FY11-ROE45-Fin-Full

              State of Illinois
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
FINANCIAL AUDIT
(In Accordance with the Single Audit Act
& OMB Circular A-133)
For the Year Ended June 30, 2011
Performed as Special Assistant Auditors
for the Office of the Auditor General
State of Illinois
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
TABLE OF CONTENTS
Officials . . . . . . . . . . . . . . . . . . . . . . 1
Compliance Report Summary . . . . . . . . . . . . . . . . . 2-3
Financial Statement Report Summary . . . . . . . . . . . . . . . 4
AUDITOR’S REPORTS
Independent Auditor’s Report . . . . . . . . . . . . . . . . . 5-6
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 . . . . 7-8
Independent Auditor’s Report on Compliance with Requirements That Could
Have a Direct and Material Effect on Each Major Program and on Internal
Control Over Compliance in Accordance with OMB Circular A-133 . . . . . . . 9-10
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Section I - Summary of Auditor’s Results . . . . . . . . . . . . . . 11
Section II - Financial Statement Findings . . . . . . . . . . . . . . 12
Section III - Findings and Questioned Costs for Federal Awards . . . . . . . . . 13
Corrective Action Plan for Current Year Audit Findings . . . . . . . . . . . 14
Summary Schedule of Prior Audit Findings . . . . . . . . . . . . . . 15
MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis . . . . . . . . . . . . . . 16a-16h
BASIC FINANCIAL STATEMENTS
Statement of Net Assets . . . . . . . . . . . . . . . . . . . 17
Statement of Activities . . . . . . . . . . . . . . . . . . . 18
Balance Sheet - Governmental Funds . . . . . . . . . . . . . . . 19
Reconciliation of the Governmental Funds
Balance Sheet to the Statement of Net Assets . . . . . . . . . . . . 20
Statement of Revenues, Expenditures, and
Changes in Fund Balances - Governmental Funds . . . . . . . . . . . 21
BASIC FINANCIAL STATEMENTS - CONCLUDED
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities - Governmental Funds . . . . . . 22
Statement of Net Assets - Proprietary Fund . . . . . . . . . . . . . . 23
Statement of Revenues, Expenses, and
Changes in Fund Net Assets - Proprietary Fund . . . . . . . . . . . . . 24
Statement of Cash Flows - Proprietary Fund . . . . . . . . . . . . . . 25
Statement of Fiduciary Net Assets - Fiduciary Fund . . . . . . . . . . . . 26
Notes to the Financial Statements . . . . . . . . . . . . . . . . 27-49
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund – Schedule of Funding Progress - Unaudited . . . . . 50
OTHER SUPPLEMENTAL INFORMATION
Combining Schedule of Accounts - General Fund . . . . . . . . . . . . 51
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances - General Fund Accounts . . . . . . . . . . . 52
Combining Schedule of Accounts - Education Fund . . . . . . . . . . . . 53
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Education Fund Accounts . . . . . . . . . . 54
Combining Schedule of Accounts - Education Fund - Chester Office . . . . . . . 55-56
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Education Fund Accounts - Chester Office . . . . . . 57-58
Combining Schedule of Accounts - Education Fund -
Adult Education Programs - Chester Office . . . . . . . . . . . . 59
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Education Fund Accounts - Adult Education Programs - Chester Office . . . . . 60
Budgetary Comparison Schedules
Adult Education - Federal Basic . . . . . . . . . . . . . . . 61
Adult Education - Public Assistance . . . . . . . . . . . . . 62
Adult Education - State Basic . . . . . . . . . . . . . . . 63
Adult Education - State Performance . . . . . . . . . . . . . 64
OTHER SUPPLEMENTAL INFORMATION (CONCLUDED)
Secretary of State Family Literacy Program . . . . . . . . . . . . 65
Regional Safe Schools . . . . . . . . . . . . . . . . 66
Mathematics and Science Partnership (FY2011) . . . . . . . . . . . 67
Mathematics and Science Partnership (FY2011) . . . . . . . . . . . 68
Mathematics and Science Partnership (FY2010) . . . . . . . . . . . 69
Combining Schedule of Accounts - Education Fund -
Waterloo Office . . . . . . . . . . . . . . . . . . 70-72
Combining Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Education Fund Accounts - Waterloo Office . . . . . . . 73-75
Budgetary Comparison Schedules
Mathematics & Science Partnership (FY2011) . . . . . . . . . . . 76
Mathematics & Science Partnership (FY2011) . . . . . . . . . . . 77
Mathematics & Science Partnership (FY2010) . . . . . . . . . . . 78
ARRA - Title I - School Improvement and Accountability . . . . . . . . 79
Rural Education Achievement Program . . . . . . . . . . . . . 80
McKinney Vento Education for Homeless Children . . . . . . . . . . 81
Gifted Education . . . . . . . . . . . . . . . . . . 82
ROE/ISC Operations . . . . . . . . . . . . . . . . . 83
Beginning Teacher Induction Pilot Program (FY2011) . . . . . . . . . 84
Beginning Teacher Induction Pilot Program (FY2010) . . . . . . . . . 85
Learn and Serve America . . . . . . . . . . . . . . . . 86
We the People Citizen Project . . . . . . . . . . . . . . . 87
Truants Alternative Optional Education . . . . . . . . . . . . . 88
Combining Balance Sheet - Nonmajor Special Revenue Funds . . . . . . . . . 89
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Nonmajor Special Revenue Funds . . . . . . . . . . 90
Combining Statement of Fiduciary Net Assets - Agency Funds . . . . . . . . . 91
Combining Statement of Changes in Assets and
Liabilities - Agency Funds . . . . . . . . . . . . . . . . . 92
Schedule of Disbursements to School District Treasurers and Other Entities . . . . . . 93
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . 94
Notes to the Schedule of Expenditures of Federal Awards . . . . . . . . . . 95
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
OFFICIALS
Regional Superintendent Mr. Marc L. Kiehna
(Current and during the Audit Period)
Assistant Regional Superintendent Mr. Kelton J.V. Davis
(Current and during the Audit Period)
Offices are located at:
107 East Mill Street
Waterloo, Illinois 62298
Randolph County Courthouse
#1 Taylor Street
Chester, Illinois 62233
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
COMPLIANCE REPORT SUMMARY
The compliance audit testing performed during this audit was conducted in accordance with Government
Auditing Standards and in accordance with the Illinois State Auditing Act.
AUDITORS' REPORTS
The auditors’ reports on compliance and internal controls do not contain scope limitations, disclaimers, or
other significant non-standard language.
SUMMARY OF AUDIT FINDINGS
Number of This Audit Prior Audit
Audit findings 1 0
Repeated audit findings 0 0
Prior recommendations implemented
or not repeated 0 0
A matter, which is less than a significant deficiency or material weakness but more than inconsequential, has
been reported in a Management Letter of Comment to the Regional Superintendent.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-01 12 Inadequate Monitoring of Collateral on Deposits Material Weakness
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
None
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
None
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
None
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
EXIT CONFERENCE
An informal exit conference was held with Agency personnel on September 12, 2011 to review the auditor’s
report. Attending were Marc Kiehna, Regional Superintendent, Kelton Davis, Assistant Regional
Superintendent, Linda Schmidt, Comptroller, Michelle Coleman, Fiscal Assistant, Kimberly Walker, CPA,
Partner, Kemper CPA Group LLP, and Kara Bevis, Senior, Kemper CPA Group LLP. Responses to the
recommendations were provided by Marc Kiehna, Regional Superintendent on 12/15/2011.
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
FINANCIAL STATEMENT REPORT SUMMARY
The audit of the accompanying basic financial statements of the Regional Office of Education #45 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
#45’s basic financial statements.
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Certified Public Accountallt5 and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable V(illiam 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 Monroe and Randolph Counties Regional Office of Education #45, as of
and for the year ended June 30, 2011, which collectively comprise the Monroe and Randolph Counties
Regional Office of Education #45's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Monroe and Randolph Counties Regional Office of
Education #45'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 th~~ 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 Monroe and Randolph Counties Regional Office of
Education #45, as of June 30, 2011, and the respective changes in financial position and cash flows, where
applicable, thereof for the year then ended in conformity with accounting principles generally accepted in
the United States of America.
The Monroe and Randolph Counties Regional Office of Education #45 adopted GASB Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions during the year ended June 30, 2011.
The statement changed the classifications of governmental fund balances and clarified the definitions of
existing fund types. The adoption of this statement had no effect on any of the Monroe and Randolph
Counties Regional Office of Education #45's governmental funds' assets or liabilities nor was there any
effect to the total amount of any of the Monroe and Randolph Counties Regional Office of Education #45's
governmental fund balances as of and for the year ended June 30,2011.
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3401 Professional Park Drive P.O. Box 129
Phone: (618)997-3055 Fax: (618)997-5121
Marion, IL 62959
kern percpa.C()lTl
In accordance with Government Auditing Standards, we have also issued a report dated February 01, 2012
on our consideration of the Monroe and Randolph Counties Regional Office of Education #45’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 internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The Management’s Discussion and Analysis and Illinois Municipal Retirement Fund Schedule of Funding
Progress on pages 16a-16h and 50 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 Monroe and Randolph Counties Regional Office of Education #45's basic financial statements.
The combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the
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 accompanying
Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by
U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-
Profit Organizations, and is also not a required part of the basic financial statements. The combining and
individual nonmajor fund financial statements, budgetary comparison schedules, Schedule of Disbursements
to School District Treasurers and Other Entities, and the Schedule of Expenditures of Federal Awards have
been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a
whole.
KEMPER CPA GROUP LLP
Certified Public Accountants and Consultants
Marion, Illinois
February 01, 2012
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KEMPER
CPA GROUPl.l.£>
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 Monroe and Randolph Counties Regional Office of Education #45, as of and for the year
ended June 30, 2011, which collectively comprise the Monroe, and Randolph Counties Regional Office of
Education #45's basic financial statements and have issued our report thereon dated February 01,2012. 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.
