FY11-ROE39-Fin-Full

              State of Illinois
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
FINANCIAL AUDIT
For the Year Ended June 30, 2011
Performed as Special Assistant Auditors
For the Office of the Auditor General
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
TABLE OF CONTENTS
JUNE 30,2011
TABLE OF CONTENTS
Agency Officials .
Financial Report Summary .
Financial Statement Report Summary ..
FINANCIAL SECTION
Independent Auditor's Report .
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing
Standards .
Schedule of Findings and Responses
Section I - Summary ofAuditor's Results .
Section II - Financial Statement Findings ..
Summary Schedule of Prior Audit Findings ..
Management's Discussion and Analysis .
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement ofNet Assets .
Statement of Activities ..
Fund Financial Statements
Balance Sheet - Governmental Funds .
Reconciliation of the Governmental Funds Balance Sheet
to the Statement ofNet Assets - Governmental Funds .
PAGE
1
2-3
4
5-6
7-8
9
10
11
12a-12f
13
14
15
16
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
TABLE OF CONTENTS
JUNE 30, 2011
Statement of Revenues, Expenditures, and Changes
in Fund Balances - Governmental Funds................................................ 17
Reconciliation ofthe Statement of Revenues, Expenditures and
Changes in Fund Balances to the Statement of Activities-
Governmental Funds............................................................................... 18
Statement ofNet Assets - Proprietary Fund 19
Statement of Revenues, Expenses, and Changes
in Fund Net Assets - Proprietary Fund 20
Statement of Cash Flows - Proprietary Fund.............................................. 21
Statement of Fiduciary Net Assets - Fiduciary Fund.................................. 22
Notes to the Financial Statements 23-55
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund Schedule of Funding Progress .
OTHER SUPPLEMENTAL INFORMATION
56
Combining Schedule of Accounts
General Fund.............................................................................................. 57-61
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - General Fund Accounts................................................... 62-66
Combining Schedule of Accounts
Education Fund........ 67-72
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - Education Fund Accounts................................................ 73-78
Budgetary Comparison Schedules
Education Fund
Adult Education Performance................................................................. 79
Adult Education Public Assistance......................................................... 80
Adult Education State Basic.................................................................... 81
Adult Education Federal Basic................................................................ 82
WIS-Year Round Youth Program I 83
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
TABLE OF CONTENTS
JUNE 30, 2011
Truants Alternative/Optional Education .
Gifted Program .
ROEIISC Operations .
Title II Teacher Quality ..
Regional Safe Schools ..
Early Childhood Block Grant .
Regional System of Support Provider (RESPRO) ..
Early Childhood Block Grant II .
Early Childhood Block Grant-Continuing Three to Five ..
Homeless Children Youth Program .
New Principals Mentoring .
ARRA-Title I-School Improvement and Accountability .
Combining Balance Sheet
Non-major Special Revenue Funds ..
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - Non-major Special Revenue Funds .
Combining Statement of Fiduciary Net Assets
Agency Funds .
Combining Statement of Changes in Assets and Liabilities
Agency Funds .
Schedule of Disbursements to School District Treasurers and
Other Entities - Distributive Fund .
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION#39
JUNE 30, 2011
OFFICIALS
Regional Superintendent
(Current and During the Audit Period)
Assistant Regional Superintendent (Current)
Assistant Regional Superintendent
(During the Audit Period, Acting Effective July 1, 2010
through August 15,2011)
Office is located at:
1690 Huston Dr.
Decatur, IL 62526
1
Mr. Matthew Snyder
No Current Assistant Regional
Superintendent
Mr. Matt Andrews
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
JUNE 30,2011
FINANCIAL REPORT SUMMARY
The financial 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 do not contain scope limitations, disclaimers, or other significant non-standard language.
SUMMARY OF AUDIT FINDINGS
Number of
Audit findings
Repeated audit findings
Prior recommendations implemented
Or not repeated
This Audit
oo
3
Prior Audit
3
o
o
An additional two matters which are less than significant deficiencies or material weaknesses but more than
inconsequential which have been reported in a Management Letter of Comments to the Regional Superintendent.
In prior years, these issues may have been included as immaterial findings in the auditors' reports.
SUMMARY OF FINDINGS AND RESPONSES
Item No. Page
NONE
Description
FINDINGS (GOVERNMENTAUDITING STANDARDS)
Finding Type
PRIOR FINDINGS NOT REPEATED (GOVERNMENTAUDITING STANDARDS)
10-01
10-02
10-03
Departure from Generally Accepted Accounting Principles
Controls Over Financial Statement Preparation
Improper Recording of Reimbursements and
Administrative Fees Between Programs
2
Material Weakness
Material Weakness
Material Weakness
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
JUNE 30, 2011
FINANCIAL REPORT SUMMARY (Concluded)
EXIT CONFERENCE
An informal exit conference was held on September 29, 2011. There were no audit findings to discuss.
Attending were Matt Snyder, Regional Superintendent, Ann Neal, Director of Business Operations, and Matt
Price, Kemper CPA Group LLP.
3
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
JUNE 30, 2011
FINANCIAL STATEMENT REPORT SUMMARY
The audit of the accompanying basic financial statements of the Regional Office of Education #39 was
performed by Kemper CPA Group LLP, Certified Public Accountants and Consultants.
Based on their audit, the auditors expressed an unqualified opinion on the Regional Office of Education
#39's basic financial statements.
4
KEMPER
.CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the accompanying financial
statements of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the Regional Office of Education #39, as of and for the year ended June 30,
2011, which collectively comprise the Regional Office of Education #39's basic financial statements as listed
in the table of contents. These financial statements are the responsibility of the Regional Office of Education
#39' s management. Our responsibility is to express opinions on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the Macon/Piatt Counties Regional Office of Education #39, as of
June 30, 2011, and the respective changes in financial position and cash flows, where applicable, thereof for
the year then ended in conformity with accounting principles generally accepted in the United States of
America.
As described in Note 1, the Regional Office of Education #39 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 the any of Regional Office of Education #39's
governmental funds' assets or liabilities nor was there any effect to the total amount of any of Regional
Office of Education #39's governmental fund balances as of and for the year ended June 30, 2011.
5
1413 Wabash Avenue- Mattoon, IL 61938
Phone: (217) 234-8801 Fax: (217) 234-8803 kempercpa.com
In accordance with Government Auditing Standards, we have also issued a report dated March 19, 2012 on
our consideration of the Regional Office of Education #39's internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
The Management's Discussion and Analysis and Illinois Municipal Retirement Fund Schedule of Funding
Progress on pages 12a through 12f and 56 are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Regional Office of Education #39's basic financial statements. The combining and individual
nonmajor fund financial statements, budgetary comparison schedules, and Schedule of Disbursements to
School District Treasurers and Other Entities are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual nonmajor fund financial
statements, budgetary comparison schedules, and Schedule of Disbursements to School District Treasurers
and Other Entities have been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Certified Public Accountants
and Consultants
Mattoon, Illinois
March 19, 2012
6
KEMPER
CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the Regional Office of Education #39, as of and for the year ended June 30, 2011, which
collectively comprise the Regional Office of Education #39's basic financial statements and have issued our
report thereon dated March 19, 2012. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control over Financial Reporting
Management of the Regional Office of Education #39 is responsible for establishing and maintaining
effective internal control over financial reporting. In planning and performing our audit, we considered the
Regional Office of Education #39'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 Regional Office of Education #39' s internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
Regional Office of Education #39's internal control over financial reporting.
A deficiency in internal control exits 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 the internal control over
financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses, as defined above.
7
1413 Wabash Avenue Mattoon, IL 61938
Phone: (217) 234-8801 Fax: (217) 234-8803 kempercpa.com
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Regional Office of Education #39's financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express such
an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards.
We noted certain matters which we have reported to management of the Regional Office of Education #39 in
a separate letter dated March 19,2012.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois State
Board of Education, federal awarding agencies, and pass-through entities and is not intended to be and
should not be used by anyone other than these specified parties.
Certified Public Accountants
and Consultants
Mattoon, Illinois
March 19,2012
8
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
SCHEDULE OF FINDINGS AND RESPONSES
JUNE 30, 2011
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued:
Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deficiency(ies)?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
• Material weakness(es) identified?
• Significant deficiency(ies)?
Unqualified
No
No
No
N/A
Type of auditor's report issued on compliance for major programs: N/A
Any audit findings disclosed that are required to be reported in accordance with
OMB Circular A-133, Section 510(a)? N/A
Identification ofmajor programs:
CFDA Number(s)
N/A
Name of Federal Program or Cluster
N/A
Dollar threshold used to distinguish between Type A and Type B programs: N/A
Auditee qualified as a low-risk auditee? N/A
9
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
SCHEDULE OF FINDINGS AND RESPONSES
JUNE 30, 2011
SECTION II - FINANCIAL STATEMENT FINDINGS
There are no audit findings for the year ended June 30, 2011.
10
Finding No.
10-01
10-02
10-03
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
SCHEDULE OF FINDINGS AND RESPONSES
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Condition
Departure from Generally Accepted Accounting Principles
Controls Over Financial Statement Preparation
Improper Recording of Reimbursements and
Administrative Fees Between Programs
11
Current Status
Corrected
Corrected
Corrected
MANAGEMENT'S DISCUSSION AND ANALYSIS
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The Regional Office of Education #39 for the Counties of Macon and Piatt provides this Management's
Discussion and Analysis of its financial statements. This narrative overview and analysis of the financial
activities is for the fiscal year ended June 30, 2011. Readers are encouraged to consider the information
in conjunction with the Regional Office's financial statements which follows.
2011 Financial Highlights
• Within the Governmental Funds, the General Fund revenues increased by $2,313,833 from
$1,047,144 in fiscal year 2010 to $3,360,977 in FYl1. General Fund expenditures increased by
$2,000,104 from $1,097,010 in FYI0 to $3,097,114 in FYl1.
• Within the Governmental Funds, the Education Fund and Non-Major Funds revenue decreased by
$1,060,115 from $3,305,350 in FYI0 to $2,245,235 in FYl1. The Special Revenue Fund
expenditures decreased by $1,513,510 from $3,528,007 in FYI0 to $2,014,497 in FYl1.
• Within the Proprietary Funds, revenues decreased $1,295 from $10,626 in FYI0 to $9,331 in
FYl1. Expenditures decreased $3,818 from $14,854 in FYI0 to $11,036 in FYl1.
• During fiscal year 2011 the Regional Office of Education #39 implemented Governmental
Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, which required certain programs and funds to be
reclassified and the restatement of beginning fund balances as detailed in Note 15 to the financial
statements. Because of these reclassifications the fund analysis is not comparable between fiscal
year 2010 and fiscal year 2011.
Using This Report
This report consists of a series of financial statements and other information, as follows:
• Management's Discussion and Analysis introduces the basic financial statements and provides an
analytical overview ofthe Regional Office's financial activities.
• The Government-wide financial statements consist of a Statement of Net Assets and a Statement
of Activities. These provide information about the activities of the Regional Office of Education
as a whole and present an overall view ofthe Office's finances.
• Fund financial statements report the Regional Office's operations in more detail than the
Government-wide statements by providing information about the most significant funds.
• Notes to the financial statements provide additional information that is needed for a full
understanding ofthe data provided in the basic financial statements.
• Required supplementary information further explains and supports the financial statements and
supplementary information provides detail information about the non-major funds.
Reporting the office as a Whole
The Statement ofNet Assets and the Statement of Activities
The Government-wide statements report information about the Regional Office of Education #39 as a
whole. The Statement of Net Assets includes all of the assets and liabilities. All ofthe current year
12a
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or
paid, using accounting methods similar to those used by private-sector companies.
