FY11-ROE21-Fin-Full

              STATE OF ILLINOIS
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
FINANCIAL AUDIT
(In Accordance with the Single Audit Act
and OMB Circular A-133)
For the Year Ended June 30,2011
Performed as Special Assistant Auditors
For the Auditor General, State of Illinois
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
TABLE OF CONTENTS
OFFICIALS ................................................................................................................. .
COMPLIANCE REPORT SUMMARY ...................................................................... .
FINANCIAL STATEMENT REPORT SUMMARY ................................................ ..
FINANCIAL SECTION
1
2
5
Independent Auditors' Report . . . . . . . . . . . . . . . . . .. . . . .. . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . 6
Independent Auditors' Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on
an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards..................................................... 8
Independent Auditors' Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Internal Control over Compliance in Accordance
with OMB Circular A-133 .......................................................................................... 10
Schedule of Findings and Questioned Costs................................................................. 12
Financial Statement Findings........................................................................................ 13
Federal Award Findings................................................................................................ 15
Corrective Action Plan for Current Year Audit Findings............................................. 16
Summary Schedule of Prior Audit Findings................................................................. 17
Management's Discussion and Analysis...................................................................... 18
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets.......................................................................................... 25
Statement of Activities............................................................................................ 26
Fund Financial Statements
Governmental Funds - Balance Sheet.................................................................... 27
Governmental Funds - Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets.......................................................................... 28
Governmental Funds - Statement of Revenues, Expenditures, and
Changes in Fund Balances .. .. .. .. .. .. .. .. .. .. .... .. .. .. .. .. .. . .. .. .. .. .. .. .. .. . .. .. . .. . .. . .. .. .. .. .. .. .. . 29
Governmental Funds - Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances to the Statement of Activities......................... 30
Proprietary Funds- Statement of Net Assets......................................................... 31
Proprietary Funds - Statement of Revenues, Expenses, and
Changes in Fund Net Assets............................................................................. 32
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
TABLE OF CONTENTS
BASIC FINANCIAL STATEMENTS- Continued
Proprietary Funds- Statement of Cash Flows........................................................ 33
Fiduciary Funds- Statement of Fiduciary Net Assets............................................ 34
Notes to Financial Statements................................................................................. 35
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund - Schedule of Funding Progress .. .. .. .. .. .. .. .. .. .. .. .. .. 66
Illinois Municipal Retirement Fund - Schedule of Employer Contributions . . . . . . . . . . . . . . . 67
Other Postemployment Benefit Plan- Schedule of Funding Progress...................... 68
Other Postemployment Benefit Plan- Schedule of Employer Contributions............. 69
SUPPLEMENTAL INFORMATION
General Fund:
Combining Schedule of Accounts ............ ...................... ....... ... ..... ...... ... ... ... ....... ... 70
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances .. .. . .. .... . .. .. .. .. .... .. .. .... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. .. .. . 71
Budgetary Comparison Schedules:
ECHO............................................................................................................ 72
Regional Safe Schools . . . . . . . . . . . . . .. . . . . . . . . .. .. . . . . .. . . . .. . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . 73
Education Fund:
Combining Schedule of Accounts.......................................................................... 74
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances .. .. .. .. .. .. . .. .. .. .. .... .. .. .. .. .. .. . .. .. .. .. .. .. .. .. .. .. .. .. . .. . .. .. .. .. .... . . 77
Budgetary Comparison Schedules:
Social/Emotional Standards . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Illinois Violence Prevention .. ............................................... ... ........ ... ..... ..... .. .. 81
Substance Abuse Prevention and Treatment Block Grant................................ 82
McKinney Education for Homeless Children................................................... 83
Truants Alternative Optional Education Program Training (T AOEP).. ........... 84
Title I Reading First Part B SEA (Reading First)............................................. 85
Title III Tech Prep............................................................................................. 86
Vocational Ed Tech Prep.................................................................................. 87
Gifted Education............................................................................................... 88