Management of the Monroe and Randolph Counties Regional Office of Education #45 is responsible for
establishing and maintaining effective internal control over financial reporting. In planning and performing
our audit, we considered the Monroe and Randolph Counties Regional Office of Education #45'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 Monroe and Randolph Counties Regional Office of Education #45's internal control
over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Monroe and
Randolph Counties Regional Office of Education #45's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in the internal control over financial
reporting that might be significant deficiencies or material weaknesses and therefore, there can be no
assurance that all deficiencies, significant deficiencies or material weaknesses have been identified.
However, as described in the accompanying Schedule of Findings and Questioned Costs we identified
certain deficiencies in internal control over financial reporting that we consider to be material weaknesses.
A deficienc)) in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in
internal control such that there is a reasonable possibility that a lnaterial misstatement of the entity's
financial statements will not be prevented, or detected and corrected on a timely basis. We consider the
deficiency described in finding 11-01 in the accompanying Schedule of Findings and Questioned Costs to be
a material weakness.
7
3401 Professional Park Drive P.O. Box 129 Marion, IL 62959
Phone: (618)997-3055 Fax: (618)997-5121 kCfllpercpa.conl
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Monroe and Randolph Counties Regional
Office of Education #45’s financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion.
The results of our tests disclosed an instance of noncompliance or other matters that is required to be
reported under Government Auditing Standards and which is described in the accompanying Schedule of
Findings and Questioned Costs as item 11-01.
We also noted certain matters which we have reported to management of the Monroe and Randolph
Counties Regional Office of Education #45 in a separate letter dated February 01, 2012.
Monroe and Randolph Counties Regional Office of Education #45’s response to the finding identified in our
audit is described in the accompanying Schedule of Findings and Questioned Costs. We did not audit
Monroe and Randolph Counties Regional Office of Education #45’s response and, accordingly, we express
no opinion on it.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency management, others within the 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.
KEMPER CPA GROUP LLP
Certified Public Accountants and Consultants
Marion, Illinois
February 01, 2012
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Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITI! REQUIREMENTS THAT
COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133
Honorable 'William G. Holland
Auditor General
State of Illinois
We have audited the Monroe and Randolph Counties Regional Office of Education #45's compliance with
the types of compliance requirements described in the OMB C"lircular A-i33 Compliance Supplement that
could have a direct and material effect on each of the Monroe and Randolph Counties Regional Office of
Education #45's major federal programs for the year ended June 30, 2011. The Monroe and Randolph
Counties Regional Office of Education #45's major federal programs are identified in the summary of
auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with
the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs
is the responsibility of the Monroe and Randolph Counties Regional Office of Education #45' s management.
Our responsibility is to express an opinion on the Monroe and Randolph Counties Regional Office of
Education #45's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-I33
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and material effect on a
major federal program occurred. An audit includes examining, on a test basis, evidence about the Monroe
and Randolph Counties Regional Office of Education #45's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the
Monroe and Randolph Counties Regional Office of Education #45's compliance with those requirements.
In our opinion, the Monroe and Randolph Counties Regional Office of Education #45 complied, in all
material respects, with the compliance requirements referred to above that could have a direct and material
effect on each of its major federal programs for the year ended June 30, 2011.
Internal Control Over Compliance
Management of the Monroe and Randolph Counties Regional Office of Education #45 is responsible for
establishing and maintaining effective internal control over compliance with the requirements of laws,
regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we
considered the Monroe and Randolph Counties Regional Office of Education #45's internal control over
compliance with the requirements that could have a direct and material effect on a major federal program to
determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and
9
3401 Professional Park Drive P.O. Box 129
Ph()ne: (618)997-3055 Fax: (618)997-5121
Marion, IL 62959
kcrnp(:~rcpa.conl
report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose
of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of the Monroe and Randolph Counties Regional Office of Education
#45’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency,
or combination of deficiencies, in internal control over compliance, such that there is a reasonable
possibility that material noncompliance with a type of compliance requirement of a federal program will not
be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify
any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined
above.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency 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.
KEMPER CPA GROUP LLP
Certified Public Accountants and Consultants
Marion, Illinois
February 01, 2012
10
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2011
SECTION I - SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor’s report issued: Unqualified
Internal control over financial reporting:
 Material weakness(es) identified? Yes
 Significant Deficiency(ies) identified that are not considered to
be material weakness(es)? No
 Noncompliance material to financial statements noted? Yes
Federal Awards
Internal control over major programs:
 Material weakness(es) identified? No
 Significant Deficiency(ies) identified that are not considered to
be material weakness(es)? No
Type of auditor’s report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in accordance with
OMB Circular A-133, Section 510(a)? No
Identification of major programs:
CFDA Number(s) Name of Federal Program or Cluster
84.366B Mathematics and Science Partnerships
Dollar threshold used to distinguish between Type A and Type B programs: $300,000
Auditee qualified as a low-risk auditee? No
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2011
SECTION II - FINANCIAL STATEMENT FINDINGS
Finding No.: 11-01 – Inadequate Monitoring of Collateral on Deposits
Criteria/Specific Requirement:
The Public Funds Deposit Act (30 ILCS 225/1) gives the authorization for deposits in excess of the federally
insured limit to be covered by pledged collateral held by the financial institutions’ trust departments in the
Regional Office of Education #45’s name. In addition, prudent business practice requires that all cash and
investments held by financial institutions for the ROE be adequately covered by depository insurance or
collateral.
Condition:
As of June 30, 2011, cash account balances with one bank totaled $425,601. The Federal Deposit Insurance
Corporation (FDIC) covers up to a maximum of $250,000. Additional collateral totaling $61,404 was received
as of June 30, 2011. The Regional Office of Education #45 had made a formal arrangement with the bank to
automatically provide additional collateral for balances exceeding the FDIC coverage; however, additional
collateral was not provided by the bank for the balance of $114,197.
Effect:
Failure to secure full collateral on cash balances may result in monetary losses to the Regional Office of
Education #45.
Cause:
According to the Regional Office of Education #45 management, the required additional collateral for the
Regional Office of Education #45’s deposits was due to the bank insufficiently monitoring account balances
when assigning collateral.
Recommendation:
The Regional Office of Education #45 should monitor collateral held for its bank accounts. The Regional
Office of Education #45 should also establish controls for confirming amounts pledged by the bank on a
regular basis, especially when cash balances exceed the FDIC level.
Management’s Response:
The Regional Office of Education #45 agrees with the finding. Management will meet with bank personnel to
review the agreement about additional collateral for the Regional Office of Education and to request a regular
statement showing the amounts that have been pledged. The Regional Office of Education #45's staff will
more closely monitor collateral pledged on bank account balances.
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2011
SECTION III – FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
None
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS
For the Year Ended June 30, 2011
CORRECTIVE ACTION PLAN
Finding No.: 11-01 – Inadequate Monitoring of Collateral on Deposits
Condition:
As of June 30, 2011, cash account balances with one bank totaled $425,601. The Federal Deposit Insurance
Corporation (FDIC) covers up to a maximum of $250,000. Additional collateral totaling $61,404 was received
as of June 30, 2011. The Regional Office of Education #45 had made a formal arrangement with the bank to
automatically provide additional collateral for balances exceeding the FDIC coverage; however, additional
collateral was not obtained for the balance of $114,197.
Plan:
Management will meet with bank personnel to review the agreement about additional collateral for the
Regional Office of Education and to request a regular statement showing the amounts that have been pledged.
The Regional Office of Education #45's staff will more closely monitor collateral pledged on bank account
balances.
Anticipated Date of Completion:
September 30, 2011
Name of Contact Person:
Marc Kiehna, Regional Superintendent
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REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the Year Ended June 30, 2011
Finding Number Condition Current Status
There are no prior year findings.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
2011 Financial Highlights
•
•
•
Overview of the Financial Statements
•
•
•
•
•
•
Required Supplementary Information further explains and supports the financial statements.
Management’s Discussion and Analysis introduces the basic financial statements and provides an
analytical overview of the Agency’s financial activities.
Other information includes combining financial statements and budgetary information for certain general
fund accounts, education fund accounts, and other non-major accounts.
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
Management's Discussion and Analysis
As management of Monroe and Randolph Counties Regional Office of Education #45 (ROE #45), we offer
readers of our financial statements this narrative overview and analysis of the financial activities of the ROE #45
for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in
conjunction with ROE #45's financial statements, which follow this section.
For the Year Ended June 30, 2011
The government-wide financial statements consist of a Statement of Net Assets and a Statement of
Activities. These financial statements provide information about the activities of ROE #45 as a whole and
present an overall view of the Agency's finances in a manner similar to private sector businesses.
16a
The Fund Financial Statements illustrate how governmental services were financed in the short term, as
well as what remains for future spending. Fund financial statements report ROE #45’s operations in more
detail than the government-wide statements by providing information about the most significant funds.
Notes to the Financial Statements provide additional information that is essential to a full understanding
of the data provided in the basic financial statements.
The assets of Regional Office of Education #45 exceeded its liabilities by $844,468 (net assets). Of this
amount, $62,478 is restricted for educational purposes. $56,288 accounts for the capital assets with no
related debt.
The Regional Office of Education #45's total net assets increased by $32,999. This change was partially
attributable to an increase in cash of $90,508 and a decrease in the amount due from governmental
activities of $6,179. Deferred revenue for grants ending after June 30, 2011 reflected a $143,207 increase
from the previous year.
The capital assets (net) of Regional Office of Education #45 decreased by $11,630 mostly attributable to
the disposal of depreciated assets. The net change in accumulated depreciation was a decrease of $13,710
which is similar to the prior year. See note #8 for further details.
The annual report consists of a series of financial statements and other information, as follows:
Overview of the Financial Statements (Continued)
•
•
The Statement of Activities presents information showing how ROE #45’s net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change
occurs, regardless of timing of related cash flows. Thus, revenues and expenses are reported in this statement for
certain items that will only result in cash flows in future fiscal periods.
The Statement of Net Assets presents information on all of ROE #45’s assets and liabilities, with the difference
between the two reported as net assets. Over time, increases and decreases in net assets may serve as a useful
indicator of whether the financial position of ROE #45 is improving or deteriorating.