The two Government-wide statements report the Office's net assets and how they have changed. Net assets­the
difference between the assets and liabilities - are one way to measure the Office's financial health or
position.
• Over time, increases or decreases in the net assets can be an indicator of whether financial position is
improving or deteriorating, respectively.
• To assess the Regional Office's overall health, additional non-financial factors, such as new laws,
rules, regulations, and actions by officials at the state level need to be considered.
The Government-wide financial statements present all of the Office's activities as governmental and business­type
activities. Local, state and federal aid finance most of these activities.
Fund Financial Statements
The fund financial statements provide detailed information about the Regional Office's funds. Funds are
accounting devices which allows the tracking of specific sources of funding and spending on particular
programs. Some funds are required by state law. The Regional Office of Education #39 established other
funds to control and manage money for particular purposes.
The Office has three kinds of funds:
1. Governmental funds account for all of the Office's services. These focus on how cash and other
financial assets that can be readily converted to cash flow in and out and the balances left at year-end
that are available for spending. Consequently, the governmental fund statements provide a detailed
short-term view that helps determine whether there are more or fewer resources that can be spent in the
near future to finance the Office's programs. The Office's Governmental Funds include: the General
Fund and the Special Revenue funds, which include education and other non major funds.
The governmental funds' required financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances.
2. Proprietary funds' are funds generated from hosting educational workshops for professional
development.
The proprietary funds' required financial statements including a Statement of Net Assets, a Statement of
Revenues, Expenses, and Changes in Fund Net Assets and a Statement of Cash Flows.
3. Fiduciary funds are used to account for assets held by the Regional Office of Education #39 in a trust
capacity or as an agent for individuals and private or governmental organizations. These funds are
custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.
The fiduciary funds' required financial statements include a Statement of Fiduciary Net Assets.
12b
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Office-Wide Financial Analysis
As noted earlier, net assets may serve when examined over time as one indicator of the financial position
of the Regional Office. The net assets at the end of FY11 totaled approximately $2,961,145. The
analysis that follows provides a summary ofthe Office's net assets at June 30, 2011 and 2010.
CONDENSED STATEMENT OF NET ASSETS
June 30,2011 and 2010
Business-Type
Governmental Activities Activities Total
2011 2010 2011 2010 2011 2010
Current assets $3,158,016 $2,922,441 $ 7,523 $10,711 $3,165,539 $2,933,152
Noncurrent, net 82,203 104,466 1,001 2,267 83,204 106,733
Total assets 3,240,219 3,026,907 8,524 12,978 3,248,743 3,039,885
Current liabilities 284,083 263,978 50 2,799 284,133 266,777
Long-term liabilities 3,465 7,681 3,465 7,681
Total liabilities 287,548 271,659 50 2,799 287,598 274,458
Net assets:
Invested in capital assets 82,203 104,466 1,001 2,267 83,204 106,733
Restricted for educational
purposes 94,586 100,392 94,586 100,392
Unrestricted 2,775,882 2,550,390 7,473 7,912 2,783,355 2,558,302
Total net assets $2,952,671 $2,755,248 $ 8,474 $10,179 $2,961,145 $2,765,427
12c
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The following analysis shows the changes in net assets for the years ended June 30, 2011 and 2010.
CHANGES IN NET ASSETS
For the Years Ended June 30, 2011 and 2010
Business-Type
Governmental Activities Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services $ $ $ 9,331 $ 10,626 $ 9,331 $ 10,626
Operating grants &
contributions 1,907,874 1,274,521 1,907,874 1,274,521
General revenues:
Local sources 1,794,247 1,152,754 1,794,247 1,152,754
State sources 1,060,534 1,635,816 1,060,534 1,635,816
Federal sources 185,039 185,039
Administrative:
On-behalf payments - State 582,094 574,480 582,094 574,480
Interest 5,301 4,099 5,301 4,099
Total revenues 5,350,050 4,826,709 9,331 10,626 5,359,381 4,837,335
Expenses:
Program expenses:
Instructional services:
Salaries & benefits 3,013,006 2,614,353 3,013,006 2,614,353
Purchased services 1,315,636 1,149,030 1,315,636 1,149,030
Supplies & materials 202,652 196,463 202,652 196,463
Other obj ects 719 2,745 719 2,745
Depreciation 37,930 28,218 37,930 28,218
Administrative:
On-behalf payments - State 582,094 574,480 582,094 574,480
Business-type expenses 11,036 14,854 11,036 14,854
Total expenses 5,152,037 4,565,289 11,036 14,854 5,163,073 4,580,143
Change in net assets 198,013 261,420 (1,705) (4,228) 196,308 257,192
Net assets, beginning ofyear 2,754,658 2,493,828 10,179 14,407 2,764,837 2,508,235
Net assets, end of year $ 2,952,671 $ 2,755,248 $ 8,474 $ 10,179 $ 2,961,145 $ 2,765,427
Governmental Activities
Revenues for governmental activities were $5,350,050 and expenses were $5,152,037. The Regional
Office of Education #39 experienced an increase in net assets of $198,013. The increase was a result of
12d
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
adding two School Improvement Grants, ARRA Title I School improvement, and the ARRA Education
Jobs Fund Programs.
Financial Analysis ofthe Regional Office of Education #39 Funds
As previously noted, the Regional Office of Education #39 uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. The Agency's Governmental Funds
reported combined fund balances of $2,665,280 for FY11, an increase of $499,313 over FY10 fund
balance of $ 2,165,967.
Governmental Fund Highlights:
• County support for the Regional Office of Education #39 remained at FY10 levels in FY11.
• The State aid foundation level remained at $6,119 for FY11. This helped with the reduction of
grant dollars provided for the Future's Program, the Adult Education Program, and the Regional
Safe School.
• Became fiscal agent for the Illinois Association of Regional Superintendents of Schools School
Improvement Grant resulting in an increase of funds.
Proprietary Fund Highlights:
• In FY11, the Regional Office offered 43 administrator and teacher workshops. As of July 1,2011,
the Regional Office anticipates having at least 38 workshops in FY12.
• The Regional Office of Education used the Institute Fund to pay for several workshops during
FY11. This resulted in less money being collected by the Regional Office for this fund.
Budgetary Highlights:
The Regional Office of Education #39 annually adopts budgets for several funds. The Resource Library
Cooperative budget and the Heartland Vocational Cooperative budget are prepared by the Regional
Superintendent or program coordinator and serve as a guideline for activities and expenditures. These
two entities are considered separate from the Regional Office. They are audited on an annual basis by
outside auditing firms and budgets are submitted to the Illinois State Board of Education and the Illinois
Community College Board. The Regional Superintendent annually prepares an Office Operations Budget
and submits it to the two County Boards for their approval. The Office Operations budget covers a fiscal
year which runs from December 1 to November 30. All grant budgets are prepared by the Regional
Office of Education #39 and submitted to the granting agency for approval. Amendments must be
submitted under guidelines established by the granting agency. Schedules showing the budget amounts
compared to the Office's actual financial activity are included in the supplementary information of this
report.
12e
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Capital Assets
Capital assets of the Regional Office of Education #39 include office equipment, lease improvements,
computers, audio-visual equipment and office furniture. The Regional Office of Education #39 maintains
an inventory of capital assets which have been accumulated over time. Governmental activities net capital
assets for FY11 were $82,203 and for FY10 were $104,466. The decrease was due to many ISBE
approved budgets not including purchasing of equipment; budgets were used for personnel salaries and
benefits.
Economic Factors and Next Year's Budget
At the time these financial statements were prepared and audited, the Regional Office was aware of
several existing circumstances that could affect its financial health in the future:
• The interest rate on investments continues to increase very slightly and will impact interest
earned.
• Grant funding will decrease for Illinois State Board of Education-Regional Safe Schools
Program, Truants Alternative/Optional Education Program, and School Services.
• County funding for FY12 will likely decrease from the FY11 level.
• Slow receipt of monies from the State due to the State's budget issues and backlogs.
• The Regional Office of Education #39 will be the fiscal agent for School Improvement
1003(g) grants to the Sandoval, DePue, and Egyptian school districts through the Illinois State
Board of Education and Administrative Agent for Heartland Region Education for
Employment.
• Resource Loan Library ceased operations as of June 30, 2011.
Contacting the Regional Office's Financial Management
This financial report is designed to provide the Regional Offices' citizens, taxpayers, clients, and other
constituents with a general overview of its finances and to demonstrate the accountability for the money it
receives. If the reader has questions concerning this report or needs additional financial information,
please contact the Regional Superintendent of the Regional Office of Education #39 at 1690 Huston
Drive, Decatur, IL 62526.
12f
BASIC FINANCIAL STATEMENTS
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF NET ASSETS
JUNE 30,2011
Primary Government
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:
Cash and cash equivalents $ 1,690,181 $ 7,523 $ 1,697,704
Due from other governments:
Local 536,215 536,215
State 840,373 840,373
Federal 47,489 47,489
Accounts receivable 43,758 43,758
Total current assets 3,158,016 7,523 3,165,539
Noncurrent assets:
Capital assets, being depreciated, net 82,203 1,001 83,204
Total noncurrent assets 82,203 1,001 83,204
TOTAL ASSETS 3,240,219 8,524 3,248,743
LIABILITIES
Current liabilities:
Accounts payable 282,632 50 282,682
Deferred revenue 1,451 1,451
Total current liabilities 284,083 50 284,133
Noncurrent liabilities:
Liability for compensated absences 3,465 3,465
TOTAL LIABILITIES 287,548 50 287,598
NET ASSETS
Invested in capital assets 82,203 1,001 83,204
Restricted for educational purposes 94,586 94,586
Unrestricted 2,775,882 7,473 2,783,355
TOTAL NET ASSETS $ 2,952,671 $ 8,474 $ 2,961,145
The notes to the financial statements are an integral part ofthis statement.
13
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Program Revenues
Net (Expense) Revenue and
Changes in Net Assets
$ 3,013,006 $ - $ 1,450,507 $ (1,562,499) $ - $ (1,562,499)
1,315,636 - 311,684 (1,003,952) - (1,003,952)
202,652 - 130,016 (72,636) - (72,636)
719 - - (719) - (719)
37,930 - - (37,930) - (37,930)
15,667 15,667 - 15,667
582,094 - - (582,094) - (582,094)
5,152,037 - 1,907,874 (3,244,1632- - (3,244,163)
11,036 9,331 - - (1,705) (1,705)
11,036 9,331 - - (1,705) (1,705)
$ 5,163,073 $ 9,331 $ 1,907,874 (3,244,163) (1,705) (3,245,868)
GENERAL REVENUES:
Local sources 1,794,247 - 1,794,247
State sources 1,060,534 - 1,060,534
On-behalfpayments - State 582,094 - 582,094
Investment earnings 5,301 - 5,301
Total General Revenues 3,442,176 - 3,442,176
CHANGE IN NET ASSETS 198,013 (1,705) 196,308
NET ASSETS - BEGINNING, RESTATED 2,754,658 10,179 2,764,837
NET ASSETS - ENDING $ 2,952,671 $ 8,474 $ 2,961,145
The notes to the financial statements are an integral part ofthis statement.