Partnership for College and Career Success................................................... 89
Title I ARRA School Improvement and Accountability. . . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 90
ROEIISC Operations...................................................................................... 91
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
TABLE OF CONTENTS
SUPPLEMENTAL INFORMATION- Continued
Nonmajor Special Revenue Funds:
Combining Balance Sheet....................................................................................... 92
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances........................................................................... 93
Institute Fund:
Combining Schedule of Accounts .. .. .. .. .. .. .... .. .. .. .. .. .. .. .. .. .. . .. .. .. . .. .. .. .. .. . .. .. . .. .. .. .. .. .. .. 94
Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balances................................................................................ 95
Fiduciary Funds:
Combining Statement of Fiduciary Net Assets....................................................... 96
Combining Statement of Changes in Assets and Liabilities................................... 97
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards............................................................... 98
Notes to the Schedule of Expenditures of Federal Awards.......................................... 99
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
OFFICIALS
Regional Superintendent R. Matthew Donkin
(Current and during audit period)
Assistant Regional Superintendent Kurt Endebrock
(During audit period)
Offices are located at:
202 West Main Street
Benton, IL 62812
200 West Jefferson
Marion, IL 62959
Franklin/Williamson Project ECHO
PO Box 238, 17428 Route 37
Johnston City, IL 62951
S.T.A.R. Quest Academy
PO Box 303, 17428 Route 37
Johnston City, IL 62951
1
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
COMPLIANCE REPORT
SUMMARY
The compliance testing performed in this audit was conducted in accordance with Government
Auditing Standards and in accordance with the Illinois State Auditing Act.
AUDITORS' REPORTS
The auditors' reports on compliance and on internal controls do not contain scope limitations,
disclaimers, or other significant nonstandard language.
SUMMARY OF AUDIT FINDINGS
Number of
Audit findings
Repeated audit findings
Prior recommendations implemented
or not repeated
This Audit
1
1
0
Details of audit findings are presented in a separate report section.
Prior Audit
1
1
1
An additional three matters which are less than a significant deficiency or material weakness but
more than inconsequential, have been reported in a Management Letter of Comments to the
Regional Superintendent. In prior years, these issues may have been included as immaterial
findings in the auditors' reports.
Item No.
11-01
SUMMARY OF FINDINGS AND QUESTIONED COSTS
FINDINGS (GOVERNMENT AUDITING STANDARDS)
Page
13
Description
Controls over financial statement
preparation
2
Finding Type
Material Weakness
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
None noted.
PRIOR AUDIT FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
None noted.
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
None noted.
3
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
EXIT CONFERENCE
The finding and recommendation appearing in this report were discussed with Regional Office
personnel at a formal exit teleconference on February 2, 2012. Attending were R. Matthew
Donkin, Regional Superintendent, Kurt Endebrock, Assistant Regional Superintendent, Johna
Schullian, Comptroller, and Mallory Howell, Accountant/Internal Control Officer, from the
Regional Office, Leslie McConnell, Senior Manager and Kelli Bruns, Manager from Sikich LLP,
and Kelly Mittelstaedt, Audit Manager, from the Office of the Auditor General. Responses to
the recommendations had previously been provided by R. Matthew Donkin, Regional
Superintendent in a letter on January 3, 2012.
4
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
FINANCIAL STATEMENT REPORT
SUMMARY
The audit of the accompanying basic financial statements of the Franklin/Williamson Counties
Regional Office of Education No. 21 was performed by Sikich LLP.
Based on their audit, the auditors expressed an unqualified opinion on the Franklin/Williamson
Counties Regional Office of Education No. 21's basic financial statements.
5
Certified Public Accountants & Business Advisors
~Sikich.
3201 West White Oaks Drive, Suite 102 • Springfield, IL 62704
INDEPENDENT AUDITORS' REPORT
Honorable William G. Holland
Auditor General
State of Illinois
Members of American Institute of
Certified Public Accountants
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 Franklin/Williamson Counties Regional
Office of Education No. 21, as of and for the year ended June 30, 2011, which collectively
comprise the Franklin/Williamson Counties Regional Office of Education No. 21's basic
financial statements as listed in the table of contents. These financial statements are the
responsibility of the Franklin/Williamson Counties Regional Office of Education No. 21's
management. Our responsibility is to express opinions on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Franklin/Williamson Counties
Regional Office of Education No. 21, 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 Regional Office of Education No. 21 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 Regional
Office of Education No. 21's governmental funds' assets or liabilities nor was there any effect to
the total amount of any of the Regional Office of Education No. 21's governmental fund
balances as of and for the year ended June 30, 2011.