In the government-wide financial statements , ROE #45’s activities are divided into two categories:
Governmental activities : Most of ROE #45’s basic services are included here, such as regular and special
education instruction, instructional staff support services and administration. Federal, state and local
grants and contributions finance many of these activities.
Business-type activities : ROE #45 charges fees to help cover the costs of certain services it provides, such
as workshops, and conferences.
For the Year Ended June 30, 2011
Management's Discussion and Analysis (Continued)
MONROE AND RANDOLPH COUNTIES
REGIONAL OFFICE OF EDUCATION #45
The government-wide financial statements can be found on pages 17-18 of this report.
16b
Fund financial statements. The fund financial statements provide detailed information about ROE #45’s funds,
focusing on its most significant or “major” funds, not ROE #45 as a whole. Funds are accounting devices ROE
#45 uses to keep track of specific sources of funding and spending on particular programs. Some funds are
required by state law. ROE #45 establishes other funds to control and manage money for particular purposes,
such as educational instruction in specific areas or in order to show that it is properly using certain revenues, such
as federal grants. All of the funds of ROE #45 can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Government-wide financial statements. The government-wide financial statements are designed to provide
readers with a broad overview of ROE #45’s finances, in a manner similar to private-sector businesses.
Overview of the Financial Statements (Continued)
The basic fiduciary fund statement can be found on page 26 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government-wide financial statements because the
resources of those funds are not available to support ROE #45's own programs. The accounting for fiduciary
funds is much like that used for proprietary funds.
16c
The proprietary fund required financial statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Fund Net Assets and a Statement of Cash Flows. The basic proprietary fund financial
statements can be found on pages 23-25 of this report.
Management's Discussion and Analysis (Continued)
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
Governmental funds. Governmental funds account for most of ROE #45’s basic services. However, unlike the
government-wide financial statements, governmental fund financial statements focus on the near-term inflows
and outflows of spendable resources, as well as on the balances of spendable resources available at the end of the
fiscal year. Consequently, the governmental fund statements provide a detailed short-term view that helps
determine whether there are more or fewer financial resources that can be spent in the near future to finance
programs. Because the governmental fund information does not encompass the additional long-term focus of the
government-wide statements, it is useful to compare the statements. By so doing, the readers may better
understand the long-term impact of the government's near term financing decisions. Both the governmental fund
Balance Sheet and the Statement of Revenue, Expenditures, and Changes in Fund Balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
Proprietary funds. ROE #45 maintains one type of proprietary fund. Enterprise funds are used to report the
same functions presented as business-type activities in the government-wide statements. ROE #45 uses
enterprise funds to account for educational services for which it charges a fee. Proprietary fund statements
provide the same type of information as the government-wide financial statements, but with more detail and
additional information, such as cash flows. The proprietary fund financial statements provide separate
information for the Registration fund, and it is considered a major fund.
The basic governmental fund financial statements can be found on pages 19 and 21 of this report.
ROE #45 maintains 5 individual governmental funds; the general fund, education fund, bus driver permit fund,
general education development fund, and teachers' institute fund. Information is presented separately in the
governmental fund Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for
the general fund and education fund, both considered to be major funds. Data from the other three governmental
funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major
governmental funds is provided in the form of combining statements elsewhere in this report.
Overview of the Financial Statements (Concluded)
16d
ROE #45's net assets are split approximately 79% to governmental activities and 21% to business-type activities.
Of the governmental net assets, approximately 8% are invested in capital assets, 9% restricted as to use, and the
remaining 83% unrestricted as to use.
The combining statements referred to earlier in connection with non-major governmental funds and combining
statements for the general and education funds are presented immediately following the required supplementary
information. Combining and individual fund statements and schedules can be found on pages 51-60, 70-75, and
89-92 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this report also
presents certain supplementary information concerning ROE #45. Overall budgeting is not a legal requirement
for ROE #45. Accordingly, formal budgets are not adopted; and therefore, budgetary comparison schedules are
not included in the required supplementary information (RSI). However, ROE #45 is the recipient of monies
from the Illinois State Board of Education (ISBE) for certain accounts within the general fund and for most
accounts within the education fund on which ISBE requires budgetary comparison to actual results. Budgetary
comparison schedules have been provided for the ISBE accounts to demonstrate compliance and can be found on
pages 65-69, and 76-88 of this report. In addition, budgetary comparison schedules have been provided for the
grants received from the Illinois Community College Board (ICCB), which can be found on pages 61-64 of this
report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of financial position. In the case of ROE
#45, assets exceeded liabilities by $844,468 at the close of fiscal year 2011.
MONROE AND RANDOLPH COUNTIES
Management's Discussion and Analysis (Continued)
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found on pages 27-49 of this report.
For the Year Ended June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
2011 2010 2011 2010 2011 2010
Current and other assets $ 844,414 $ 635,811 $ 179,701 $ 309,148 $ 1,024,115 $ 944,959
Capital assets 55,351 66,693 937 1,225 56,288 67,918
Total assets 899,765 702,504 180,638 310,373 1,080,403 1,012,877
Other liabilities 228,915 43,493 7,020 157,915 235,935 201,408
Long-term debt - - - - - -
Total liabilities 228,915 43,493 7,020 157,915 235,935 201,408
Net assets:
Invested in capital assets,
55,351 66,693 937 1,225 56,288 67,918
Restricted 62,478 39,958 - - 62,478 39,958
Unrestricted 553,021 552,360 172,681 151,233 725,702 703,593
Total net assets $ 670,850 $ 659,011 $ 173,618 $ 152,458 $ 844,468 $ 811,469
Management's Discussion and Analysis (Continued)
Government-wide Financial Analysis (Continued)
net of related debt
During 2011, current assets, comprised predominately of cash and receivables, increased $79,156 due mainly to
acquiring additional grants. There was an increase in the amount of current assets and a decrease of $11,630 for
capital assets. The net assets of the business-type activities increased by $21,160. A portion of the increase in the
net assets of the business type activities are attributed to the facilitation of the academic credit for teachers
involved in the statewide Gifted Education Program.
Total
16e
ROE 45's Net Assets
Activities Activities
Governmental Business-type
As indicated above, ROE #45 reported positive net assets for both the governmental and business-type activities.
The assets of ROE #45 exceeded its liabilities at the close of the year by $844,468 (net assets). Approximately
86% of net assets are unrestricted and 7% is restricted for specific purposes of governmental activities. The
investment in net capital assets was $56,288 at June 30, 2011. ROE #45 uses these capital assets in providing
services to its citizens; consequently, these assets are not available for future spending.
For the Year Ended June 30, 2011
MONROE AND RANDOLPH COUNTIES
REGIONAL OFFICE OF EDUCATION #45
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services $ 18,957 $ 23,312 $ 120,951 $ 82,009 $ 139,908 $ 105,321
Operating grants &
contributions 1,276,653 907,454 810 2,735 1,277,463 910,189
General revenues:
Local sources 387,885 304,483 - - 387,885 304,483
State sources 108,387 55,849 - - 108,387 55,849
Transfers - - - -
On-behalf payments 317,860 322,329 - - 317,860 322,329
Interest 2,446 6,564 1,136 1,641 3,582 8,205
Total revenues 2,112,188 1,619,991 122,897 86,385 2,235,085 1,706,376
Expenses:
Salaries and benefits 789,046 773,966 53,060 25,768 842,106 799,734
Purchased services 416,769 312,948 43,634 18,831 460,403 331,779
Supplies and materials 192,984 93,189 4,741 4,661 197,725 97,850
Payments to Govts 357,762 97,988 - - 357,762 97,988
Other 10,995 13,890 14 11,009 13,890
Depreciation 14,933 12,703 288 216 15,221 12,919
On-behalf payments 317,860 322,329 - - 317,860 322,329
Total expenses 2,100,349 1,627,013 101,737 49,476 2,202,086 1,676,489
Increase (decrease) in
net assets 11,839 (7,022) 21,160 36,909 32,999 29,887
Net assets-beginning 659,011 666,033 152,458 115,549 811,469 781,582
Net assets-ending $ 670,850 $ 659,011 $ 173,618 $ 152,458 $ 844,468 $ 811,469
Net assets of ROE #45 increased by $32,999 during 2011. Governmental activities contributed an increase of
$11,839 Business-type activities increased by $21,160. Key elements of the change are as follows:
Government-wide Financial Analysis (Concluded)
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
ROE 45's Changes in Net Assets
Activities Activities
Governmental Business-type
16f
Total
Management's Discussion and Analysis (Continued)
REGIONAL OFFICE OF EDUCATION #45
Governmental Activities
Business-Type Activities
Financial Analysis of ROE #45's Funds
Governmental funds. As previously noted, ROE #45 uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. ROE #45’s governmental funds reported combined fund
balances of $581,836 an increase of $13,729 from last year’s ending fund balance of $568,107. The increase is
mostly attributable to increases in deferred revenue and accounts payable and a decrease of assets due from other
governments.
MONROE AND RANDOLPH COUNTIES
Proprietary funds. ROE #45's proprietary funds consist of enterprise funds. The enterprise fund activity is the
same type of information found in the government-wide financial statements, but in more detail. Aspects
concerning the finances have already been addressed in the discussion of ROE #45's business-type activities.
16g
REGIONAL OFFICE OF EDUCATION #45
For the Year Ended June 30, 2011
Revenues for governmental activities were $2,112,188 and expenses were $2,100,349. Revenues increased
$492,197 due mostly to the receipt of additional grants for Mathematics and Science during the year ended June
30, 2011.
The general fund is the chief operating fund of ROE #45. The beginning fund balance numbers shown here
reflect a reclassification of $193,086 of General State Aid from the education fund to the general fund. The
reclassification was due to the implementation of GASB Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions . At the end of the current fiscal year, the nonspendable, assigned, and
unassigned fund balance of the general fund increased by $28,454 after the reflection of the $193,086
reclassification. The education fund decreased by $12,972 to ($25,708), excluding the decrease of the $193,086
reclassification explained above. The education fund balance, consisting of nonspendable, assigned, and
unassinged amounts, is for specific education program use.