14
FUNCTIONSIPROGRAMS
Primary Government:
Governmental Activities:
Instructional Services
Salaries and benefits
Purchased services
Supplies and materials
Other objects
Depreciation expense
Capital outlay
Administrative:
On-behalfpayments - State
Total Governmental Activities
Business-Type Activities:
Workshop fees
Total Business-Type Activities
TOTAL PRIMARY GOVERNMENT
Expenses
Charges for
Services
Operating
Grants and
Contributions
Primary Government
Governmental Business-Type
Activities Activities Total
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2011
Total
General Education Non-Major Governmental
Fund Fund Funds Eliminations Funds
ASSETS
Cash and cash equivalents $ 1,593,626 $ 394 $ 96,161 $ - $ 1,690,181
Due from other funds 1,017,279 - - (1,017,279)
Due from other governments:
Local 536,215 - - - 536,215
State - 840,373 - - 840,373
Federal - 47,489 - - 47,489
Accounts receivable 43,758 - - - 43,758
TOTAL ASSETS $ 3,190,878 $ 888,256 $ 96,161 $ (1,017,279) $ 3,158,016
LIABILITIES
Accounts payable $ 207,697 $ 72,966 $ 1,969 $ - $ 282,632
Due to other funds 202,383 814,896 - (1,017,279)
Deferred revenue 1,451 208,653 - - 210,104
Total Liabilities 411,531 1,096,515 1,969 (1,017,279) 492,736
FUND BALANCES (DEFICIT)
Restricted - 394 94,192 - 94,586
Assigned 38,088 - - - 38,088
Unassigned 2,741,259 (208,653) - - 2,532,606
Total Fund Balances (Deficit) 2,779,347 (208,259) 94,192 - 2,665,280
TOTAL LIABILITIES AND FUND BALANCES $ 3,190,878 $ 888,256 $ 96,161 $ (1,017,279) $ 3,158,016
The notes to the fmancial statements are an integral part ofthis statement.
15
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2011
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement ofNet Assets are
different because:
Capital assets used in governmental activities are not
fmancial resources and, therefore, are not reported in the funds.
Long-term liabilites, including compensated absences, are not due and
payable in the current period and therefore are not reported in the funds.
Some revenues will not be collected for several months after the Regional
Office's fiscal year ends, they are not considered "available" revenues
and are deferred in the governmental funds.
NET ASSETS OF GOVERNMENTAL ACTIVITIES
The notes to the fmancial statements are an integral part of this statement.
16
$ 2,665,280
82,203
(3,465)
208,653
$ 2,952,671
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Total
General Education Non-Major Governmental
Fund Fund Funds Eliminations Funds
REVENUES
Local sources $1,739,622 $ - $ 54,625 $ - $ 1,794,247
State sources 1,034,383 1,712,095 1,140 - 2,747,618
On-behalf payments - State 582,094 - - - 582,094
Federal sources 4,878 477,375 - - 482,253
Total Revenues 3,360,977 2,189,470 55,765 - 5,606,212
EXPENDITURES
Instructional Services:
Salaries and benefits 1,527,256 1,470,787 19,179 - 3,017,222
I1lrchased services 945,617 297,238 50,402 - 1,293,257
Supplies and materials 41,428 152,814 8,410 - 202,652
Other objects 719 - - - 719
On-behalf payments - State 582,094 - - - 582,094
Capital outlay - 15,667 - - 15,667
Total Expenditures 3,097,114 1,936,506 77,991 - 5,111,611
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 263,863 252,964 (22,226) - 494,601
OTHER FINANCING SOURCES (USES):
Transfers in 231,373 - - (231,373)
Transfers out (229,545) (1,828) - 231,373
Interest 5,301 - - - 5,301
Total Other Financing Sources (Uses) 7,129 (1,828) - - 5,301
NET CHANGE IN FUND BALANCE 270,992 251,136 (22,226) - 499,902
FUND BALANCE (DEFICIT) - BEGINNING,
RESTATED 2,508,355 (459,395) 116,418 - - 2,165,378
FUND BALANCE (DEFICIT) - ENDING $2,779,347 $ (208,259) $ 94,192 $ - $ 2,665,280
The notes to the fmancial statements are an integral part ofthis statement.
17
MACON/PIATI COUNTIES
REGIONAL OFFICE OF EDUCATION #39
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
NET CHANGE IN FUND BALANCES GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement ofActivities are
different because:
$ 499,902
Governmental funds report capital outlays as expenditures. However, in the
Statement ofActivities, the cost ofthose assets is allocated over their estimated
useful lives and reported as depreciation expense.
Capital outlay
Depreciation expense
Prior year's prepaid expenses were recognized as capital assets in the
government-wide financial statements; however, they are recognized as
current year expenditures in the governmental funds.
Accrued payroll and benefits costs which reflect the amount ofvacation pay that has
been earned by the Regional Office ofEducation #39's employees
in prior years and was paid in the current year, but is not reported in
the governmental funds
$ 15,667
(37,930) (22,263)
(22,379)
4,216
Some revenues will not be collected for several months after the Regional
Office's fiscal year ends, they are not considered "available" revenues
and are deferred in the governmental funds.
FYI0 deferred revenue recognized in FYll
FYll revenue deferred
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
$ (470,116)
208,653 (261,463)
$ 198,013
The notes to the financial statements are an integral part ofthis statement.
18
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF NET ASSETS
PROPRIETARY FUND
JUNE 30, 2011
Business-Type
Activities ­Enterprise
Fund
Workshop
Reimbursement Total
ASSETS
Current Assets:
Cash and cash equivalents
Total current assets
Noncurrent assets:
Capital assets, net
TOTAL ASSETS
Current Liabilities:
Accounts payable
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets
Unrestricted
TOTAL NET ASSETS $
$ 7,523 $ 7,523
7,523 7,523
1,001 1,001
8,524 8,524
50 50
50 50
1,001 1,001
7,473 7,473
8,474 =$====8=,4=7=4=
The notes to the financial statements are an integral part ofthis statement.
19
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2011
Business-Type
Activities ­Enterprise
Fund
Workshop
Reimbursement Total
OPERATING REVENUES
Workshop fees
Total Operating Revenues
OPERATING EXPENSES
Salaries and benefits
Purchased services
Supplies and materials
Depreciation
Total Operating Expenses
CHANGE IN NET ASSETS
TOTAL NET ASSETS - BEGINNING
TOTAL NET ASSETS - ENDING
$
$
9,331 $ 9,331
9,331 9,331
1,141 1,141
3,992 3,992
4,637 4,637
1,266 1,266
11,036 11,036
(1,705) (1,705)
10,179 10,179
8,474 $ 8,474
The notes to the financial statememts are an integral part ofthis statement.
20
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2011
Business-Type
Activities ­Enterprise
Fund
Workshop
Reimbursement Total
Cash Flows from Operating Activities:
Receipts from customers
Payments to suppliers and providers of goods
and services
Payments to employees
Net Cash Provided by (Used for) Operating Activities
Net Increase (Decrease) in Cash
Cash and cash equivalents - Beginning
Cash and cash equivalents - Ending
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Depreciation
Decrease in accounts payable
Net Cash Provided by (Used for) Operating Activities
$
$
$
$
9,331
(11,378)
(1,141)
(3,188)
(3,188)
10,711
7,523
(1,705)
1,266
(2,749)
(3,188)
$
$
$
$
9,331
(11,378)
(1,141)
(3,188)
(3,188)
10,711
7,523
(1,705)
1,266
(2,749)
(3,188)
The notes to the financial statements are an integral part ofthis statement.
21
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUND
JUNE 30, 2011
ASSETS
Cash and cash equivalents
Due from other governments
TOTAL ASSETS
LIABILITIES
Due to other governments
TOTAL LIABILITIES
$
$
$
$
Agency
Funds
1,341
1,639,287
1,640,628
1,640,628
1,640,628
The notes to the financial statements are an integral part ofthis statement.
22
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Macon/Piatt Counties Regional Office of Education #39 was formed under the provisions of the
State of Illinois, Illinois State Board of Education.
In 2011, the Regional Office of Education #39 implemented Governmental Accounting Standards Board
(GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, GASB
Statement No. 59, Financial Instruments Omnibus, and GASB Statement No. 62, Codification of
Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. The Regional Office of Education #39 implemented these standards during the current
year; however, GASB Statements No. 59 and 62 had no impact on the financial statements. The
implementation of GASB Statement No. 54 changed fund balance reporting for governmental funds by
adding some additional fund balance classifications, clarifying governmental fund type definitions, and
providing additional disclosures on how fund balance constraints are imposed and may be modified or
eliminated.
A. DATE OF MANAGEMENT'S REVIEW
Management has evaluated subsequent events through March 19, 2012, the date when the financial
statements were available to be issued.
B. FINANCIAL REPORTING ENTITY
The Regional Superintendent is charged with responsibility for township fund lands; registration of the
names of applicants for scholarships to State-controlled universities; examinations and related duties;
visitation of public schools; direction of teachers and school officers; to serve as the official advisor and
assistant of school officers and teachers; to conduct teachers institutes as well as to aid and encourage
the formation of other teachers' meetings and assist in their management; to evaluate the schools in the
region; to examine evidence of indebtedness; to file and keep the returns of elections required to be
returned to the Regional Superintendent's office; and to file and keep the reports and statements returned
by school treasurers and trustees.
The Regional Superintendent is also charged with the responsibilities of conducting a special census,
when required; providing notice of money distributed to treasurers, board presidents, clerks, and
secretaries of the school districts on or before each September 30; maintenance of a map and numbering
of the Regional Office of Education #39's districts; providing township treasurers with a list of district
treasurers; to inspect and approve building plans which comply with State law; to perform and report on
annual building inspections; to investigate bus drivers for valid bus driver permits and take related action
as may be required; to maintain a list of unfilled teaching positions and to carry out other related duties
required or permitted by law.
23
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. FINANCIAL REPORTING ENTITY (Concluded)
The Regional Superintendent is responsible for inspection and approval or rejection of school treasurers'
bonds. The Regional Superintendent is also required to provide the State Board of Education with an
affidavit showing that the treasurers of school districts within their region are properly bonded.
The Regional Superintendent is also responsible for apportionment and payment of funds received from
the State for the districts in the region, or see that no payments are made unless the treasurer has filed or
renewed appropriate bond and that the district has certified publication of the annual financial report.
The Regional Superintendent is required to provide opinions and advice related to controversies under
school law.
For the period ended June 30, 2011, the Regional Office of Education #39 applied for, received, and
administered numerous State and federal programs and grants in assistance and support of the
educational activities of the school districts in Regional Office of Education #39. Such activities are
reported as a single special revenue fund (Education Fund).
C. SCOPE OF THE REPORTING ENTITY
The Regional Office of Education #39's reporting entity includes all related organizations for which they
exercise oversight responsibility.
The Regional Office of Education #39 has developed criteria to determine whether outside agencies with
activities which benefit the citizens of the region, including districts or joint agreements which serve
pupils from numerous regions, should be included in its financial reporting entity. The criteria include,
but are not limited to, whether the Regional Office of Education #39 exercises oversight responsibility
(which includes financial interdependency, selection of governing authority, designation of management,
ability to significantly influence operations, and accountability for fiscal matters), scope of public
service, and special financing relationships.
The districts and joint agreements have been determined not to be a part of the reporting entity after
applying the manifesting of oversight, scope of public service, and special financing relationships criteria
and are therefore excluded from the accompanying financial statements because the Regional Office of
Education #39 does not control the assets, operations, or management of the districts or joint
agreements. In addition, the Regional Office of Education #39 is not aware of any entity, which would
exercise such oversight as to result in the Regional Office of Education #39 being considered a
component unit ofthe entity.
24
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Statement of Net Assets and the Statement of Activities are government-wide financial statements.
They report information on all of the Regional Office of Education #39's activities with most of the
inter-fund activities removed. Governmental activities include programs supported primarily by State
and federal grants and other intergovernmental revenues. The Regional Office of Education has one
business-type activity that relies on fees and charges for support.
The Regional Office of Education #39's government-wide financial statements include a Statement of
Net Assets and a Statement of Activities. These statements present a summary of governmental and
business-type activities for the Regional Office of Education #39 accompanied by a total column. These
statements are presented on an "economic resources" measurement focus as prescribed by GASB
Statement No. 34. All of the Regional Office of Education #39's assets and liabilities, including capital
assets, are included in the accompanying Statement of Net Assets. The Statement of Activities
demonstrates the degree to which the direct expenses of a given function are offset by program revenues.