6
In accordance with Government Auditing Standards, we have also issued a report dated
February 7, 2012 on our consideration of the Franklin/Williamson Counties Regional Office of
Education No. 21's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
The Management's Discussion and Analysis and other required supplementary information on
pages 18 through 24 and 66 through 69 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 Franklin/Williamson Counties Regional Office of Education No. 21's
basic financial statements. The supplemental information is presented for purposes of additional
analysis and is 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 ofManagement and Budget Circular A-133,Audits ofStates, 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, 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.
~LL~
Springfield, Illinois
February 7, 2012
7
~Sikich.
Certified Public Accountants & Business Advisors
Members of American Institute of
Certified Public Accountants
3201 West White Oaks Drive, Suite 102 • Springfield, IL 62704
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the financial statements
of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the Franklin/Williamson Counties Regional Office of Education
No. 21, as of and for the year ended June 30,2011, which collectively comprise the Franklin/
Williamson Counties Regional Office ofEducation No. 21's basic financial statements and have
issued our report thereon dated February 7, 2012. We conducted our audit in accordance with
auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of the Franklin/Williamson Counties Regional Office of Education No. 21 is
responsible for establishing and maintaining effective internal control over financial reporting.
In planning and performing our audit, we considered the Franklin/Williamson Counties Regional
Office of Education No. 21'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 Franklin/Williamson
Counties Regional Office of Education No. 21's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Franklin/Williamson
Counties Regional Office of Education No. 21'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 internal
control over financial reporting that might be significant deficiencies or material weaknesses and
therefore, there can be no assurance that all deficiencies, significant deficiencies, or material
weaknesses have been identified. However, as described in the accompanying Schedule of
Findings and Questioned Costs we identified a certain deficiency in internal control over
financial reporting that we consider to be a material weakness.
8
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the Franklin/Williamson Counties Regional Office of
Education No. 21'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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Franklin/Williamson Counties
Regional Office of Education No. 21's financial statements are free of material misstatement, we
performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit, and accordingly, we do not express such
an opinion. The results of our tests disclosed no instances of noncompliance or other matters
that are required to be reported under Government Auditing Standards.
We also noted certain matters that we reported to management of the Franklin/ Williamson
Counties Regional Office ofEducation No. 21 in a separate letter dated February 7, 2012.
The Franklin/Williamson Counties Regional Office of Education No. 21's response to the
fmding identified in our audit is described in the accompanying Schedule of Findings and
Questioned Costs. We did not audit the Franklin/Williamson Counties Regional Office of
Education No. 21'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, the Illinois State Board of Education, and 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.
Springfield, Illinois
February 7, 2012
9
~Sikich.
Certified Public Accountants & Business Advisors
Members of American Institute of
Certified Public Accountants
3201 West White Oaks Drive, Suite 102 • Springfield, IL 62704
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS
THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable William G. Holland
Auditor General
State of Illinois
Compliance
We have audited the Franklin/Williamson Counties Regional Office of Education No. 21's
compliance with the types of compliance requirements described in the OMB Circular A-133
Compliance Supplement that could have a direct and material effect on each of the Franklin/
Williamson Counties Regional Office of Education No. 21's major federal programs for the year
ended June 30,2011. The Franklin/Williamson Counties Regional Office of Education No. 21'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 Franklin/Williamson Counties Regional Office of Education No. 21's
management. Our responsibility is to express an opinion on the Franklin/Williamson Counties
Regional Office of Education No. 21's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the Franklin/Williamson
Counties Regional Office of Education No. 21's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal
determination of the Franklin/Williamson Counties Regional Office of Education No. 21's
compliance with those requirements.
In our opinion, the Franklin/Williamson Counties Regional Office of Education No. 21
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.
10
Internal Control Over Compliance
Management of the Franklin/Williamson Counties Regional Office of Education No. 21 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 Franklin/Williamson Counties Regional
Office of Education No. 21's internal control over compliance with the requirements that could
have a direct and material effect on a major federal program to determine the auditing procedures
for the purpose of expressing our opinion on compliance and to test and report on internal control
over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing
an opinion on the effectiveness of internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of the Franklin/Williamson Counties Regional Office of
Education No. 21'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, the Illinois State Board of Education, federal awarding agencies and pass-through
entities and is not intended to be and should not be used by anyone other than these specified
parties.