With the substantial increase in revenues, we could expect to see an increase in expenses as well. Overall
governmental expenses increased approximately $477,805 (exclusive of on-behalf payments) consisting primarily
of a increase of approximately $15,080 in salaries and benefits, $103,821 in purchased services, $99,795 in
supplies and materials and $2,230 in depreciation. Payments to other governments increased by $259,774 and
other expenses decreased by $2,895. The increase in payment of other governments, purchased services and
supplies and materials was directly related to an increase of grant funding. The depreciation increase was
minimal at $2,230.
Management's Discussion and Analysis (Continued)
The charges for services increased by $38,942 when compared to 2010. A large portion of the increase is
attributable to the facilitation of the academic credit for teachers involved in the statewide Gifted Education
Program. Overall expenses increased by $52,261 when compared to 2010. Salaries and benefits increased by
$27,292. A portion of this increase is attributable to clerical support for the statewide Gifted Education Program.
Purchased services increased by $24,803, and supplies and materials increased a minimal amount of $80.
Budgetary Highlights
2011 2010 2011 2010 2011 2010
Equipment $ 55,351 $ 66,693 $ 937 $ 1,225 $ 56,288 $ 67,918
Economic Factors and Next Year's Budget
Contacting ROE #45's Financial Management
16h
ROE #45 had depreciation expense of $15,221 and $12,919 in 2011 and 2010, respectively, with accumulated
depreciation of $141,119 and $154,829 at June 30, 2011 and 2010, respectively. More detailed information
about capital assets is available in Note 8 to the financial statements.
At the time these financial statements were prepared and audited, ROE #45 was uncertain about funding for next
year. Several state and federal grants are being reviewed for continuation which include Title I School
Improvement System of Support, Title II - Teacher Quality, Mathematics & Science Partnership, and Beginning
Teacher Induction Pilot Program.
Capital Assets
Net of Accumulated Depreciation
This financial report is designed to provide ROE #45’s citizens, taxpayers and clients, with a general overview of
ROE #45’s finances and to demonstrate ROE #45’s accountability for the money it receives. If you have
questions about this report or need additional financial information, contact the Regional Superintendent’s Office
of Monroe/Randolph Counties, ROE #45, 107 East Mill Street, Waterloo, Illinois 62298.
During fiscal year 2011, the ROE scrapped obsolete electronic equipment that had an original cost of $28,931.
All scrapped equipment was fully depreciated.
At June 30, 2011 and June 30, 2010, ROE #45 had invested $197,407 and $222,747 respectively, in a broad
range of capital assets, including office equipment, computers and audio-visual equipment.
Governmental Business-type
Total
ROE 45's Capital Assets
Activities Activities
ROE #45 acts as the administrative agent for certain grant programs that are accounted for within the special
revenue funds. These programs have separate budgets and are required to be reported to the Illinois State Board
of Education. In addition, budgetary comparison schedules have been provided for the grants received from the
Illinois Community College Board (ICCB). Comparison of budgeted and actual results for various programs are
presented as supplementary information.
Management's Discussion and Analysis (Continued)
Presenting an overall budget is not a legal requirement of ROE #45. Formal budgets are not adopted for all
funds; therefore budgetary comparison schedules are not included in the required supplementary information.
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
BASIC FINANCIAL STATEMENTS
Assets
Current Assets
Cash and cash equivalents $ 707,162 $ 147,742 $ 8 54,904
Due from other governments 130,910 31,959 1 62,869
Prepaid expenses 6,342 - 6 ,342
Total Current Assets 844,414 179,701 1 ,024,115
Noncurrent Assets
Capital assets, being depreciated, net 55,351 937 5 6,288
Total Noncurrent Assets 55,351 937 5 6,288
Total Assets 899,765 180,638 1 ,080,403
Liabilities
Current Liabilities
Accounts payable 31,901 - 3 1,901
Accrued wages and benefits 19,692 - 1 9,692
Deferred revenue 177,322 - 1 77,322
Due to other governments - 7,020 7 ,020
Total Current Liabilities 228,915 7,020 2 35,935
NET ASSETS
Invested in capital assets, net of related debt 55,351 937 5 6,288
Restricted for educational purposes 62,478 - 6 2,478
Unrestricted 553,021 172,681 7 25,702
TOTAL NET ASSETS $ 670,850 $ 173,618 $ 8 44,468
Activities Activities Total
Governmental Business-Type
June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
STATEMENT OF NET ASSETS
The notes to the financial statements are an integral part of this statement.
17
FUNCTIONS/PROGRAMS
Primary Government
Governmental activities
Instructional services
Salaries $ 615,530 $ 1,945 $ 383,655 $ - $ ( 229,930) $ - $ ( 229,930)
Employees benefits 173,516 79 78,060 ( 95,377) ( 95,377)
Purchased services 416,769 13,752 280,919 - ( 122,098) - ( 122,098)
Supplies and materials 192,984 2,582 172,206 - ( 18,196) - ( 18,196)
Other 10,995 599 460 - ( 9,936) - ( 9,936)
Payments to other governments 357,762 - 357,762 - - - -
Depreciation 14,933 - 3,591 - ( 11,342) - ( 11,342)
Administrative
On-behalf payments - State 317,860 - - - ( 317,860) - ( 317,860)
Total Governmental Activities 2,100,349 18,957 1,276,653 - ( 804,739) - ( 804,739)
Business-type activities
Registration services 101,737 120,951 810 - - 20,024 20,024
Total Business-Type Activities 101,737 120,951 810 - - 20,024 20,024
Total Primary Government $ 2,202,086 $ 139,908 $ 1,277,463 $ - ( 804,739) 20,024 ( 784,715)
General revenues
Local sources 387,885 - 387,885
State sources 108,387 - 108,387
On-behalf payments - State 317,860 - 317,860
Interest 2,446 1,136 3,582
Total General Revenues 816,578 1,136 817,714
Change in Net Assets 11,839 21,160 32,999
Net Assets - Beginning 659,011 152,458 811,469
Net Assets - Ending $ 670,850 $ 173,618 $ 844,468
Expenses Services Contributions Contributions
Business-Type
Activities Activities
Charges for Grants and Grants and Governmental
Total
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
For the Year Ended June 30, 2011
STATEMENT OF ACTIVITIES
Program Revenues Net (Expense) Revenue and Changes in Net Assets
Operating Capital
The notes to the financial statements are an integral part of this statement.
18
Assets
Cash and cash equivalents $ 437,452 $ 213,564 $ 56,146 $ - $ 707,162
Due from other funds 127,070 - - (127,070) -
Due from other governments 3,850 126,990 70 - 130,910
Prepaid expenses 6,262 80 - - 6,342
Total Assets $ 574,634 $ 340,634 $ 56,216 $ (127,070) $ 844,414
Liabilities
Accounts payable $ 66 $ 31,835 $ - $ - $ 31,901
Accrued wages and benefits 19,692 - - - 19,692
Due to other funds - 127,070 - (127,070) -
Deferred revenue 3,548 207,437 - - 210,985
Total liabilities 23,306 366,342 - (127,070) 262,578
Fund Balance
Nonspendable 6,262 80 - - 6,342
Restricted - - 56,216 - 56,216
Assigned 219,665 7,955 - - 227,620
Unassigned 325,401 (33,743) - - 291,658
Total Fund Balances 551,328 (25,708) 56,216 - 581,836
Total Liabilities and Fund Balances $ 574,634 $ 340,634 $ 56,216 $ (127,070) $ 844,414
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
BALANCE SHEET
General
Fund Fund
Education
Other
Non-Major
GOVERNMENTAL FUNDS
June 30, 2011
Funds Funds
Governmental
Total
Eliminations
The notes to the financial statements are an integral part of this statement.
19
Total Fund Balances - Governmental Funds $ 581,836
Amounts reported for governmental activities in the
Statement of Net Assets are different because:
Some revenues will not be collected for several months
after the Regional Office's fiscal yearend, they are not
considered "available" revenues and are deferred in
the governmental funds 33,663
Capital assets used in governmental activities
are not financial resources and therefore, are
not reported in the funds. 55,351
Net Assets of Governmental Activities $ 670,850
THE STATEMENT OF NET ASSETS
June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO
The notes to the financial statements are an integral part of this statement.
20
Revenues
Local sources $ 378,365 $ 9,520 $ 17,604 $ 405,489
State sources 108,387 355,825 1,353 465,565
State sources - payments made on behalf of region 317,860 - - 317,860
Federal sources 3,932 907,444 - 911,376
Total Revenues 808,544 1,272,789 18,957 2 ,100,290
Expenditures
Instructional Services
Salaries 222,521 390,851 2,158 615,530
Employee benefits 93,904 79,524 88 173,516
Purchased services 119,332 282,183 15,254 416,769
Supplies and materials 14,684 175,436 2,864 192,984
Other 9,862 469 664 10,995
Payments to other governments - 357,762 - 357,762
Payments made on behalf of region 317,860 - - 317,860
Capital outlay 3,591 - - 3,591
Total Expenditures 781,754 1,286,225 21,028 2 ,089,007
Excess (Deficiency) of Revenues
Over Expenditures 26,790 (13,436) (2,071) 11,283
Other Financing Sources (Uses)
Interest 1,664 464 318 2,446
Total Other Financing Sources (Uses) 1,664 464 318 2,446
Net Change in Fund Balance 28,454 (12,972) (1,753) 13,729
Fund Balances - Beginning, Restated 522,874 (12,736) 57,969 568,107
Fund Balances - Ending $ 551,328 $ (25,708) $ 56,216 $ 581,836
General
Fund Fund
Education
Other
Non-Major
Funds Funds
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
Governmental
Total
The notes to the financial statements are an integral part of this statement.
21
Net Change in Fund Balance - Total Governmental Funds $ 13,729
Amounts reported for governmental activities in the Statement
of Activities are different because:
FY2010 deferred revenue recognized in FY2011 - State sources ( 24,211)
FY2011 revenue deferred - State sources 3 3,663
Capital outlay $ 3,591
Depreciation expense (14,933) ( 11,342)
Change in Net Assets of Governmental Activities $ 11,839
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
Governmental funds report capital outlays as expenditures and
proceeds from disposals as revenue. However, in the Statement of
Activities the cost of those assets, which meet capitalization
requirements, is allocated over their estimated useful lives and
reported as depreciation expense and gains and losses are reported on
disposals.