Direct expenses are those that are clearly identifiable with a specific function. Program revenues include
1) charges for services, and 2) grants and contributions that are restricted to meeting operational or
capital requirements of a particular function.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds are reported as separate columns in the fund financial statements.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to inter-fund
activities, such as, payables, receivables and transfers. Inter-fund activities between governmental funds
and between governmental funds and proprietary funds appear as due to/due from on the Governmental
Fund Balance Sheet and Proprietary Fund Statement of Net Assets and as other resources and other uses
on the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances and on
the Proprietary Fund Statement of Revenues, Expenses and Changes in Fund Net Assets. All inter-fund
transactions between governmental funds are eliminated on the government-wide financial statements.
Inter-fund activities between governmental funds and business-type funds remain as due to/due from on
the government-wide financial statements. All internal balances in the Statement of Net Assets have
been eliminated except those representing balances between the governmental activities and the
business-type activities. In the Statement of Activities those transactions between governmental and
business-type activities have not been eliminated.
The purpose of inter-fund borrowing and permanent transfers is to cover temporary or permanent short
falls in cash flow within grant programs and funds.
25
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. PROPRIETARY FUND FINANCIAL STATEMENTS
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary
fund and non-major funds aggregated.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual
basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included
on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Fund Net Assets
present increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of
accounting, revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses
are those expenses that are essential to the primary operations of the fund. All other expenses are
reported as non-operating expenses.
F. GOVERNMENTAL FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund
balances and changes in fund balances as presented in these statements to the net assets and changes in
net assets presented in the government-wide financial statements.
The governmental fund financial statements have been prepared in accordance with generally accepted
accounting principles on the modified accrual basis. Under the modified accrual basis of accounting,
revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current
period. 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 recognized in the accounting period in which the fund liability is
incurred, if measurable, except expenditures for prepaid expenses, and other long-term obligations,
which are recognized when paid.
26
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized
as revenue as soon as all eligibility requirements imposed by the grantor have been met.
The governmental funds financial statements focus on the measurement of spending, or "financial flow," and
the determination of changes in financial position, rather than upon net income determination. This means
that only current assets and current liabilities are generally included on their balance sheets. The reported
fund balance (net current assets) is considered a measure of "available spendable resources." Governmental
fund operating statements present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they are said to present a
summary of sources and uses of"available spendable resources" during a period.
In applying the susceptible-to-accrual concept to intergovernmental revenues, the legal and contractual
requirements of the numerous individual programs are used as guidance. There are, however, essentially
two types of these revenues. In one, monies must be expended on the specific purpose or project before any
amounts will be paid to the Regional Office of Education #39; therefore, revenues are recognized based
upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of expenditure
and are usually recoverable only for failure to comply with prescribed compliance requirements. These
resources are reflected as revenues at the time of receipt or earlier if the susceptible-to-accrual criteria are
met.
Under the terms of grant agreements, MaconlPiatt Counties Regional Office of Education #39 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 Regional Office of Education #39's policy to first apply restricted funds to
such programs, and then unrestricted funds. For unrestricted funds, committed funds are used first, then
assigned funds, then unassigned funds if any.
H. FUND ACCOUNTING
The Regional Office of Education #39 uses funds to maintain its financial records during the year. A fund is
defined as a fiscal and accounting entity with a self-balancing set of accounts. The Regional Office of
Education #39 uses governmental, proprietary, and fiduciary funds.
27
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS
Governmental funds are those through which most governmental functions typically are reported.
Governmental funds reporting focuses on the sources, uses, and balances of current financial resources.
Expendable assets are assigned to the various governmental funds according to the purpose for which they
mayor must be used. Current liabilities are assigned to the fund from which they will be paid. The
difference between governmental fund assets and liabilities is reported as fund balance.
As prescribed by GASB Statement No. 34, governmental fund reporting focuses on the major funds, rather
than on the fund type. There is a two-step process for determining if a fund should be reported as a major
fund: (1) total assets, liabilities, revenues, or expenditures/expenses (excluding extraordinary items) of an
individual fund are at least 10% of the corresponding total for the fund type, and (2) total assets, liabilities,
revenues, or expenditures/expenses (excluding extraordinary items) of an individual fund are at least 5% of
the corresponding total for the total of all governmental and proprietary funds combined. Funds that do not
meet the major fund determination requirements are reported in aggregate as non-major funds. The
Regional Office of Education #39 has presented all major funds that met the above qualifications.
The Regional Office ofEducation #39 reports the following major governmental funds:
General Fund - The General Fund is the operating fund of the Regional Office of Education #39. It is
used to account for all financial resources in the Region except those required to be accounted for in
other funds. General Funds include the following:
General - This fund accounts for interest earned on Distributive Fund monies.
Business Office - This fund accounts for various business office expenditures, such as insurance,
utilities, rent, and business personnel, and reimbursements from Macon and Piatt counties to
help cover these costs. It also accounts for pop machine revenues and expenditures as well
as interest on the pooled cash account.
Film Library - This program accounts for revenues and expenditures of the Macon County
Cooperative Film Library. The Macon County Cooperative Film Library was formed by an
intergovernmental agreement among nine member school districts. The Film Library is
governed by a board of control consisting of the Superintendent of each member district.
The purpose of the Film Library is to provide educational films, video tapes, and computer
disks to the member districts in return for an assessment based on district enrollment.
28
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS (Continued)
General Fund (Continued)
Water Street Pop Fund - This program accounts for revenue and expenses from the pop machine
at the Water Street facility.
Adult Education - The program accounts for General State Aid proceeds used for adult
education. Funding is also provided by the Macon County Health Board.
Junior Achievement - This program accounts for sales of candy, etc.
ADA State Aid - This program accounts for General State Aid for the Futures Unlimited School.
Futures Pop Fund - This program accounts for revenue and expenses from the Futures Unlimited
pop machine.
St. Mary's Hospital School - This program accounts for charges to local school districts for
educational services provided to students being treated by St. Mary's Adolescent Mental
Health Services.
Student Council- This program accounts for the sales of candy, bake sales, etc. for class trips.
Recycling and Energy - This program accounts for proceeds from Caterpillar, Inc., for recycling
and energy education curriculum for all students (K-12) in Macon and Piatt Counties.
Teachers' Exchange - This program accounts for revenue generated by fees from classes.
General State Aid and Lunch and Breakfast - This program accounts for General State Aid
received from the Illinois State Board of Education based on the average daily attendance at
the Regional Safe School and accounts for federal and State nutrition reimbursements.
Baby Talk - This program accounts for monies for outreach and family literacy programs, STEPS
Early Intervention, and resources for professionals, including professional training,
certification seminars, and an extensive program curriculum.
Department of Corrections - GED Contract - This program provides GED testing at Decatur,
Taylorville, Lincoln, Logan, Danville, and Pontiac correctional facilities.
29
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS (Continued)
General Fund (Concluded)
Futures Foundation - This program accounts for Futures Unlimited contributions from the
Community Foundation of DecaturlMacon County and various other donors.
School Improvement - This fund accounts for activities related to an agreement between the Regional
Office and Egyptian and DePue school districts. The Regional Office provides services to the
two school districts through the parameters set by the School Improvement Grant - Section
l003(g).
Major Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific
revenue sources (other than fiduciary or major capital projects) that are restricted to expenditures for
specified purposes. Major Special Revenue Funds include the following:
Education Fund - This fund is used to account for and report the proceeds of specific revenue sources
that are restricted by grant agreements or contracts to expenditures for specified purposes supporting
education enhancement programs as follows:
Adult Education Performance - This program accounts for the proceeds of a grant awarded by the
Illinois Community College Board under its Adult Education program.
Adult Education Public Assistance - This program accounts for the proceeds of a grant awarded by
the Illinois Community College Board under its Adult Education program.
Adult Education State Basic - This program accounts for the proceeds of a grant awarded by the
Illinois Community College Board mder its Adult Education program.
Adult Education Federal Basic - This fund accounts for the proceeds of a U.S. Department of
Education grant passed through the Illinois Community College Board. The purpose of this and
the other Adult Education programs is to improve educational opportunities for adults and to
encourage the establishment of adult education programs that will enable all adults to acquire
basic educational skills necessary for literate functioning. The programs are also to enable
adults who so desire to complete secondary school, enable adults to benefit from job training
and retaining programs, and enable adults to obtain productive employment to more fully enjoy
the benefits and responsibilities of citizenship.
Adult Education Transition Center - This program accounts for a grant between the Department of
Corrections and Regional Office of Education #39 to provide educational services at the Adult
Transition Center, a work release correctional facility.
30
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS (Continued)
Major Special Revenue Funds (Continued)
Education Funds (Continued)
Workforce Investment Solutions (WIS) - Year Round Youth Program I - This program accounts
for an adult/teen GED program that allows youth ages 16 - 21 access to intensive workforce
training, as well as opportunities for educational growth.
Truants Alternative/Optional Education - This program accounts for the proceeds of a grant from
the Illinois State Board of Education to provide educational opportunities for drop-outs and
truants.
Gifted Program - This program accounts for the proceeds from a grant from the Illinois State
Board of Education to be used toward the development of a diversity guide and training
program for teachers to identify and serve gifted students' needs in the classroom.
ROE/ISC Operations - These funds are provided by the Illinois State Board of Education,
through a budget application process, to the Regional Office to provide professional
development to district schools and teachers in Macon and Piatt county school districts.
Title II Teacher Quality - This program accounts for the proceeds of a grant from the Illinois
State Board of Education to improve teacher effectiveness in the classroom.
Regional Safe Schools - This program accounts for the proceeds of a grant from the Illinois State
Board of Education to remove violent and unproductive youths from a public school setting
and place them in a program where they can receive individualized attention.
Special Education for Department of Corrections - This program accounts for monies received
from the Illinois Department of Corrections, and federal and State grants passed through the
Illinois State Board of Education, to be used to implement special educational programs for
School District #428 of the Department of Corrections.
Early Childhood Block Grant - This program accounts for the proceeds of a grant awarded by the
Illinois State Board of Education for the systematic identification and recruitment of teen
moms and dads and the delivery of culturally appropriate education in order to engage them
in their child's learning.
31
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS (Continued)
Major Special Revenue Funds (Continued)
Education Funds (Continued)
Not on Tobacco - This program accounts for a grant awarded to Futures Unlimited for students
to learn the hazards of tobacco products.
Regional System of Support Provider CRESPRO) - This program accounts for resources for
schools identified by the Illinois State Board of Education as being in school improvement
status.
Secretary of State - This program accounts for a contract between Richland Community College
and Baby Talk for a Secretary of State Family Literacy Project that provides coordination
and parenting instruction for adults enrolled in the Family Literacy Program served at
Central Christian Church.
Early Childhood Block Grant II - This program accounts for the proceeds of a grant from the
Illinois State Board of Education to bring intensive services to families for whom the
mother is a high school student.
Early Childhood Block Grant - Continuing Three to Five - This program accounts for the
proceeds of a grant from the Illinois State Board of Education for early childhood and
family education programs and services that help young children enter school ready to
learn.
Preschool for All - This program accounts for a grant that provides consultants to determine
the compliance of preschools.
Homeless Children Youth Program - This program accounts for the proceeds of a grant from
the Illinois State Board of Education for identification, referral, and enrollment of
homeless and displaced youth in Macon County schools.
New Principals Mentoring - This program provides for the selection and training of
experienced principals to serve as mentors for new principals and for the new principals'
participation in the mentoring program designed for them. Funds flow though the
Illinois Principals Association for the Illinois State Board of Education.