Springfield, Illinois
February 7, 2012
11
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
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:
Internal control over financial reporting:
Material weakness( es) identified?
Significant deficiency(ies) identified?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
Material weakness(es) identified?
Significant deficiency(ies) identified?
Type of auditor's report issued on compliance
for major programs:
Any audit findings disclosed that are required
to be reported in accordance with
Section .510(a) of Circular A-133?
Identification of major programs:
unqualified
_x_ yes
__ yes
__ yes
no
_x_ none noted
_x_no
__ yes _x_no
__ yes _x_no
unqualified
__ yes _x_no
CFDA Number(s) Name of Federal Program or Cluster
84.196A and 84.387A
84.010A and 84.389A
Education of Homeless Children and Youth Cluster
Title I Grants to Local Educational Agencies, Recovery Act
Dollar threshold used to distinguish
between Type A and Type B programs:
Auditee qualified as low-risk auditee?
12
$ 300,000
__ yes _x_no
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II- FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30,2011
FINDING 11-01 -Controls over financial statement preparation (Repeat of prior year finding
07-05, 08-03, 09-01, 10-01)
CRITERIA/SPECIFIC REQUIREMENT:
The Franklin/Williamson Counties Regional Office of Education No. 21 (Regional Office) is
required to maintain a system of controls over the preparation of financial statements in
accordance with generally accepted accounting principles (GAAP). Regional Office internal
controls over GAAP financial reporting should include adequately trained personnel with the
knowledge and expertise to prepare and/or thoroughly review GAAP based financial statements
to ensure that they are free of material misstatements and include all disclosures as required by
the Governmental Accounting Standards Board (GASB).
CONDITION:
The Regional Office does not have sufficient internal controls over the financial reporting
process. The Regional Office maintains their accounting records on the cash basis of accounting
during the fiscal year and posts year end accrual entries for audit purposes. While the Regional
Office maintains controls over the processing of most accounting transactions, there are not
sufficient controls over the preparation of the GAAP based financial statements for management
or employees in the normal course of performing their assigned functions to prevent or detect
financial statement misstatements and disclosure omissions in a timely manner. For example,
auditors, in their review of the Regional Office's accounting records, noted adjustments were
required to present financial statements in accordance with generally accepted accounting
principles.
EFFECT:
Management or employees in the normal course of performing their assigned functions may not
prevent or detect financial statement misstatements and disclosure omissions in a timely manner.
CAUSE:
According to ROE officials, with the wide range of accounting issues the Office deals with,
accounting personnel have not obtained necessary training to become proficient in the
preparation and review of GAAP based financial statements and to ensure inclusion of all
disclosures as required by the Governmental Accounting Standards Board (GASB).
13
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II- FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30, 2011
FINDING 11-01- Controls over fmancial statement preparation (Repeat of prior year finding
07-05, 08-03, 09-01, 10-01)- Continued
RECOMMENDATION:
As part of its internal control over the preparation of financial statements, including disclosures,
the Regional Office should implement a comprehensive preparation and/or review procedure to
ensure that the financial statements, including disclosures, are complete and accurate. Such
procedures should be performed by an individual(s) possessing a thorough understanding of
applicable generally accepted accounting principles, GASB pronouncements, and knowledge of
the Regional Office's activities and operations.
MANAGEMENT'S RESPONSE:
In its continuous effort to maintain controls over financial statement preparation, the ROE will
follow it's hiring of qualified personnel with the pursuit of continued training opportunities to
improve its skills and efforts in meeting the requirements.
14
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION III- FEDERAL A WARD FINDINGS
For the Year Ended June 30, 2011
INSTANCES OF NON COMPLIANCE:
None noted.
SIGNIFICANT DEFICIENCIES:
None noted.