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2011
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.
The notes to the financial statements are an integral part of this statement.
22
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
STATEMENT OF NET ASSETS
PROPRIETARY FUND
Assets
Current Assets
Cash and cash equivalents $ 147,742
Due from other governments 31,959
Total Current Assets 179,701
Noncurrent Assets
Capital assets, net of accumulated depreciation 937
Total Noncurrent Assets 937
Total Assets 180,638
Liabilities
Current Liabilities
Due to other governments 7,020
Total Current Liabilities 7,020
Net Assets
Invested in capital assets, net of related debt 937
Unrestricted 172,681
TOTAL NET ASSETS $ 173,618
Business-Type
Activities
Enterprise Funds
Registration
June 30, 2011
The notes to the financial statements are an integral part of this statement.
23
MONROE AND RANDOLPH COUNTIES
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUND
For the Year Ended June 30, 2011
Operating Revenues
Charge for Services $ 120,951
State Sources 810
Total Operating Revenues 121,761
Operating Expenses
Salaries 48,276
Employee benefits 4,784
Purchased services 43,634
Supplies and materials 4,741
Depreciation 288
Other 14
Total Operating Expenses 101,737
Operating Income (Loss) 20,024
Nonoperating Revenues
Interest 1,136
Total Nonoperating Revenues 1,136
Change in Net Assets 21,160
Net Assets - Beginning 152,458
Net Assets - Ending $ 173,618
REGIONAL OFFICE OF EDUCATION #45
Enterprise Funds
Activities
Business-Type
Registration
The notes to the financial statement are an integral part of this statement.
24
REGIONAL OFFICE OF EDUCATION #45
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
For the Year Ended June 30, 2011
Cash flows from operating activities:
Receipts from customers $ (58,773)
Payments to suppliers and providers for goods
and services (48,389)
Payments to employees (53,060)
Other operating cash receipts 810
Net cash provided by (used for) operating activities (159,412)
Cash flows from investing activities:
Interest received on investments 1,136
Net cash provided by (used for) investing activities 1,136
Net increase (decrease) in cash and cash equivalents (158,276)
Cash and cash equivalents - beginning of year 306,018
Cash and cash equivalents - end of year $ 147,742
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:
Operating income (loss) $ 20,024
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation 288
Change in assets and liabilities:
(Increase) decrease in due from other governments (28,829)
Increase (decrease) in due to other governments (148,320)
Increase (decrease) in deferred revenue (2,575)
Net cash provided by (used for) operating activities $ (159,412)
Registration
MONROE AND RANDOLPH COUNTIES
Enterprise Funds
Business-Type
Activities
The notes to the financial statements are an integral part of this statement.
25
Agency
Funds
Assets
Cash and cash equivalents $ 1,186,584
Due from other governments 1,449,306
Total Assets $ 2,635,890
Liabilities
Due to other governments $ 2,635,890
Total Liabilities $ 2,635,890
FIDUCIARY FUND
June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
STATEMENT OF FIDUCIARY NET ASSETS
The notes to the financial statements are an integral part of this statement.
26
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Regional Office of Education #45 was formed under the provisions of the State of Illinois, Illinois State
Board of Education.
In 2011, the Regional Office of Education #45 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 #45 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 February 01, 2012, the date when the financial
statements were available to be issued.
B. Financial Reporting Entity
The Regional Superintendent is responsible for supervision and control of school districts within the
Regional Office of Education #45. This includes all aspects of supervision, reports and financial accounting
of districts which are considered by State law to be in the Service Region. In addition, the Regional
Superintendent is charged with responsibility for registration of the names of applicants for scholarships to
State controlled universities; examinations and related duties; visitation of public schools; direction of
teachers and school officers; to serve as the official advisor and assistant of school officers and teachers; to
conduct teachers institutes as well as to aid and encourage the formation of other teachers’ meetings and
assist in their management; evaluate the schools in the region; examine evidence of indebtedness; file and
keep the returns of elections required to be returned to the Regional Superintendent’s office; and file and
keep the reports and statements returned by school treasurers and trustees.
The Regional Superintendent is also charged with the responsibilities of conducting a special census, when
required; providing notice of money distributed to treasurers, board presidents, clerks, and secretaries of the
school districts on or before each September 30; maintenance of a map and numbering of the Regional
Office of Education #45’s districts; providing township treasurers with a list of district treasurers; to inspect
and approve building plans which comply with State law; to perform and report on annual building
inspections; investigate bus drivers for valid bus driver permits and take related action as may be required;
to maintain a list of unfilled teaching positions and to carry out other related duties required or permitted by
law.
27
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Financial Reporting Entity (Concluded)
The Regional Superintendent is responsible for inspection and approval or rejection of school treasurer’s
bonds. The Regional Superintendent is also required to provide the State Board of Education with an
affidavit showing that the treasurers of school districts under his control are properly bonded.
The Regional Superintendent is also responsible for apportionment and payment of funds received from the
State for the districts in the Regional Office of Education #45, or see that no payments are made unless the
treasurer has filed or renewed appropriate bonds and that the district has certified publication of the annual
financial report. The Regional Superintendent is required to provide opinions and advice related to
controversies under school law.
For the period ended June 30, 2011, the Regional Office of Education #45 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 #45. Such activities are reported as a single
major fund (Education Fund).
C. Scope of the Reporting Entity
The Regional Office of Education #45’s reporting entity includes all related organizations for which they
exercise oversight responsibility.
The Regional Office of Education #45 has developed criteria to determine whether outside agencies with
activities which benefit the citizens of the Regional Office of Education #45, 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 #45 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 #45 does not control the assets, operations, or management of the districts or joint agreements. In
addition, the Regional Office of Education #45 is not aware of any entity, which would exercise such
oversight as to result in the Regional Office of Education #45 being considered a component unit of the
entity.
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 #45’s activities with most of the
interfund activities removed. Governmental activities include programs supported primarily by State and
federal grants and other intergovernmental revenues.
28
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Government-Wide and Fund Financial Statements (Concluded)
The Regional Office of Education #45’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 #45 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 #45’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 and proprietary funds are reported as separate columns in the fund financial statements.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, such as, payables, receivables and transfers. Interfund activities between governmental funds and
between governmental funds and proprietary funds appear as due to/due from on the governmental fund
Balance Sheet and proprietary fund Statement of Net Assets and as other sources and other uses on the
governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances and the proprietary
fund Statement of Revenues, Expenses, and Changes in Fund Net Assets. All interfund transactions
between governmental funds are eliminated on the government-wide financial statements. Interfund
activities between governmental funds and business-type funds remain as due to/due from on the
government-wide financial statements.
The purpose of interfund borrowing and permanent transfers is to cover temporary or permanent shortfalls in
cash flow within grant programs and funds.
E. Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues, Expenses
and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary fund and
nonmajor funds aggregated.
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual
basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on
the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Fund Net Assets present
increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the period
in which the liability is incurred.
29
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Proprietary Fund Financial Statements (Concluded)
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 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.
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. Their reported
fund balance (net current assets) is considered a measure of "available spendable resources." Governmental
fund operating statements present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they are said to present a
summary of sources and uses of "available spendable resources" during a period.
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual
requirements of the numerous individual programs are used as guidance. There are however, essentially two
types of these revenues. In one, monies must be expended on the specific purpose or project before any
30
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Measurement Focus and Basis of Accounting (Concluded)
amounts will be paid to the Monroe & Randolph Counties Regional Office of Education #45; 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, Regional Office of Education #45 funds certain programs by a
combination of specific cost-reimbursement grants and general revenues. Thus, when program expenses are
incurred, there are both restricted and unrestricted resources available to finance the program. It is Regional
Office of Education #45’s policy to first apply restricted funds, then unrestricted. For unrestricted funds,
committed funds are used first, then assigned funds, then unassigned if any.
H. Fund Accounting
The Regional Office of Education #45 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 #45 uses governmental, proprietary, and fiduciary funds.
Governmental Funds
Governmental funds are those through which most governmental functions of the Regional Office of
Education #45 are typically reported. Governmental fund 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 may or must be used. Current liabilities are assigned to the fund
from which they will be paid. The difference between governmental fund assets and liabilities is reported as
a fund balance.
As prescribed by GASB Statement No. 34, governmental fund reporting focuses on the major funds, rather
than on the fund type. There is a two-step process for determining if a fund should be reported as a major
fund: 1) total assets, liabilities, revenues, or expenditures/expenses (excluding extraordinary items) of an
individual fund are at least 10% of the corresponding total for the fund type, and 2) total assets, liabilities,
revenues, or expenditures/expenses (excluding extraordinary items) of an individual fund are at least 5% of
the corresponding total for the total of all governmental and proprietary funds combined. Funds that do not
meet the major fund determination requirements are reported in aggregate as nonmajor funds. The Regional
Office of Education #45 has presented all major funds that met the above qualifications.
31
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds (Continued)
The Regional Office of Education #45 reports the following major governmental funds:
General Fund - The General Fund is the general operating fund of the Regional Office of Education #45. It is
used to account for all financial resources, which benefit all school districts in the region except those required to
be accounted for in another fund. General funds include the following:
Chester Office - This fund is used for general operation of the Chester office of the Regional Office of
Education. It is used to account for all financial resources, except those required to be accounted for in
another fund.
Waterloo Office - This fund is used for general operation of the Waterloo office of the Regional Office of
Education. It is used to account for all financial resources, except those required to be accounted for in
another fund.
General State Aid – This fund accounts for General State Aid used for the general operations of the
Regional Safe Schools program.
County - The Regional Office of Education #45 receives a tax appropriation from Monroe and Randolph
counties for operation purposes. These appropriations are requested on a yearly basis.