32
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS (Concluded)
Major Special Revenue Funds (Concluded)
Education Funds (Concluded)
American Recovery and Reinvestment (ARRA) - Title I - School Improvement and
Accountability - This program accounts for monies received from the government to
support Title I school improvement services for schools in academic difficulty.
American Recovery and Reinvestment (ARRA) - Education Jobs - Accounts for the federal
funding provided to LEAs to save or create education jobs for school year 2010-2011.
The Regional Office of Education #39 reports the following non-major governmental funds:
Non-major Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of
specific revenue sources (other than fiduciary or major capital projects) that are restricted to
expenditures for specified purposes. Non-major special revenue funds include the following:
Institute Fund - This fund accounts for the proceeds earned from teacher registration,
certificate renewals, and examinations. The proceeds are used to pay administrative
expenses incurred on behalf of the teachers' institute, such as certificates, workshops,
and general meetings, to ensure compliance with 105 ILCS 5/3-12. All funds generated
remain restricted until expended only on the aforementioned activities.
General Education Development (GED) - This program accounts for monies received from
students who participate in the high school equivalency programs. These proceeds are
used to pay the administrative expenses incurred to administer the GED program.
Bus Permit - This program accounts for registration and user fees and a distribution from the
Illinois State Board of Education. These monies are used to pay the administrative
expenses incurred to ensure compliance with 105 ILCS 5/3-14.23 (school bus driver
permits).
Supervisory - This program accounts for proceeds provided to the Regional Superintendent
by the Illinois State Board of Education to be used for travel and related purposes.
33
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Concluded)
PROPRIETARY FUND
Proprietary Fund - The Proprietary Fund accounts for revenue and expenses related to services
provided to organizations inside the Regional Office of Education #39 on a cost-reimbursement basis.
The Regional Office of Education #39 reports the following proprietary fund:
Workshop Reimbursement - This program provides workshops for professional development
presented by Regional Office of Education employees.
FIDUCIARY FUNDS
Agency Funds - Agency Funds are used to account for assets held by the Regional Office of
Education #39 in a trustee capacity or as an agent for individuals, private organizations, other
governmental units, and/or other funds. These funds are custodial in nature (assets equal liabilities)
and do not involve measurement of results of operations. Agency Funds include the following:
Distributive Fund - This fund accounts for the assets held by the Regional Office of
Education #39 to be distributed to local school districts and other governmental units.
The Regional Office of Education #39 has agreements with all entities that receive
distributions from this fund to keep all accumulated interest.
Project Success Fund - This fund accounts for grants received from the Illinois Department of
Human Services and Illinois Violence Prevention that are passed directly to Project
Success, a nonprofit organization.
Heartland Region Fund - This fund accounts for the assets held for the benefit of Heartland
Region, an intergovernmental agreement between school districts that provides quality
and efficient delivery of orientation and skill level vocational programs accessible to all
residents in member districts.
Regional Board of Trustees - This program accounts for receipts and disbursements related to
school annexation, consolidations, and school grievances.
34
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1. GOVERNMENTAL FUND BALANCES
Fund balance is the difference between assets and liabilities in a governmental fund. The following types
of fund balances may be presented in the Governmental Funds Balance Sheet and Governmental Funds
Combining Schedule of Accounts:
Nonspendable Fund Balance - The portion of a Governmental Fund's net assets that are not available
to be spent, either short term or long term, due to either their form or legal restrictions. The
Regional Office of Education #39 has no nonspendable fund balances.
Restricted Fund Balance - The portion of a Governmental Fund's net assets that are subject to
external enforceable legal restrictions. The following account fund balance is restricted by grant
agreements or contracts: Not on Tobacco. The following funds are restricted by Illinois Statute:
Institute Fund, General Education Development Fund, and Bus Permit 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. The
Regional Office of Education #39 has no committed fund balances.
Assigned Fund Balance - The portion of a Governmental Fund's net assets for which an intended use
of resources has been denoted. The accounts presented with assigned fund balances are specified
for a particular purpose by the Regional Superintendent. The Regional Office of Education #39
has assigned fund balances in the Film Library, Junior Achievement, Futures Pop Fund, Student
Council, and Futures Foundation programs.
Unassigned Fund Balance - Available expendable financial resources in a governmental fund that
are not designated for a specific purpose. The Regional Office of Education #39 has unassigned
fund balances (deficits) in the General, Business Office, Water Street Pop Fund, Adult
Education, ADA State Aid, St. Mary's Hospital School, Teachers' Exchange, General State Aid
& Lunch & Breakfast, Department of Corrections-GED Contract, Adult Education Performance,
Adult Education Public Assistance, Adult Education State Basic, Adult Education Transition
Center, Truants Alternative/Optional Education, ROEIISC Operations, Early Childhood Block
Grant, Early Childhood Block Grant II, Early Childhood Block Grant-Continuing Three to Five,
and New Principals Mentoring.
35
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. NET ASSETS
Equity is classified as net assets and displayed in three components:
Invested in capital assets - Consists of capital assets, net of accumulated depreciation.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or
"invested in capital assets."
K. CASH AND CASH EQUIVALENTS
The Macon/Piatt Counties Regional Office of Education #39's cash and cash equivalents are considered
to be demand deposits and short-term investments. All interest income is recognized as revenue in the
appropriate fund's Statement of Revenues, Expenditures and Changes in Fund Balance.
L. INVENTORY
Inventory is not recorded. The cost is recorded as an expenditure at the time individual inventory items
are purchased.
M. ESTIMATES
The preparation of financial statements in conformity with Generally Accepted Accounting Principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
N. CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $500 or more and estimated useful lives of
greater than one year are reported at historical cost or estimated historical cost. Contributed assets are
reported at fair market value as of the date received.
Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are
capitalized. Other costs incurred for repairs and maintenance are expensed as incurred.
36
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
N. CAPITAL ASSETS (Concluded)
Depreciation on all assets is provided on the straight-line basis over the following estimated useful lives:
Assets
Leasehold improvements
Equipment
Years
3
4
In the fund financial statements, fixed assets used in governmental operations are accounted for as capital
outlay expenditures of the governmental fund upon acquisition.
O. COMPENSATED ABSENCES
After one year of employment, noncertified and certified employees who have a 261-day contract can earn
up to 20 vacation days per year, prorated based on the number of days worked. Employees with less than
full-year contracts do not earn vacation days. Unused vacation time carries forward to the next year with
director's approval, but the previous year's unused vacation time is forfeited if unused by the end of the next
year. Unused vacation time is paid on termination of employment. Accumulated vacation benefits are
accrued as incurred in the government-wide financial statements. Governmental funds record accumulated
vacation benefits payable only when due for payment, such as when an employee retires or resigns.
Employees who have at least a 182-day contract receive two personal days per year. Unused personal days
are allowed to accrue as sick leave. Employees earn up to 15 sick days per year, depending on the length of
their annual contract, and the unused portion accumulates indefinitely. Employee sick leave is recorded
when paid. Upon retirement, unused sick leave may be used as service credits toward the employee's
retirement fund. Upon termination, employees do not receive any accumulated sick leave pay, and therefore
no liability is accrued.
P. BUDGET INFORMATION
The Regional Office of Education #39 acts as the administrative agent for certain grant programs that are
accounted for in the General and Education Funds. Certain programs have separate budgets and are
required to report to the Illinois State Board of Education and the Illinois Community College Board;
however, none of the annual budgets have been legally adopted, nor are they required to be. Certain
programs within the General Fund and Special Revenue Funds do not have separate budgets.
Comparisons of budgeted and actual results are presented as supplemental information. Budgetary
comparison schedules have been provided in supplemental schedules for the following funds: Adult
Education Performance, Adult Education Public Assistance, Adult Education State Basic, Adult
Education Federal Basic, WIS-Year Round Youth Program I, Truants Alternative/Optional Education
37
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)
P. BUDGET INFORMATION (Concluded)
Program, Gifted Program, ROE/ISC Operations, Title II Teacher Quality, Regional Safe Schools, Early
Childhood Block Grant, Regional System of Support Provider (RESPRO), Early Childhood Block
Grant II, Early Childhood Block Grant-Continuing Three to Five, Homeless Children Youth Program,
New Principals Mentoring, and ARRA-Title I-School Improvement and Accountability.
NOTE2-CASH
The Regional Office of Education #39 does not have a formal investment policy. The Regional Office
of Education #39 is allowed to invest in securities as authorized by 30 ILCS 235/2 and 6 and 105 ILCS
5/8-7.
A. DEPOSITS
At June 30, 2011, the carrying amount of the Regional Office of Education #39's government-wide
and Agency Fund deposits were $1,697,704 and $1,341, respectively, and the bank balances were
$1,779,872 and $1,341, respectively. Of the total bank balances as of June 30, 2011, $261,879 was
secured by federal depository insurance. For the period from December 31, 2010 through December
31, 2012, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)
provides separate and unlimited deposit insurance coverage for accounts that meet the definition of a
'noninterest-bearing account.' This unlimited coverage for such accounts is separate from the
$250,000 coverage provided for other types of accounts. At June 30, 2011, the Regional Office had
bank deposits of$1,503,763 in excess ofthe $250,000 FDIC coverage which were covered under the
Dodd-Frank Act.
CUSTODIAL CREDIT RISK
Custodial credit risk for deposits with financial institutions is the risk that, in the event of bank
failure, the ROE's deposits may not be returned to it. To guard against custodial credit risk for
deposits with financial institutions, the Regional Office of Education #39's investment policy
requires that deposits with financial institutions in excess of FDIC limits be secured by some form of
collateral, by a written agreement, and held at an independent, third-party institution in the name of
the Regional Office of Education #39.
38
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 2 - CASH (Concluded)
B. INVESTMENTS
The Regional Office of Education #39's only investments are internally pooled in the Illinois Funds
Money Market Fund. As of June 30, 2011, the Regional Office of Education #39 had investments
with carrying and fair values of$10,261 invested in the Illinois Funds Money Market Fund, which is
reported as cash and cash equivalents in the financial statements.
CREDIT RISK
At June 30, 2011, the Illinois Funds Money Market Fund had a Standard and Poor's AAAm rating.
The pool is audited annually by an outside independent auditor and copies of the report are
distributed to participants. Although not subject to direct regulatory oversight, the fund is
administered by the Illinois State Treasurer in accordance with the provision of the Illinois Public
Funds Investment Act, 30 ILCS 235. All investments are fully collateralized.
CONCENTRATION OF CREDIT RISK
Unless specifically authorized by the Treasurer, the Illinois Funds Money Market Fund's investment
policy limits investment categories to not exceed 25% of the portfolio with the exception of cash
equivalents and U.S. Treasury securities. Further certificates of deposit cannot exceed 10% of any
single financial institution's total deposits.
INTEREST RATE RISK
The Illinois Funds Money Market Fund, created by the Illinois General Assembly, enables custodians
of public funds an investment option with a competitive rate of return on fully collateralized
investments and immediate access to the funds. The investment policy of the Illinois Funds Money
Market Funds states that, unless authorized specifically by the Treasurer, a minimum of 75% of its
investments shall have less than one-year maturity and no investment shall exceed two years
maturity.
39
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 3 - DEFINED BENEFIT PENSION PLAN
Plan Description. The Regional Office of Education #39'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 Regional Office of Education #39's plan is affiliated with the
Illinois Municipal Retirement Fund (IMRF), an agent multiple-employer plan. Benefit provisions are
established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF
issues a publicly available financial report that includes financial statements and required supplementary
information. That report may be obtained on line at www.imrf.org.