15
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS
For the Year Ended June 30, 2011
Corrective Action Plan
FINDING 11-01 -Controls over fmancial statement preparation (Repeat of prior year finding
07-05, 08-03, 09-01 and 10-01)
CONDITION:
The Regional Office does not have sufficient internal controls over the financial reporting
process. The Regional Office maintains their accounting records on the cash basis of accounting
during the fiscal year and posts year end accrual entries for audit purposes. While the Regional
Office maintains controls over the processing of most accounting transactions, there are not
sufficient controls over the preparation of the GAAP based financial statements for management
or employees in the normal course of performing their assigned functions to prevent or detect
financial statement misstatements and disclosure omissions in a timely manner. For example,
auditors, in their review of the Regional Office's accounting records, noted adjustments were
required to present financial statements in accordance with generally accepted accounting
principles.
PLAN:
The ROE will continue searching for in-service and training opportunities in the broad range of
its functions it conducts as it continues to further its education in the requirements of meeting
this GASB standard.
ANTICIPATED DATE OF COMPLETION:
Implementation will be on-going throughout fiscal year 2012.
CONTACT PERSON:
R. Matthew Donkin, Regional Superintendent
16
Finding
No.
10-01
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Condition Current Status
Controls over financial statement preparation Repeated
17
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Franklin/Williamson Counties Regional Office of Education No. 2I (Regional Office) provides
this Management's Discussion and Analysis of its financial statements. This narrative overview
and analysis of the financial activities is for the fiscal year ended June 30, 20Il. We encourage
readers to consider this information in conjunction with the Regional Office's financial
statements, which follow.
This report will include past year financial activity, along with fiscal year 20II activity, making
comparisons of the financial position and results of operations more meaningful.
2011 FINANCIAL IDGHLIGHTS
In 20II, funds received for Project ECHO and STAR Quest Academy were considered General
Funds instead of Education Funds as they had been in the past. That is because the funds for
these two programs are primarily General State Aid revenues which can be used to support the
entire educational program. Therefore, this alteration created a large difference between
revenues, expenditures, and fund balances in the General Fund for Fiscal Years 20 I 0 and 20 II.
The General Fund balance was $I,OI7,438 in Fiscal Year 20Il. General Fund revenues were
$I,4I8,957 (excluding on-behalf payments). There was a general decrease from our State,
Local, and Federal sources from 20IO. General Fund expenditures were $I,322,363 (excluding
on-behalf payments) which in general decreased from 20 I 0, mainly in purchased services and
salary expense.
USING TIDS ANNUAL REPORT
The annual report consists of a series of financial statements and other information, as follows:
• Management's Discussion and Analysis introduces the basic financial statements and
provides an analytical overview of the Regional Office's financial activities.
• The Government-wide Financial Statements consist of a Statement of Net Assets and a
Statement of Activities. These provide information about the activities of the Regional
Office as a whole and present an overall view of the Regional Office's finances.
• The fund financial statements tell how governmental services were financed in the short
term as well as what remains for future spending. Fund financial statements report the
Regional Office's operations in more detail than the government-wide statements by
providing information about the most significant funds.
• Notes to the Financial Statements provide additional information that is essential to a full
understanding of the data provided in the basic financial statements.
I8
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
• Supplemental Information further explains and supports the financial statements with a
comparison of the Regional Office's detailed information for each category of funds and
also provides detailed information about the non-major funds.
Reporting the Franklin/Williamson Counties Regional Office of Education as a Whole
The Statement of Net Assets and the Statement of Activities
The government-wide statements report information about the Regional Office as a whole using
accounting methods similar to those used by private-sector companies. The Statement of Net
Assets includes all of the Regional Office assets and liabilities. All of the current year revenues
and expenses are accounted for in the Statement of Activities regardless of when cash is received
or paid.
The two government-wide statements report the Regional Office's net assets and how they have
changed. Net assets -the difference between the assets and liabilities - are one way to measure
the Regional Office's financial health or position.
• Over time, increases or decreases in the net assets can be an indicator of whether
financial position is improving or deteriorating, respectively.
• To assess the Regional Office's overall health, additional non-financial factors, such
as new laws, rules, regulations, and actions by officials at the State level need to be
considered.
Fund Financial Statements
The fund financial statements provide detailed information about the Regional Office's funds,
focusing on its most significant or "major" funds. Funds are accounting devices which allow the
tracking of specific sources of funding and spending on particular programs. Some funds are
required by State law. The Regional Office established other funds to control and manage
money for particular purposes.
19
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The Office has three kinds of fund classifications:
1) Governmental funds account for a majority of the Regional Office's services.
