOAN GUARANTEES OUTSTANDING
-NONE-
-57-