Funding Policy. As set by statute, the Regional Office of Education #39's Regular plan members are
required to contribute 4.50 percent of their annual covered salary. The statute requires employers to
contribute the amount necessary, in addition to member contributions, to finance the retirement coverage
of its own employees. The employer contribution rate for calendar year 2010 was 7.95 percent of annual
covered payroll. The Regional Office of Education #39 also contributes for disability benefits, death
benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution
rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental
retirement benefits rate is set by statute.
Annual Pension Cost. The required contribution for calendar year 2010 was $54,052.
THREE YEAR TREND INFORMATION FOR THE REGULAR PLAN
Actuarial
Valuation
Date
12/31/10
12/31/09
12/31/08
Annual
Pension
Cost (APC)
$ 54,052
86,485
135,605
Percentage
ofAPC
Contributed
100%
100%
100%
Net
Pension
Obligation
$
The required contribution for 2010 was determined as part of the December 31, 2008, actuarial valuation
using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2008,
included a) 7.5 percent investment rate of return (net of administrative and direct investment expenses),
b) projected salary increases of 4.00% a year, attributable to inflation, c) additional projected salary
increases ranging from 0.4% to 10% per year depending on age and service, attributable to
seniority/merit, and d) post retirement benefit increases of 3% annually. The actuarial value of the
Regional Office of Education #39's Regular plan assets was determined using techniques that spread the
effects of short-term volatility in the market value of investments over a five-year period with a 20%
corridor between the actuarial and market value of assets. The Regional Office of Education #39's
Regular plan's unfunded actuarial accrued liability at December 31, 2008 is being amortized as a level
percentage of projected payroll on an open 10 year basis.
40
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 3 - DEFINED BENEFIT PENSION PLAN (Concluded)
Funded Status and Funding Progress. As of December 31, 2010, the most recent actuarial valuation
date, the Regular plan was 89.87 percent funded. The actuarial accrued liability for benefits was
$1,997,317 and the actuarial value of assets was $1,794,952, resulting in an underfunded actuarial
accrued liability (VAAL) of $202,365. The covered payroll for calendar year 2010 (annual payroll of
active employees covered by the plan) was $679,898 and the ratio of the VAAL to the covered payroll
was 30 percent.
The schedule of funding progress, presented as RSI following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
The Regional Office of Education #39 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 funding of the plan, but contributions from participating employers and members are also
required. The TRS Board of Trustees is responsible for the system's administration.
TRS members include all active non-annuitants who are employed by a TRS-covered employer to provide
services for which teacher certification is required. The active member contribution rate for the year ended
June 30, 2011, was 9.4 percent of creditable earnings. The same contribution rate applies to members whose
first contributing service is on or after January 1, 2011, the effective date of the benefit changes contained in
Public Act 96-0889. These contributions, which may be paid on behalf of employees by the employer, are
submitted to TRS by the employer. The active member contribution rate was also 9.4 percent for the years
ended June 30,2010 and 2009.
The State of Illinois makes contributions directly to TRS on behalf of the Regional Office of Education
#39's TRS-covered employees.
On-behalf contributions. The State of Illinois makes employer pension contributions on behalf of the
Regional Office of Education #39. For the year ended June 30, 2011, the State of Illinois contributions were
based on 23.10 percent of creditable earnings not paid from federal funds, and the Regional Office of
Education #39 recognized revenue and expenditures of $329,432 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
($357,235) and 17.08 percent ($489,364), respectively.
The Regional Office of Education #39 makes other types of employer contributions directly to TRS.
41
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Continued)
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
$9,889. Contributions for the years ending June 30, 2010, and June 30, 2009, were $8,154 and $19,480,
respectively.
Federal and special trust fund contributions. When TRS members are paid from federal and special trust
funds administered by the Regional Office of Education #39, there is a statutory requirement for the
Regional Office of Education #39 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
contribution was 23.38 and 17.08 percent of salaries paid from federal and special trust funds,
respectively. For the year ended June 30, 2011, salaries totaling $470,564 were paid from federal and
special trust funds that required employer contributions of $108,700. For the years ended June 30, 2010
and 2009, required Regional Office of Education #39 contributions were $14,496 and $84,170,
respectively.
Early retirement option. The Regional Office of Education #39 is also required to make one-time
employer contributions to TRS for members retiring under the Early Retirement Option (ERO). The
payments vary depending on the age and salary ofthe member.
The maximum employer ERO contribution is 117.5 percent and applies when the member is age 55 at
retirement.
For the years ended June 30, 2011, 2010, and 2009, the Regional Office of Education #39 paid no
contributions to TRS for employer contributions under the ERO program.
Salary increases over 6 percent and excess sick leave. If the Regional Office of Education #39 grants
salary increases over 6 percent and those salaries are used to calculate a retiree's final average salary, the
Regional Office of Education #39 makes a contribution to TRS. The contribution will cover the
difference in actuarial cost of the benefit based on actual salary increases and the benefit based on salary
increase of up to 6 percent.
For the year ended June 30, 2011, the Regional Office of Education #39 paid no employer contributions
to TRS for employer contributions due on salary increases in excess of 6 percent. For the years ended
June 30, 2010 and 2009, the Regional Office of Education #39 paid no employer contributions due on
salary increases in excess of 6 percent.
42
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Concluded)
If the Regional Office of Education #39 grants sick leave days in excess of the normal annual allotment
and those days are used as TRS service credit, the Regional Office of Education #39 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 Regional Office of Education #39 paid no employer contributions
to TRS for sick leave days granted in the excess of the normal annual allotment. For the years ended
June 30, 2010 and 2009, the Regional Office of Education #39 paid no employer contributions granted
for sick leave days.
Further information of TRS. TRS financial information, an explanation of TRS benefits, and
descriptions of member, employer and State funding requirements can be found in the TRS
Comprehensive Annual Financial Report for the year ended June 30, 2010. The report for the year
ended June 30, 2011, is expected to be available in late 2011.
The reports may be obtained by writing to the Teachers' Retirement System ofthe State of Illinois, 2815
West Washington Street, P.O. Box 19253, Springfield, Illinois 62794-9253. The most current report is
also available on the TRS Web site at http://trs.illinois.gov.
NOTE 5 - TEACHERS' HEALTH INSURANCE SYSTEM
The Regional Office of Education #39 participates in the Teacher Health Insurance Security (THIS)
Fund, a cost-sharing, multiple-employer defined benefit postemployment healthcare plan that was
established by the Illinois legislature for the benefit of Illinois public school teachers employed outside
the city of Chicago. The THIS Fund provides medical, prescription, and behavioral health benefits, but
does not provide vision, dental, or life insurance benefits to annuitants of the Teachers' Retirement
System (TRS). Annuitants may participate in the State administered participating provider option plan or
choose from several managed care options.
The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines the benefit provisions of THIS
Fund and amendments to the plan can be made only by legislative action with the Governor's approval.
The Illinois Department of Healthcare and Family Services (HFS) and the Illinois Department of Central
Management Services (CMS) administer the plan with the cooperation of TRS. The director of HFS
determines the rates and premiums for annuitants and dependent beneficiaries and establishes the cost­sharing
parameters. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active
contributors to the TRS who are not employees ofthe State make a contribution to THIS Fund.
43
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 5 - TEACHERS' HEALTH INSURANCE SYSTEM (Concluded)
The percentage of employer required contributions in the future will be determined by the director of
Healthcare and Family Services and will not exceed 105 percent of the percentage of salary actually
required to be paid in the previous fiscal year.
On behalf contributions to THIS Fund. The State of Illinois makes employer retiree health insurance
contributions on behalf of the Regional Office. 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, 201l.
State of Illinois contributions were $15,006, and the Regional Office of Education #39 recognized
revenue and expenditures ofthis 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. State contributions on behalf of the Regional Office of Education #39
employees were $11,811.
Had the Regional Office of Education #39 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 $21,156.
Employer contributions to THIS Fund. The employer (Regional Office of Education #39) also makes
contributions to THIS Fund. The employer THIS Fund contribution was 0.66 percent during the year
ended June 30, 2011, and 0.63 percent during the years ended June 30, 2010, and June 30, 2009. For the
year ended June 30, 2011, the Regional Office of Education #39 paid $11,254, to the THIS Fund. For
the year ended June 30, 2010, the Regional Office of Education #39 paid $8,858 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.
NOTE 6 - RISK MANAGEMENT
The Regional Office of Education #39 is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The Regional Office of Education #39 has purchased commercial insurance to cover these risks. No
losses have been incurred in excess ofthe amounts covered by insurance over the past three years.
44
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 7 - ON BEHALF PAYMENTS
The State of Illinois paid the following salaries on behalf ofthe Regional Office of Education #39:
Regional Superintendent Salary
Assistant Regional Superintendent Salary
Regional Superintendent Benefits
(Includes State paid insurance)
Assistant Regional Superintendent Benefits
(Includes State paid insurance)
TRS Pension Contribution
Teachers' Health Insurance System (THIS) Contribution
Total
$ 100,762
90,686
21,892
24,316
329,432
15,006
$ 582.094
Salary and benefit data for the Regional Superintendent and Assistant Regional Superintendent were
calculated based on data provided by the Illinois State Board of Education.
These amounts have been recorded in the accompanying financial statements as state revenue and
expenditures.
NOTE 8 - COMPENSATED ABSENCES
Due to the nature of the obligation for compensated absences, annual requirements to amortize such
obligations are not determinable and have not been presented. Compensated absences are liquidated through
the fund that provides the particular employee's salary.
Balance at July 1,2010
Net change in liability
Balance at June 30, 2011
NOTE 9 - CAPITAL ASSETS
$ 7,681
(4,216)
$ 3,465
In accordance with GASB Statement No. 34, the Regional Office of Education #39 has reported capital
assets in the government-wide Statement of Net Assets. Purchases are reported as capital outlay in the
governmental fund statements. Purchases of business-type activities are capitalized when purchased.
The following table provides a summary of changes in total capital assets, accumulated depreciation, and
investment in capital assets for the year ended June 30, 2011:
45
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 9 - CAPITAL ASSETS (Concluded)
Balance Balance
7/1/2010 Additions Disposals 6/30/2011
Governmental Activities
General Fund
Leasehold improvements $ 45,000 $ $ $ 45,000
Equipment and furniture 131,910 131,910
Education Fund
Equipment and furniture 273,342 15,667 289,009
Governmental Activities
Total Capital Assets 450,252 15,667 465,919
Less: Accumulated Depreciation (345,786) (37,930) (383,716)
Governmental Activities
Investment in Capital Assets, Net $ 104,466 $ (22,263) $ $ 82,203
Business-Type Activities
Enterprise Fund
Equipment and furniture $ 5,555 $ $ $ 5,555
Business-Type Activities
Total Capital Assets 5,555 5,555
Less: Accumulated Depreciation (3,288) (1,266) (4,554)
Business-Type Activities
Investment in Capital Assets, Net $ 2,267 $ (1,266) $ $ 1,001
Capital assets are depreciated using the straight-line method over the estimated useful lives of the assets.
Depreciation expense for the year ended June 30, 2011 of $37,930 and $1,266 were charged to the
governmental activities and business type activities, respectively, on the government-wide Statement of
Activities. Investment in capital assets is the component of net assets that reports capital assets net of
accumulated depreciation.
46
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 10 - INTERFUND ACTIVITY
DUE TOIFROM OTHER FUNDS
Inter-fund due to/from other fund balances at June 30, 2011 consist of the following individual due to/from
other funds in the governmental fund's Balance Sheet. The balances between governmental funds were
eliminated in the government-wide Statement ofNet Assets.
General Fund
Education Fund
Total
TRANSFERS
Due From
Other Funds
$ 1,017,279
$ 1,017,279
Due To
Other Funds
$ 202,383
814,896
$ 1,017,279
Interfund transfers in/out to other fund balances at June 30, 2011 consist of the following individual
transfers in/out to other funds in the governmental fund Statement of Revenues, Expenditures, and
Changes in Fund Balances. The transfer balances between governmental funds were eliminated in the
government-wide Statement of Activities.