These focus on how cash and other financial assets that can be readily converted to
cash flow in and out and the balances left at year-end that are available for
spending. Consequently, the governmental fund statements provide a detailed
short-term view that helps determine whether there are more or fewer resources
that can be spent in the near future to finance the Regional Office's programs. The
Regional Office's governmental funds include: the General Fund and the Special
Revenue Funds.
The governmental fund's required financial statements include a Balance Sheet and
a Statement of Revenues, Expenditures and Changes in Fund Balances.
2) Proprietary funds account for services for which the Regional Office charges fees
under a cost-reimbursement method. These fees cover the costs of certain services
it provides.
The proprietary fund's required financial statements include a Statement ofNet
Assets, a Statement of Revenues, Expenses and Changes in Fund Net Assets, and a
Statement of Cash Flows.
3) Fiduciary funds account for services for which the Regional Office acts as fiscal
agent for individuals and private or governmental organizations.
The fiduciary funds required financial statements include a Statement of Fiduciary
Net Assets.
A summary reconciliation between the government-wide financial statements and the fund
financial statements are included after each fund financial statement.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of financial position. The
Regional Office's net assets at the end of fiscal year 2010 totaled $1,156,544. At the end of
fiscal year 2011, the net assets were $1 ,244, 198. The analysis that follows provides a summary
of the Regional Office's net assets at June 30, 2011 and 2010.
20
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
CONDENSED STATEMENT OF NET ASSETS
June 30, 2011 and 2010
Governmental
Activities
Business-type
Activities Total
2011 2010 2011 2010 2011 2010
ASSETS
Current assets
Capital assets, net of
depreciation
$1,240,270 $1,250,958 $
TOTAL ASSETS
LIABILITIES
Current liabilities
Noncurrent liabilities
TOTAL LIABILITIES
NET ASSETS
Invested in capital
assets, net of related
debt
Restricted for educational
purposes
Unrestricted
163,586 147,702
1,403,856 1,398,660
152,190
7,468
159,658
155,929
90,552
997,717
234,459
7 657
242,116
134,598
25,559
996,387
- $ - $1,240,270 $1,250,958
163,586 147,702
1,403,856 1,398,660
152,190
7,468
159,658
155,959
90,552
997,717
234,459
7 657
242,116
134,598
25,559
996,387
TOTAL NET ASSETS $1.244.198 $1.156.544 ~$ ==- ~$ ==- $1.244.198 $1.156.544
The Regional Office's net assets increased by $87,654 from Fiscal Year 2010 to Fiscal Year
2011. This increase occurred as a result of a decrease in salaries and payments to other
governmental units expenses and an increase in capital assets placed in service during Fiscal
Year 2011.
21
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The following analysis shows the changes in net assets for the years ended June 30, 2011 and
2010.
Revenues:
Program revenues:
CHANGES IN NET ASSETS
For the Years Ended June 30, 2011 and 2010
Governmental
Activities
2011 2010
Business-type
Activities
2011 2010
Total
2011 2010
Charges for services $ 72,034 $ 114,130 $ 128,273 $ 130,971 $ 200,307 $ 245,101
Operating grants &
contributions 2.428.238 2.421.921 2.428.238 2.421.921
Total Program revenues 2.500.272 2,536.051 128,273 130 971 2.628,545 2.667.022
General revenues:
Local sources
On-behalf payments
Investment income
Loss on disposal of
capital assets
Total General revenues
Total Revenues
Expenses:
Salaries
Benefits
Purchased services
Supplies and materials
Depreciation
Other
Transfers-payments to
other governmental units
On-behalf payments
Total expenses
Excess before transfers
Transfers
Change in net assets
Net Assets - beginning
Net Assets- ending
104,947
663,698
7,115
245,795
651,903
10,354
----~(7~98=) _____ (""'8.,_81._.) - - - -
774.962
3.275.234
1,289,832
260,956
549,378
132,097
46,190
11,442
233,987
663,698
3.187,580
87,654
87,654
1.156,544
907 171
3.443,222
1,341,394
211,394
577,770
110,131
51,158
20,027
427,568
651,903
3,391,345
51,877
128.273
128,273
128.273
(1.145) - - - - - -
50,732
1.105,812
130 971
130,971
130 971
I 145
1,145
(I, 145)
104,947
663,698
7,115
245,795
651,903
10,354
----~(7~98=) -----=(8=8~1)
774.962
3.403.507
1,289,832
260,956
549,378
260,370
46,190
11,442
233,987
663.698
3.315.853
87,654
87,654
1,156,544
907 171
3.574.193
1,341,394
211,394
577,770
241,102
51,158
20,027
427,568
651,903
3,522.316
51,877
51,877
1,104.667
$ 1.244.198 $ 1.156.544 ~$====- !&$====- $ 1.244.198 $1.156.544
22
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Governmental Activities
Revenues for governmental activities were $3,275,234 and expenses were $3,187,580. The
Regional Office will be able to use some of the carryover balances to pay for the additional
services offered to and needed by local school districts in future fiscal years.