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 legally restricted to expenditures for
specified purposes. Major special revenue funds include the following:
Education - This fund is used to account for various grant and educational enhancement programs
including the following:
Adult Education - This fund accounts for monies received from the Illinois Community College
Board (ICCB) for academic and vocational adult education programs including the following:
Federal Basic - This fund accounts for federal monies received from the ICCB which provide
for adult basic education (GED) services for adult education clients.
State Performance - This fund accounts for State monies received from the ICCB that can be
used for any purpose that supports the adult education program.
Public Assistance - This fund accounts for State funds received from the ICCB for vocational
training for adult education clients including computer and certified nurse assistant classes.
State Basic - This fund accounts for State funds received from the ICCB for vocational training
and can be used the same as Public Assistance funds.
32
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds (Continued)
Secretary of State Family Literacy Program - The program provides continuing adult education,
English as a second language, childhood education, parenting resources, and activities for at risk
families in the community of the Regional Office of Education #45.
Regional Safe Schools - This program provides funding for an alternative school program for
students removed from the regular school setting due to disruptive behavior.
Mathematics and Science Partnership - This program is a professional development program
designed to improve the content knowledge and pedagogical skills of 5th through 12th grade teachers
in mathematics and science.
ARRA – Title I – School Improvement and Accountability - The purpose of this grant is to provide
school improvement support and assistance to schools by providing support to the schools through
analyzing student achievement, refining school improvement plans and strategies, and providing
meaningful professional development aligned to the schools’ goals and strategies.
Film Co-op - This account was established for the elementary, secondary, and private schools in the
counties of the Regional Office of Education #45 to provide film and other audio-visual materials to
its member school districts.
Rural Education Achievement Program - This grant is intended to assist the district in raising
student academic achievement and meeting the State’s definition of adequate yearly progress.
McKinney-Vento Education for Homeless Children - The fund provides educational services and
strives to heighten community awareness of the need to serve the homeless population.
Gifted Education - The purpose of this grant is to provide services, including professional
development to teachers, to gifted students.
ROE/ISC Operations - This account is used for general operation of the Regional Office of Education
office.
Beginning Teacher Induction Pilot Program - The purpose of the program is to provide new teachers
with local mentors that assist in the mentoring and induction of these new staff members.
ARRA – Education Jobs Fund Program - The purpose of the program is to provide assistance to save
or create education jobs.
33
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds (Continued)
Substance Abuse Prevention Program - This program provides education to increase awareness in
the areas of alcohol and other drug prevention, intervention, treatment, and recovery.
Learn and Serve America - This program encourages service-learning through the United States and
enables students to make meaningful contributions to their community while building their academic
and civic skills.
We the People Citizen Project - This program promotes competent and responsible participation in
State and local government by actively engaging students in learning how to monitor and influence
public policy and encourages civic participation among students, their parents, and members of the
community.
Red Bud Community Project - This account was established to provide access to a reliable high-speed
network for the Red Bud Community.
Truants Alternative Optional Education - This program provides alternative educational program
services to truant students referred from local schools to the Regional Office of Education #45.
Nonmajor 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 legally restricted to expenditures for
specified purposes. Nonmajor special revenue funds include the following:
Teacher’s Institute - The Teacher’s Institute Fund is authorized by Section 3-12 of the School Code.
All examination, registration and renewal fees are paid into the Teacher’s Institute Fund. The
monies are used to defray administrative expenses incidental to teacher’s institutes, workshops, or
meetings of a professional nature. All funds generated remain restricted until expended only on the
aforementioned activities.
Bus Driver Permit - This fund is used to account for the issuance of school bus driver permits and to
sponsor instructional training courses for school bus drivers.
General Education Development - This fund was established to administer the high school level test
of General Educational Development.
34
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Concluded)
Proprietary Funds
Enterprise Funds - The Enterprise Funds account for the operation of the Registration program. This
operation is financed and operated in a manner similar to private business operations.
Registration - The purpose of the Registration fund is to support professional development
workshops for educators and enrichment programs for students. Educators/students pay registration
fees for programs presented by the office. Presenter fees, supplies, room rental, and food costs are
examples of expenses paid out of the registration fund.
Fiduciary Funds
Agency Funds are used to account for assets held by the Regional Office of Education #45 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 distributes monies received by the State to the school districts and
other entities.
Human Services Educational/Vocational Project - This fund distributes monies received by the State
for an Illinois Department of Human Services project with State mental health facilities for
educating participants.
I. 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, in either form or through legal restrictions. The General
Fund account Waterloo Office Account and the Education Fund account Beginning Teacher
Induction Pilot Program have 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 funds are restricted by Illinois Statute:
Teacher’s Institute, Bus Driver Permit, and General Education Development.
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 #45 has no committed fund balances.
35
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Governmental Fund Balances (Concluded)
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 following General Fund accounts have
assigned fund balances: General State Aid. The Education Fund accounts Film Co-op and We the
People Citizen Project have an assigned fund balance.
Unassigned Fund Balance – Available expendable financial resources in a governmental fund that
are not designated for a specific purpose. The following General Fund accounts have unassigned
fund balances: Chester Office, Waterloo Office, and County. The following Education Fund
accounts have unassigned fund balances: Adult Education-Public Assistance, Adult Education-State
Basic, ROE/ISC Operations, and Truants Alternative Optional Education.
J. Net Assets
Equity is classified as net assets and displayed in three components:
Invested in capital assets - Consists of capital assets, net of accumulated depreciation.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or
"invested in capital assets."
K. Cash and Cash Equivalents
Cash and cash equivalents consists of cash on deposit. The Regional Office of Education #45 considers all
liquid investments, including certificates of deposit, to be cash equivalents.
L. Capital Assets
Capital assets purchased or acquired with an original cost of $500 or more are recorded at historical cost or
estimated historical cost. Contributed assets are recorded at fair market value as of the date received.
Additions, improvements and other capital outlays that significantly extend the useful life of an asset are
capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Capital assets are
depreciated using the straight-line method over the following estimated useful lives:
Equipment Furniture 5-10 years
Office Equipment 3-7 years
36
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)
M. Interfund Receivables and Payables
The recordings of due from and due to other funds are a result of various borrowings between funds during
the year.
N. 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.
O. Budget Information
The Regional Office of Education #45 acts as the administrative agent for certain grant programs that are
accounted for within the General Fund and the Education Fund. These programs have separate budgets and
are required to be reported to the Illinois State Board of Education and Illinois Community College Board;
however, none of the annual budgets have been legally adopted, nor are they required to do so. Certain
programs within the General Fund and the Special Revenue Fund do not have separate budgets.
Comparisons of budgeted and actual results for the following programs are presented as supplementary
information: Adult Education - Federal Basic, Adult Education - Public Assistance, Adult Education - State
Basic, Adult Education - State Performance, Secretary of State Family Literacy Program, Regional Safe
Schools, Mathematics and Science Partnership, ARRA - Title I - School Improvement and Accountability,
Rural Education Achievement Program, McKinney Vento Education for Homeless Children, Gifted
Education, ROE/ISC Operations, Beginning Teacher Induction Pilot Program, Learn and Serve America, We
the People Citizen Project, and Truants Alternative Optional Education.
P. Compensated Absences
Vacation pay is considered an expenditure in the year it is paid. All vacation has to be used before fiscal
year end, so no accrual is required.
Accumulated sick pay benefits are available to all full-time employees to use in future years. However, upon
termination, the employees are not compensated for any unused sick days; therefore, no accruals or reserves
have been established.
Q. Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid expenses.
37
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 2: CASH AND CASH EQUIVALENTS
At June 30, 2011, the carrying amount of the Regional Office of Education #45’s government-wide and
fiduciary fund deposits were $854,904 and $1,186,584 respectively, and the bank balances were $975,018
and $1,277,887 respectively.
At June 30, 2011, $1,021,057 of the Regional Office of Education #45’s cash deposits was insured by the
Federal Deposit Insurance Corporation. Another $1,117,651 was collateralized by securities pledged by the
Regional Office of Education #45’s financial institution in the name of the Regional Office. The remaining
$114,197 was uncollateralized.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the Regional Office of Education’s
deposits may not be returned to it. The Regional Office of Education #45 does not have a deposit policy for
custodial credit risk but follows the Public Funds Investment Act (30 ILCS 235/2 and 6), and Section 8-7 of
the School Code.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. The Regional Office of Education #45 does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to fair value losses arising from increasing
interest rates.
Credit Risk
The Regional Office of Education #45 is allowed to invest in securities as authorized by Sections 2 and 6 of
the Public Funds Investment Act (30 ILCS 235/2 and 6), and Section 8-7 of the School Code. The Regional
Office of Education #45 has no investment policy that would further limit its investment choices. As of
June 30, 2011 the Regional Office of Education #45 was in compliance with these guidelines.
NOTE 3: DEFINED BENEFIT PENSION PLAN
Plan Description. The Regional Office of Education #45’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 #45’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.
38
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 3: DEFINED BENEFIT PENSION PLAN (CONCLUDED)
Funding Policy. As set by statute, the Regional Office of Education #45’s Regular plan members are
required to contribute 4.50% 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 12.13% of annual covered payroll.
The employer annual required contribution rate for calendar year 2010 was 19.47%. The Regional Office of
Education #45 also contributes for disability benefits, death benefits and supplemental retirement benefits,
all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the
IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute.
Annual Pension Cost. For calendar year ending December 31, 2010, the Regional Office of Education
#45’s actual contributions for pension cost for the Regular plan were $49,269. Its required contribution for
calendar year 2010 was $79,082.
THREE YEAR TREND INFORMATION
Actuarial
Valuation
Date
Annual
Pension
Cost (APC)
Percentage
of APC
Contributed
Net
Pension
Obligation
12/31/10 $ 79,082 62% $ 29,813
12/31/09 44,636 100% 0
12/31/08 40,182 100% 0
The required contribution for 2010 was determined as part of the December 31, 2008, actuarial valuation
using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2008, included
a) 7.5% 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 employer Regular plan assets was determined using
techniques that spread the effects of short-term volatility in the market value of investments over a five-year
period with a 20% corridor between the actuarial and market value of assets. The Regional Office of
Education #45’s Regular plan’s unfunded actuarial accrued liability is being amortized as a level percentage
of projected payroll on an open 10 year basis.