Fund Transfer In Transfer Out
General Fund $ 231,373 $ 229,545
Education Fund 1,828
Total $ 231,373 $ 231,373
NOTE 11 - OPERATING LEASE
The Regional Office of Education #39 is committed through July 31, 2014 under a lease agreement for
the ground and second floor of a building located at 250 East William Street, Decatur, Illinois. This lease
calls for monthly rental payments of $7,073 through July 31, 2011. For the period August 1, 2011
through July 31, 2014 the monthly rental payments increase to $7,573. The lease also calls for the
Regional Office to pay all utilities and liability insurance.
47
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 11 - OPERATING LEASE (Concluded)
The Regional Office of Education #39 is committed through March 31, 2014 under a lease agreement for
the first floor of the building located at 432 North Water Street, Decatur, Illinois. This lease calls for
monthly rent payments of $3,975. The lease also calls for the Regional Office to pay all utilities and
liability insurance.
The Regional Office of Education #39 is committed through June 30, 2013 under a lease agreement for
the building located at 1690 Huston Drive, Decatur, Illinois. The lease calls for monthly rental payments
of$3,750.
The counties served by the Regional Office of Education #39 are required by statute to provide the
Regional Superintendents of Schools with office space. Therefore, Macon and Piatt Counties share a
portion of the facility costs associated with the office space and reimburse the Regional Office of
Education #39 for the rent, building maintenance and utilities expense incurred as a result of the lease
for this office space.
Future minimum payments are as follows for the years ending June 30:
2012
2013
2014
2015
2016
Thereafter
Total
NOTE 12 - SUBSEQUENT EVENTS
$ 183,072
183,572
126,647
7,573
$ 500,864
For fiscal year 2012, the Governor of Illinois vetoed the appropriation line for the Regional
Superintendent's and Assistant Regional Superintendent's salaries and benefits, as well as, the
appropriation line for the Regional Office's general operations grant. The Regional Superintendent's
and Assistant Regional Superintendent's salaries were reinstated in November 2011 for one year only, to
be paid from State personal property replacement tax funds, but the general operations grant was not
reinstated. The Regional Superintendents will make every effort to secure other local funding to support
the programs and services the Regional Office provides. The affect of these funding cuts on the
Regional Office's long-term ability to continue to provide services at their current level is unknown.
48
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 13 - DUE TOIFROM OTHER GOVERNMENTS
85,534
764,868
4,103
25,425
7,932
536,215
3.063.364
1,639,287
$
$
The Regional Office of Education #39's Agency Fund, General Fund, and Education Funds have funds due
from/to various other governmental units which consist of the following:
Due from Other Governments:
General Fund
Local Governments
Education Fund
Illinois Community College Board
Illinois State Board of Education
Workforce Investment Solutions
Iroquois/Kankakee ROE
Richland Community College
Agency Funds
Local Governments
Total
Due to Other Governments:
Agency Funds
Local Governments $ 1.640.628
NOTE 14 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Generally accepted accounting principles require disclosure of certain information concerning individual
funds (which are presented only in combination on the financial statements). Funds having deficit fund
balances/net assets and funds which overexpend appropriations during the year are required to be disclosed.
Because some revenues from the State of Illinois will not be collected for several months after the Regional
Office's fiscal year ends, they are not considered "available" revenues and are deferred in the governmental
funds. The deferral of the revenues caused deficit fund balances as of June 30, 2011 in the following funds:
Adult Education Performance
Adult Education Public Assistance
Adult Education State Basic
Adult Education Transition Center
Truants Alternative Optional Education
ROEIISC Operations
Early Childhood Block Grant
Early Childhood Block Grant II
Early Childhood Block Grant - Continuing
Three to Five
New Principals Mentoring
$ 35,128
24,100
12,123
5,007
19,569
3,001
91,429
9,146
5,006
4,084
49
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 15 - RECLASSIFICATION
As a result of implementing GASB Statement No. 54, Fund Balance Reporting and Governmental Fund
Type Definitions, at July 1, 2010, the GSA and Lunch and Breakfast, Adult Education, and ADA State Aid
programs have been reclassified from the Education Fund to the General Fund due to the fact that GSA
money (which makes up the fund balances in these programs) does not meet the committed or restricted
criteria set forth in GASB 54 for special revenue funds.
The following non-major special revenue funds have also been reclassified to the General Fund due to
implementing GASB 54. These funds do not meet the committed or restricted criteria. They are: Film
Library, Water Street Pop Fund, Junior Achievement, Futures Pop Fund, Student Council, S1. Mary's
Hospital School, Teachers Exchange, Futures Foundation, and Department of Corrections - GED Contract
funds.
The ROEIISC Operations grant, which supports the general operations of the Regional Office, has
historically been reported the General Fund. However, because this funding is governed by a grant
agreement with the grantor, the funding is restricted and is required to be reported as a special revenue fund.
Below are the effects of these reclassifications:
General Fund:
Fund Balance - July 1, 2010
Effect of reclassifying ROE/ISC Operations
Effects of reclassifying Adult Education
Effects of reclassifying ADA State Aid
Effects of reclassifying GSA and Lunch and Breakfast
Effects of reclassifying Water Street Pop Fund
Effects of reclassifying Film Library
Effects of reclassifying Junior Achievement
Effects of reclassifying Futures Pop Fund
Effects of reclassifying Student Council
Effects of reclassifying S1. Mary's Hospital School
Effects of reclassifying Teachers Exchange
Effects of reclassifying Futures Foundation
Effects of reclassifying Department of Corrections ­GED
Contract
Fund Balance, Restated - July 1, 2010
50
$ 921,233
24,228
209,943
966,499
239,074
377
4,568
3,483
512
119
109,375
3,420
25,454
70
$ 2,508,355
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 15 - RECLASSIFICATION (Continued)
Education Fund:
Fund Balance - July 1, 2010
Effect of reclassifying ROE/ISC Operations
Effects of reclassifying Adult Education
Effects of reclassifying ADA State Aid
Effects of reclassifying GSA and Lunch and Breakfast
Fund Balance, Restated - July 1, 2010
Nonmajor Special Revenue Funds:
Fund Balance - July 1, 2010
Effects of reclassifying Water Street Pop Fund
Effects of reclassifying Film Library
Effects of reclassifying Junior Achievement
Effects of reclassifying Futures Pop Fund
Effects of reclassifying Student Council
Effects of reclassifying St. Mary's Hospital School
Effects of reclassifying Teachers Exchange
Effects of reclassifying Futures Foundation
Effects of reclassifying Department of Corrections ­GED
Contract
Effects of reclassifying Regional Board of Trustees
Fund Balance, Restated - July 1, 2010
$
$
$
$
980,349
(24,228)
(209,943)
(966,499)
(239,074)
(459,395)
264,386
(377)
(4,568)
(3,483)
(512)
(119)
(109,375)
(3,420)
(25,454)
(70)
(590)
116,418
In prior years, the Regional Board of Trustees fund was reported as a non-major special revenue fund. The
Regional Office of Education #39 acts as the fiscal agent for this fund; therefore, this fund has been
reclassified as an agency fund for the current year.
Below are the effects of the reclassification of the Regional Board of Trustees on the beginning fund balance
for the Governmental Funds and the beginning balance ofNet Assets for Governmental Activities:
Governmental Funds:
Fund Balance - July 1, 2010
Effects of reclassifying Regional Board of Trustees
Fund Balance, Restated - July 1, 2010
51
$ 2,165,968
(590)
$ 2,165,378
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 15 - RECLASSIFICATION (Concluded)
Governmental Activities:
Net Assets - July 1,2010
Effects of reclassifying Regional Board of Trustees
Net Assets, Restated - July 1,2010
$ 2,755,248
(590)
$ 2,754,658
NOTE 16 - OTHER POST EMPLOYMENT BENEFITS - HEALTH INSURANCE
The Governmental Accounting Standards Board (GASB) issued Statement No. 43 & 45 that established
generally accepted accounting principles for the annual financial statement for postemployment benefit plans
other than pension plans. The Regional Office of Education #39 did not recognize an Other Post­Employment
Benefits (OPEB) liability at June 30,2011. The required information is a follows:
Membership in the plan consisted of the following as of:
Retirees and beneficiaries
receiving benefits
Terminated plan members entitled
to but not yet receiving benefits
Active vested plan members
Active nonvested plan members
Total
Number ofparticipating employers
SCHEDULE OF FUNDING PROGRESS
June 30, 2011
o
o
14
15
29
1
UAAL asa
Actuarial Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets -Entry Age (UAAL) Ratio Payroll Payroll
Date W ® (b-a) (alb) i£} ((b-a)/c)
6/30/2009
6/30/2010
6/30/2011 $ 0 $ 30,260 $ 30,260 0.00%
52
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 16 - OTHER POST EMPLOYMENT BENEFITS - HEALTH INSURANCE (Continued)
ANNUAL OPEB COST AND NET OPEB OBLIGATION
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost
Contributions made
Increase (decrease) in net OPEB obligation
Net OPEB obligation beginning of year
Net OPEB obligation end of year
THREE-YEAR TREND INFORMATION
June 30, 2011
$ 3,846
3,846
3,846
$ 3,846
Fiscal
Year
Ending
6/30/2009
6/30/2010
6/30/2011
Annual
OPEB Cost
$ 3,846
Percentage of
AnnualOPEB
Cost Contributed
0.00%
Net
OPEB
Obligation
$ 3,846
ANNUAL REQUIRED CONTRIBUTION
June 30, 2012 June 30,2011
Service cost $ 2,618 $ 2,728
Amortization 1,009 935
Interest 181 183
Annual required contribution $ 3,808 $ 3,846
53
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 16 - OTHER POST EMPLOYMENT BENEFITS - HEALTH INSURANCE (Continued)
FUNDING POLICY AND ACTUARIAL ASSUMPTIONS
Contribution rates:
Employer
Plan members
Actuarial valuation date
Actuarial cost method
Amortization period
Remaining amortization period
Asset valuation method
Actuarial assumptions:
Investment rate of return*
Projected salary increases
Healthcare inflation rate
Mortality, Turnover, Disability,
Retirement ages
Active utilization rate:
Employer provided benefit
* Includes inflation at
0.00%
6/30/2011
Entry age
Level percentage of pay, open
30 years
Market
5.00%
5.00%
8.00% intial,
6.00% ultimate
Same rates utilized for IMRF
20%
Explicit: None
Implicit: 40% of premium to age 65
(50% of$486/mo + 50% of$I,091/mo)
3.00%
54
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 16 - OTHER POST EMPLOYMENT BENEFITS - HEALTH INSURANCE (Concluded)
GASB 45 Summary as of June 30, 2011
Annual
Service Active Retired Total Required Expected
Division Cost Liability Liability Liability Contribution Payments Actives Retirees Total
All 2,618 30,260 0 30,260 3,808 0 29 0 29
Discount Rate: 5.0%
Medical Inflation Rate: 8.0% intial, 6.0% ultimate
Future Payroll Increases: 5.0%
55
REQUIRED SUPPLEMENTAL INFORMATION
(Other than Management's Discussion and Analysis)
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF FUNDING PROGRESS
(UNAUDITED)
JUNE 30, 2011
(2) (3) (4)
Actuarial Actuarial Accrued Unfunded UAAL as a
Actuarial Value of Liability (AAL) AAL Funded Covered Percentage of
Valuation Assets Entry Age (UAAL) Ratio Payroll Covered Payroll
Date (a) (b) (b-a) (alb) (c) ( (b-a)/c )
12/31/10 $ 1,794,952 $ 1,997,317 $ 202,365 89.87% $ 679,898 29.76%
12/31/09 2,037,136 2,102,898 65,762 96.87% 854,598 7.70%
12/31/08 2,233,072 2,205,111 (27,961) 101.27% 1,072,826 0.00%
On a market value basis, the actuarial value of assets as of December 31,2010 is $1,990,530.
On a market basis, the funded ratio would be 99.66%.
56
OTHER SUPPLEMENTAL INFORMATION
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
GENERAL FUNDS
JUNE 30, 2011
Business Film Water Street
General Office Library Pop Fund
ASSETS
Cash and cash equivalents $ 22,192 $ 671,727 $ 4,524 $ 316
Due from other funds
Due from other governments - Local - 253,898
Accounts receivable -
TOTAL ASSETS $ 22,192 $ 925,625 $ 4,524 $ 316
LIABILITIES
Accounts payable $ - $ 1,823 $ 41 $
Due to other funds
Deferred revenue
Total Liabilities - 1,823 41
FUND BALANCE
Assigned - - 4,483
Unassigned 22,192 923,802 - 316
Total Fund Balance 22,192 923,802 4,483 316
TOTAL LIABILITIES AND
FUND BALANCE $ 22,192 $ 925,625 $ 4,524 $ 316
57
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
GENERAL FUNDS
JUNE 30, 2011
Adult Junior Futures
Education Achievement ADA State Aid Pop Fund
ASSETS
Cash and cash equivalents $ 282,133 $ 3,483 $ 142,802 $ 712
Due from other funds - - 1,017,279
Due from other governments - Local - - 403
Accounts receivable -
TOTAL ASSETS $ 282,133 $ 3,483 $ 1,160,484 $ 712
LIABILITIES
Accounts payable $ 1,789 $ - $ 26,107 $
Due to other funds
Deferred revenue
Total Liabilities 1,789 - 26,107
FUND BALANCE
Assigned - 3,483 - 712
Unassigned 280,344 - 1,134,377
Total Fund Balance 280,344 3,483 1,134,377 712
TOTAL LIABILITIES AND
FUND BALANCE $ 282,133 $ 3,483 $ 1,160,484 $ 712
58
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
GENERAL FUNDS
JUNE 30,2011
St. Mary's
Hospital Student Recycling and Teachers'
School Council Energy Exchange
ASSETS
Cash and cash equivalents $ 73,580 $ 119 $ 1,451 $ 139,956
Due from other funds
Due from other governments - Local 50,056 - - 18,395
Accounts receivable -
TOTAL ASSETS $ 123,636 $ 119 $ 1,451 $ 158,351
LIABILITIES
Accounts payable $ 412 $ - $ - $ 154,930
Due to other funds
Deferred revenue - - 1,451
Total Liabilities 412 - 1,451 154,930
FUND BALANCE
Assigned - 119
Unassigned 123,224 - - 3,421
Total Fund Balance 123,224 119 - 3,421
TOTAL LIABILITIES AND
FUND BALANCE $ 123,636 $ 119 $ 1,451 $ 158,351
59
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
GENERAL FUNDS
JUNE 30,2011
General
State Aid & Department of
Lunch & Corrections - Futures
Breakfast Baby Talk GED Contract Foundation
ASSETS
Cash and cash equivalents $ 249,556 $ - $ - $ 1,075
Due from other funds
Due from other governments - Local 5,764
Accounts receivable 57 11,036 4,449 28,216
TOTAL ASSETS $ 255,377 $ 11,036 $ 4,449 $ 29,291
LIABILITIES
Accounts payable $ 1,864 $ 1,401 $ - $
Due to other funds - 9,635 4,379
Deferred revenue
Total Liabilities 1,864 11,036 4,379
FUND BALANCE
Assigned - - - 29,291
Unassigned 253,513 - 70
Total Fund Balance 253,513 - 70 29,291
TOTAL LIABILITIES AND
FUND BALANCE $ 255,377 $ 11,036 $ 4,449 $ 29,291
60
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
GENERAL FUNDS
JUNE 30, 2011
School
Improvement TOTALS
ASSETS
Cash and cash equivalents $ - $ 1,593,626
Due from other funds - 1,017,279
Due from other governments - Local 207,699 536,215
Accounts receivable - 43,758
TOTAL ASSETS $ 207,699 $ 3,190,878
LIABILITIES
Accounts payable $ 19,330 $ 207,697
Due to other funds 188,369 202,383
Deferred revenue - 1,451
Total Liabilities 207,699 411,531
FUND BALANCE
Assigned - 38,088
Unassigned - 2,741,259
Total Fund Balance - 2,779,347
TOTAL LIABILITIES AND
FUND BALANCE $ 207,699 $ 3,190,878
61
MACONfPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERAL FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30,2011
Business Film Water Street
General Office Library Pop Fund
REVENUES
Local sources $ - $ 219,554 $ 34,601 $ 268
State sources
On-behalf payments - State 582,094
Federal sources
Total Revenues 582,094 219,554 34,601 268
EXPENDITURES
Salaries and benefits - 145,801 28,550
Purchased services - 68,530 3,999 329
Supplies and materials - 6,840 2,140
Other objects - 719
On-behalf payments - State 582,094
Total Expenditures 582,094 221,890 34,689 329
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES - (2,336) (88) (61)
OTHER FINANCING SOURCES (USES)
Transfer in - 1,764
Transfer out
Interest 31 1,074 3
Total Other Financing Sources (Uses) 31 2,838 3
NET CHANGE IN FUND BALANCE 31 502 (85) (61)
FUND BALANCE - BEGINNING, RESTATED 22,161 923,300 4,568 - 377
FUND BALANCE - ENDING $ 22,192 $ 923,802 $ 4,483 $ 316
62
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERAL FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2011
Adult Junior Futures
Education Achievement ADA State Aid Pop Fund
REVENUES
Local sources $ - $ - $ 7,779 $ 6,076
State sources - - 871,419
On-behalfpayments - State
Federal sources
Total Revenues - - 879,198 6,076
EXPENDITURES
Salaries and benefits 109,330 - 288,409
Purchased services 34,744 - 181,686
Supplies and materials 4,415 - 11,680 5,876
Other objects
On-behalf payments - State
Total Expenditures 148,489 - 481,775 5,876
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (148,489) - 397,423 200
OTHER FINANCING SOURCES (USES)
Transfer in 218,890
Transfer out - - (229,545)
Interest
Total Other Financing Sources (Uses) 218,890 - (229,545)
NET CHANGE IN FUND BALANCE 70,401 - 167,878 200
FUND BALANCE - BEGINNING, RESTATED 209,943 3,483 966,499 512
FUND BALANCE - ENDING $ 280,344 $ 3,483 $ 1,134,377 $ 712
63
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERAL FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2011
St. Mary's
Hospital Student Recycling and Teachers'
School Council Energy Exchange
REVENUES
Local sources $ 99,392 $ - $ 10,582 $ 339,708
State sources
On-behalfpayments - State
Federal sources
Total Revenues 99,392 - 10,582 339,708
EXPENDITURES
Salaries and benefits 90,290
Purchased services 5,906 - 4,870 339,707
Supplies and materials 66 - 5,712
Other objects
On-behalf payments - State
Total Expenditures 96,262 - 10,582 339,707
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 3,130
OTHER FINANCING SOURCES (USES)
Transfer in 10,719
Transfer out
Interest
Total Other Financing Sources (Uses) 10,719
NET CHANGE IN FUND BALANCE 13,849
FUND BALANCE - BEGINNING, RESTATED 109,375 119 - 3,420 -
FUND BALANCE - ENDING $ 123,224 $ 119 $ - $ 3,421
64
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERAL FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30,2011
General
State Aid & Department of
Lunch & Corrections - Futures
Breakfast Baby Talk GED Contract Foundation
REVENUES
Local sources $ 31,171 $ 154,765 $ - $ 1,000
State sources 146,822 - 16,142
On-behalfpayments - State
Federal sources 4,878
Total Revenues 182,871 154,765 16,142 1,000
EXPENDITURES
Salaries and benefits 117,431 145,946
Purchased services 47,658 8,819 16,142
Supplies and materials 3,343 - - 1,356
Other objects
On-behalfpayments - State
Total Expenditures 168,432 154,765 16,142 1,356
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 14,439 - - (356)
OTHER FINANCING SOURCES (USES)
Transfer in
Transfer out
Interest - - - 4,193
Total Other Financing Sources (Uses) - - - 4,193
NET CHANGE IN FUND BALANCE 14,439 - - 3,837
FUND BALANCE - BEGINNING, RESTATED 239,074 - 70 - 25,454
FUND BALANCE - ENDING $ 253,513 $ - $ 70 $ 29,291
65
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERAL FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2011
School
~rovement TOTALS
REVENUES
Local sources $ 834,726 $ 1,739,622
State sources - 1,034,383
On-behalfpayments - State - 582,094
Federal sources - ~878
Total Revenues 834,726 3,360,977
EXPENDITURES
Salaries and benefits 601,499 1,527,256
Purchased services 233,227 945,617
Supplies and materials - 41,428
Other objects - 719
On-behalfpayments - State - 582,094
Total Expenditures 834,726 3,097,114
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES - 263,863
OTHER FINANCING SOURCES (USES)
Transfer in - 231,373
Transfer out - (229,545)
Interest - 5,301
Total Other Financing Sources (Uses) - 7,129
NET CHANGE IN FUND BALANCE - 270,992
FUND BALANCE - BEGINNING, RESTATED - - 2,508,355
FUND BALANCE - ENDING $ - $ 2,779,347
66
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
EDUCATION FUND
JUNE 30,2011
Adult Education
Adult Education Public Adult Education Adult Education
Performance Assistance State Basic Federal Basic
ASSETS
Cash and cash equivalents $ - $ - $ - $
Due from other governments:
State 41,843 28,976 14,715
Federal -
TOTAL ASSETS $ 41,843 $ 28,976 $ 14,715 $
LIABILITIES
Accounts payable $ 78 $ 3 $ 85 $
Due to other funds 41,765 28,973 14,630
Deferred revenue 35,128 24,100 12,123
Total Liabilities 76,971 53,076 26,838
FUND BALANCE (DEFICIT)
Restricted
Unassigned (35,128) (24,100) (12,123)
Total Fund Balance (Deficit) (35,128) (24,100) (12,123)
TOTAL LIABILITIES AND FUND BALANCE (DEFICIT) $ 41,843 $ 28,976 $ 14,715 $
67
MACONIPIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
EDUCATION FUND
JUNE 30, 2011
Truants
Adult WIS - Alternative/
Education Year Round Optional Gifted
Transition Center Youth Program I Education Program
ASSETS
Cash and cash equivalents $ - $ - $ - $
Due from other governments:
State 21,774 - 215,262
Federal - 4,103 _
TOTAL ASSETS $ 21,774 $ 4,103 $ 215,262 $
LIABILITIES
Accounts payable $ 864 $ 140 $ 23,363 $
Due to other funds 20,910 3,963 191,899
Deferred revenue 5,007 - 19,569
Total Liabilities 26,781 4,103 234,831
FUND BALANCE (DEFICIT)
Restricted
Unassigned (5,007) - (19,569)
Total Fund Balance (Deficit) (5,007) - (19,569)
TOTAL LIABILITIES AND FUND BALANCE (DEFICIT) $ 21,774 $ 4,103 $ 215,262 $
68
MACON/PIATT COUNTIES
REGIONAL OFFICE OF EDUCATION #39
COMBINING SCHEDULE OF ACCOUNTS
EDUCATION FUND
JUNE 30, 2011
Special
Title II Educaton for
ROEIISC Teacher Regional Department of
Operations Quality Safe Schools Corrections
ASSETS
Cash and cash equivalents $ - $ - $ - $
Due from othe