Funded Status and Funding Progress. As of December 31, 2010, the most recent actuarial valuation date,
the Regular plan was 62.77% funded. The actuarial accrued liability for benefits was $1,374,834 and the
actuarial value of assets was $862,947, resulting in an underfunded actuarial accrued liability (UAAL) of
$511,887. The covered payroll for 2010 (annual payroll of active employees covered by the plan) was
$406,172 and the ratio of the UAAL to the covered payroll was 126%.
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.
39
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 4: TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
The Regional Office of Education #45 participates in the Teachers’ Retirement System of the State of
Illinois (TRS). TRS is a cost-sharing multiple-employer defined benefit pension plan that was created by the
Illinois legislature for the benefit of Illinois public school teachers employed outside the city of Chicago.
The Illinois Pension Code outlines the benefit provisions of TRS, and amendments to the plan can be made
only by legislative action with the Governor's approval. The State of Illinois maintains the primary
responsibility for funding the plan, but contributions from participating employers and members are also
required. The TRS Board of Trustees is responsible for the System's administration.
TRS members include all active nonannuitants 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% 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% 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
#45’s TRS-covered employees.
 On behalf contributions. The State of Illinois makes employer pension contributions on behalf of the
Regional Office of Education #45. For the year ended June 30, 2011, the State of Illinois contributions
were based on 23.10% of creditable earnings not paid from federal funds, and the Regional Office of
Education #45 recognized revenue and expenditures of $84,286 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%
($95,049) and 17.08% ($35,510), respectively.
The Regional Office of Education #45 makes other types of employer contributions directly to TRS.
 2.2 formula contributions. Employers contribute 0.58% 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 $1,054.
Contributions for the years ending June 30, 2010, and June 30, 2009, were $1,295 and $1,206,
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 #45, there is a statutory requirement for
the Regional Office of Education #45 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% 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% of salaries paid from federal
40
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 4: TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (CONCLUDED)
and special trust funds, respectively. For the year ended June 30, 2011, salaries totaling $67,084 were
paid from federal and special trust funds that required employer contributions of $15,496. For the years
ended June 30, 2010 and June 30, 2009, required Regional Office of Education #45 contributions were
$19,568 and $10,756 respectively.
 Early retirement option. The Regional Office of Education #45 is also required to make one-time
employer contributions to TRS for members retiring under the early retirement option (ERO). The
payments vary depending on the age and salary of the member.
The maximum employer ERO contribution is 117.5% and applies when the member is age 55 at
retirement.
For the year ended June 30, 2011, the Regional Office of Education #45 paid $0 to TRS for employer
contributions under the ERO program. For the years ended June 30, 2010 and June 30, 2009, the
Regional Office of Education #45 paid $0 and $2,341 in employer ERO contributions, respectively.
 Salary increases over 6 percent and excess sick leave. If the Regional Office of Education #45 grants
salary increases over 6% and those salaries are used to calculate a retiree’s final average salary, the
Regional Office of Education #45 makes a contribution to TRS. The contribution will cover the
difference in actuarial cost of the benefit based on actual salary increases and the benefit based on salary
increases of up to 6%. For the year ended June 30, 2011, the Regional Office of Education #45 paid $0
to TRS for employer contributions due on salary increases in excess of 6%. For the years ended June
30, 2010 and June 30, 2009, the Regional Office of Education #45 paid $299 and $0, respectively to
TRS for employer contributions due on salary increases in excess of 6%.
If the Regional Office of Education #45 grants sick leave days in excess of the normal annual allotment
and those days are used as TRS service credit, Regional Office of Education #45 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% 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 #45 paid no TRS contributions 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 #45 paid no employer contributions granted for sick leave
days.
Further information on TRS. TRS financial information, an explanation of TRS benefits, and descriptions
of member, employer and State funding requirements can be found in the TRS Comprehensive Annual
Financial Report for the year ended June 30, 2010. The report for the year ended June 30, 2011, is expected
to be available in late 2011. The reports may be obtained by writing to the Teacher's Retirement System of
the State of Illinois, P.O. Box 19253, 2815 West Washington Street, Springfield, Illinois 62794-9253. The
most current report is also available on the TRS Web site at http://trs.illinois.gov.
41
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 5: OTHER POSTEMPLOYEMENT COMMITMENTS
A. Teacher Health Insurance Security Fund
The Regional Office of Education #45 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 cost-sharing
parameters. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active
contributors to the TRS who are not employees of the state make a contribution to THIS Fund.
The percentage of employer required contributions in the future will be determined by the director of
Healthcare and Family Services and will not exceed 105% 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 of Education #45. State contributions are intended to match
contributions to the THIS Fund from active members which were 0.88% of pay during the year ended June
30, 2011. State of Illinois contributions were $1,599 and the Regional Office of Education #45 recognized
revenue and expenditures of this amount during the year. State contributions intended to match active
member contributions during the year ended June 30, 2010 were 0.84% of pay. State contributions on
behalf of the Regional Office of Education #45’s employees were $1,876.
Had the Regional Office of Education #45 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% of pay or $1,746.
Employer contributions to THIS Fund. The Regional Office of Education #45 also makes contributions
to THIS Fund. The Regional Office of Education #45 contribution was 0.66% during the year ended June
30, 2011, and 0.63% during the years ended June 30, 2010 and 2009. For the year ended June 30, 2011, the
Regional Office of Education #45 paid $1,199 to the THIS Fund. For the years ended June 30, 2010 and
2009, the Regional Office of Education #45 paid $1,407 and $1,310 to the THIS Fund, respectively, which
was 100% 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.
42
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 5: OTHER POSTEMPLOYEMENT COMMITMENTS (CONCLUDED)
B. Egyptian Area Schools Employee Benefit Trust
Plan Description. The Regional Office of Education #45 contributes to the Egyptian Area Schools
Employee Benefit Trust (the “Trust”), a cost-sharing multiple-employer defined benefit health care plan
administered by the Board of Managers of the Trust. The Trust provides medical benefits to active and
retired employees of approximately 160 participating employers. The Trust issues a publicly available
financial report that includes financial statements and required supplementary information for the Trust. A
copy of the report may be obtained by writing to the Egyptian Area Schools Employee Benefit Trust, c/o
Meritain Health, 13 Executive Drive, Suite 19, Fairview Heights, IL 62208, or by calling Meritain Health at
(866) 588-2431, Option 3 x 6105. The report is also posted on the Trust’s website at www.egtrust.org.
Funding Policy. The Trust Agreement establishing the Trust provides that contribution rates are established
and may be modified by the Board of Managers of the Trust. Contribution rates are normally adjusted as of
September 1 each year. As of June 30, 2011, participating employers were contractually required to
contribute at the following rates for active and retired employees and dependents.
Platinum
Plan
Gold
Plan
Silver
Plan
Bronze
Plan
Employee (Retiree) $536 $484 $418 $356
Employee + spouse $1,106 $998 $866 $732
Employee + child(ren) $1,068 $963 $835 $719
Family $1,191 $1,073 $932 $791
Participating employers may require employees and/or retirees to pay some or all of the required
contributions to the employers, but the employer has the legal obligation to pay contributions to the Trust.
The Regional Office of Education #45 requires retirees to pay 100% of the contribution for the coverage for
retirees and their dependents.
The Board of Mangers of the Trust sets the employer contribution rates each year based on an actuarial
valuation. The Trust’s actuary has determined that as of June 30, 2009 the Trust had no Unfunded Actuarial
Accrued Liability for Other Post Employment Benefits (OPEB) and is not expected to have an Unfunded
Actuarial Accrued Liability as of June 30, 2011. The actuary has further determined that current
contribution rates exceed the Annual Required Contribution (ARC) determined in accordance with the
parameters of GASB Statement 45. The Regional Office’s contributions to the Trust for the years ending
June 30, 2011, June 30, 2010 and June 30, 2009, were $69,104, $55,517 and $56,630, respectively, which
equaled the contractually required contributions each year.
43
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 6: INTERFUND RECEIVABLES AND PAYABLES
Interfund due to / from other fund balances at June 30, 2011 consist of the following individual due to / from
other funds in the governmental fund Balance Sheet. These balances were eliminated in the government-wide
Statement of Net Assets.
Fund Due From Due to
General Fund
Office Account-Chester Office $ 31,212 $ -
Office Account-Waterloo Office 64,859 -
General State Aid 30,999 -
Education Fund
Chester Office
Adult Education-Public Assistance - 1,609
Adult Education-State Basic - 28,160
Adult Education-State Performance - 1,443
Regional Safe Schools - 30,999
Waterloo Office
ARRA-Title I-School Improvement and Accountability - 5,504
ROE/ISC Operations - 26,866
Beginning Teacher Induction Pilot Program (FY2011) - 4,198
Truants Alternative Optional Education - 28,291
$ 127,070 $ 127,070
NOTE 7: DUE TO/DUE FROM OTHER GOVERNMENTAL UNITS
The Regional Office of Education #45’s General Fund, Education Fund, Nonmajor Special Revenue Fund,
Proprietary Fund and Agency Fund, have funds due to and due from various other governmental units which
consist of the following:
Due from Other Governments:
General Fund - Chester Office Account - Local Governments $ 240
General Fund - Waterloo Office Account - Local
Governments
1,585
General Fund - General State Aid - Local Governments 2,025
Special Revenue Fund – Education Fund
Illinois State Board of Education
Illinois Community College Board
95,778
31,212
Nonmajor Special Revenue Fund - General Education
Development Fund - Local Governments
70
Proprietary Fund - Registration Fund - Local Governments 31,959
Fiduciary Fund - Distributive Fund
Illinois State Board of Education 1,114,728
Fiduciary Fund - Human Services Educational/Vocational
Project Funds - Illinois State Board of Education
334,578
Total $ 1,612,175
44
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 7: DUE TO/DUE FROM OTHER GOVERNMENTAL UNITS (CONCLUDED)
Due to Other Governments:
Proprietary Fund - Registration Fund - Lindenwood
University
$ 7,020
Fiduciary Fund - Distributive Fund
Local School Districts and Other Entities
1,114,728
Fiduciary Fund - Human Services Educational/Vocational
Project Funds - Local School Districts and Other Entities
1,521,162
Total $ 2,642,910
NOTE 8: CAPITAL ASSETS
Governmental Activities
Capital asset activity for fiscal year 2011 was as follows:
Balance Balance
July 1, 2010 Additions Deletions June 30, 2011
Governmental Funds
Total Capital Assets $ 2 21,306 $ 3,591 $ 28,931 $ 195,966
Less: Accumulated Depreciation 1 54,613 14,933 28,931 140,615
Governmental Funds
Investment in Capital Assets, Net $ 6 6,693 $ (11,342) $ - $ 55,351
Business-Type Activities
Balance Balance
July 1, 2010 Additions Deletions June 30, 2011
Business-type Activities
Total Capital Assets $ 1,441 $ - $ - $ 1,441
Less: Accumulated Depreciation 216 2 88 - 504
Business-type Activities
Investment in Capital Assets, Net $ 1,225 $ (288) $ - $ 937
Capital assets are depreciated using the straight-line method over the estimated useful lives of the assets.
Depreciation expense of $14,933 and $288 was charged to the governmental activities and business-type
activities, respectively, on the government-wide Statement of Activities for the year ended June 30, 2011.
Investment in capital assets is the component of net assets that reports capital assets net of accumulated
depreciation.
45
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 9: DISTRIBUTIVE FUND INTEREST
A written agreement between the Regional Office of Education #45’s school boards, which receive funds
through the Regional Office of Education #45, provides for the retention of interest earned on the State
Distributive Fund checking account by the Regional Superintendent to be used for the benefit of all of the
districts in the region. During the year the distributive fund earned interest of $147. At June 30, 2011 all
accumulated interest had been distributed.
NOTE 10: RISK MANAGEMENT
The Regional Office of Education #45 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. Regional Office
of Education #45 has purchased commercial insurance to cover these risks. During the year ended June 30,
2011, there were no significant reductions in coverage. Also, there have been no settlement amounts which
have exceeded insurance coverage in the past three years.
NOTE 11: ON-BEHALF PAYMENTS
The State of Illinois pays the following salaries and benefits on behalf of Regional Office of Education #45:
Regional Superintendent Salary $ 96,435
Regional Superintendent Fringe Benefits 24,655
(Includes State paid insurance)
Assistant Regional Superintendent Salary 86,791
Assistant Regional Superintendent Fringe Benefits 24,094
(Includes State paid insurance)
TRS Pension Contributions 84,286
THIS Fund Contributions 1,599
Total $ 317,860
Salary and benefit data for the Regional Superintendent and Assistant Regional Superintendent was
calculated based on data provided by the Illinois State Board of Education.
These amounts have been recorded in the accompanying governmental fund financial statements as state
revenue and expenditures.
NOTE 12: TRANSFERS
There were no interfund transfers during fiscal year 2011.
46
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 13: OPERATING LEASES
Lease 1: On December 1, 2009 the Regional Office of Education #45 entered into a one year lease
agreement with Monroe County, IL for rental of 107 East Mill Street, Waterloo (Waterloo Regional Office
building) beginning December 1, 2009 and terminating November 30, 2010. The Regional Office of
Education #45 renewed the lease starting December 1, 2010 and terminating November 30, 2011. The lease
is payable in monthly installments of $1,800. Lease expense for the office building for fiscal year 2011 was
$21,600.
Lease 2: On August 8, 2006 the Regional Office of Education #45 entered into a lease agreement with
Pitney Bowes for a postage meter held at the Chester office for 4 years beginning October 1, 2006 through
September 30, 2010. The lease is payable in quarterly payments of $155 of which approximately 14 percent
is reimbursed by another governmental entity. Total lease expense for fiscal year 2011 was $133.
Lease 3: On June 21, 2010 the Regional Office of Education #45 entered into a lease agreement with St.
Patrick Catholic Church of Ruma, IL for rental of the building known as “brick school” for three years
beginning July 1, 2010 and terminating June 30, 2013. The lease is payable in monthly installments of $875
per month. Lease expense for the “brick school” for fiscal year 2011 was $10,500.
Lease 4: On August 7, 2007 the Regional Office of Education #45 entered into a lease agreement with CIT
Technology Financing Services Inc. for rental of a copier kept at the Red Brick School for 5 years beginning
September 1, 2007 and terminating August 31, 2012. The lease is payable in monthly installments of $205.
Lease expense for the copier for fiscal year 2011 was $2,460. This copier was replaced with the copier
described in Lease 8 below in November 2009 with the remaining payments being covered by the new
lessor.
Lease 5: On August 1, 1999 the Regional Office of Education #45 entered into a month-to-month lease
agreement with Hillside Storage Rentals for rental of a storage stall in Chester. The lease is payable on a
monthly basis with a monthly rental fee of $40. Rent expense for the storage unit for fiscal year 2011 was
$480.
Lease 6: On August 18, 2007 the Regional Office of Education #45 entered into a lease agreement with
Pitney Bowes for 5 years and 3 months for a postage meter held at the Waterloo Office beginning September
1, 2007 through December 30, 2012. The lease is payable in quarterly payments of $177. The lease expense
for fiscal year 2011 was $708.
Lease 7: On October 21, 2009, the Regional Office of Education #45 entered into a lease agreement with
Toshiba Financial Services for rental of a copier kept at the Waterloo office building for 5 years and 3
months beginning with December 1, 2009 and terminating February 28, 2015. The lease is payable in
monthly installments of $257. Lease expense for the copier for fiscal year 2011 was $3,084.
Lease 8: On October 21, 2009, the Regional Office of Education #45 entered into a lease agreement with
Toshiba Financial Services for rental of a copier kept at the Red Brick School for 5 years and 3 months
beginning with December 1, 2009 and terminating February 28, 2015. The lease is payable in monthly
installments of $248. Lease expense for the copier for fiscal year 2011 was $2,976.
47
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 13: OPERATING LEASES (CONCLUDED)
Lease 9: On October 21, 2009, the Regional Office of Education #45 entered into a lease agreement with
Toshiba Financial Services for rental of a copier kept at the Chester office building for 5 years and 3 months
beginning with December 1, 2009 and terminating February 28, 2015. The lease is payable in monthly
installments of $214. Lease expense for the copier for fiscal year 2011 was $2,568.
The Regional Office of Education #45’s future minimum lease payments based on the leases detailed above
are as follows:
Fiscal Year
2012 $ 28,836
2013 19,482
2014 8,628
2015 5,752
$ 62,698
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 over expend appropriations during the year are required to be disclosed.
The following funds/fund accounts had deficit fund balances at June 30, 2011:
Education Fund
Adult Education - Public Assistance $ 1,279
Adult Education - State Basic $ 24,827
ROE/ISC Operations $ 3,266
Truants Alternative Optional Education $ 4,291
NOTE 15: RECLASSIFICATION
As a result of implementing GASB Statement No. 54, Fund Balance Reporting and Governmental Fund
Type Definitions, at June 30, 2011, General State Aid (GSA) funding has been reclassified from the
Education Fund to the General Fund and the ROE/ISC Operations grant has been reclassified from the
General Fund to the Education Fund.
The Regional Office of Education #45 receives GSA from the Illinois State Board of Education based on
attendance in the Regional Safe School. This funding supports the general operations of the Regional Safe
School program, and the Regional Office has historically reported this funding in the Education fund with
the Regional Safe School grant funding. However, GSA does not meet the committed or restricted criteria
set forth in GASB 54 for special revenue funds. The ROE/ISC 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.
48
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 15: RECLASSIFICATION (CONCLUDED)
Following is the effect of these reclassifications on the beginning balance fund balances for the General
Fund and the Education Fund:
General Fund
Fund Balance, July 1, 2010 $ 329,788
Effect of reclassifying General State Aid 193,086
Effect of reclassifying ROE/ISC Operations grant -
Fund Balance, July 1, 2010, Restated $ 522,874
Education Fund
Fund Balance, July 1, 2010 $ 180,350
Effect of reclassifying General State Aid (193,086)
Effect of reclassifying ROE/ISC Operations grant -
Fund Balance, July 1, 2010, Restated $ (12,736)
NOTE 16: SUBSEQUENT EVENT
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.
49
REQUIRED SUPPLEMENTARY INFORMATION
(Other than Management’s Discussion and Analysis)
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOLPH COUNTIES
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF FUNDING PROGRESS
June 30, 2011
UNAUDITED
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets - Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) ( (b-a)/c)
12/31/10 $862,947 $1,374,834 $511,887 62.77% $406,172 126.03%
12/31/09 904,589 1,341,096 $436,507 67.45% $404,678 107.87%
12/31/08 839,535 1,231,312 391,777 68.18% 405,057 96.72%
On a market value basis, the actuarial value of assets as of December 31, 2010 is $941,085. On a market
basis, the funded ratio would be 68.45%.
50
OTHER SUPPLEMENTAL INFORMATION
Assets
Cash and cash equivalents $ 44,154 $ 152,728 $ 186,707 $ 53,863 $ 437,452
Due from other funds 31,212 64,859 30,999 - 127,070
Due from other governments 240 1,585 2,025 - 3,850
Prepaid expenses - 6,262 - - 6,262
Total Assets $ 75,606 $ 225,434 $ 219,731 $ 53,863 $ 574,634
Liabilities
Accounts payable $ - $ - $ 66 $ - $ 66
Accrued wages and benefits - 19,692 - - 19,692
Deferred revenue 3,548 - - - 3,548
Total Liabilities 3,548 19,692 66 - 23,306
Fund Balance
Nonspendable - 6,262 - - 6,262
Assigned - - 219,665 - 219,665
Unassigned 72,058 199,480 - 53,863 325,401
Total Fund Balances 72,058 205,742 219,665 53,863 551,328
Total Liabilities and Fund Balances $ 75,606 $ 225,434 $ 219,731 $ 53,863 $ 574,634
Chester Waterloo
State Aid
County
Account
Chester Waterloo Total
June 30, 2011
REGIONAL OFFICE OF EDUCATION #45
MONROE AND RANDOL