Business-Type Activities
Revenues and expenses for the Regional Office's business-type activities decreased from the
prior fiscal year due to a decrease in quantity of paper requested and purchased in fiscal year
2011 for the local school districts.
Financial Analysis of the Regional Office of Education No. 21 Funds
As previously noted, the Regional Office uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. The Regional Office's governmental funds
reported combined fund balances of$1,056,524 which is above last year's ending fund balance
of$914,580. The primary reason for the increases in combined fund balances in fiscal year 2011
were due to increases in General State Aid received for Project ECHO and Star Quest Academy
from the Illinois State Board of Education for the Fiscal Year 2011. The State Aid increased by
$214,494 from Fiscal Year 2010.
Governmental Fund Highlights
• The Regional Office had an increase in total grant funds received from the Illinois State
Board of Education at the end of Fiscal Year 2011. This increase was mainly attributable
to the ARRA- Title I School Improvement grant.
• In 2011 funds received for Project ECHO and Star Quest were considered General Funds
instead of Education Funds as they had been in the past. This creates a different
appearance of the financial statements.
Budgetary Highlights
The Regional Office annually adopts program budgets on a basis consistent with U.S. generally
accepted accounting principles. The Illinois State Board of Education reviews the proposed
budgets and either grants approval or returns them without approval with comments. Any
unapproved budget must be resubmitted to the Illinois State Board of Education for final
approval. The budgets may be amended during the year utilizing procedures prescribed by the
Illinois State Board of Education.
23
Capital Assets
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Capital Assets of the Regional Office include office equipment, computers, audio-visual
equipment, office furniture, and a building. The Regional Office maintains an inventory of
capital assets, which have been accumulated over time. The increase for fiscal year 2011 was a
result of several E-Instruction CPS Pad Systems being purchased as well as a Closed Circuit
Security Television System for ECHO and E-Printers that were placed in service during fiscal
year 2011. The Regional Office's ending capital asset balance for fiscal year 2011 is $163,586,
which is the total original cost of the capital assets less accumulated depreciation. More detailed
information about capital assets is available in Note 4 to the financial statements.
Economic Factors And Next Year's Budget
At the time these fmancial statements were prepared and audited, the Regional Office was aware
of several existing circumstances that could significantly affect its financial health in the future:
• The State of Illinois Foundation level remained constant at $6,119 per student
payable in 2011-2012.
• The interest rate on investments remains low and will impact interest earned.
• Several grants have had their funding levels reduced for the coming year.
• The number of students served by the Regional Office is expected to remain constant.
Contacting the Regional Office's Financial Management
This financial report is designed to provide the Regional Office's citizens, taxpayers, clients, and
other constituents with a general overview of its finances and to demonstrate the accountability
for the money it receives. If the reader has questions concerning this report or needs additional
financial information, please contact the Regional Superintendent of the Franklin/Williamson
Regional Office of Education No. 21 at 202 W. Main, Benton, IL 62812.
24
BASIC FINANCIAL STATEMENTS
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
STATEMENT OF NET ASSETS
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Accounts receivable
Due from Illinois State Board of Education
Due from other governments
Prepaid expense
Internal balances
Total current assets
NONCURRENT ASSETS
Capital assets, net of depreciation
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Due to other governments
Deferred revenue
Current portion of capital lease payable
Total current liabilities
NONCURRENT LIABILITIES
Capital lease payable, noncurrent portion
Net OPEB obligation
Total noncurrent liabilities
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Restricted for educational purposes
Unrestricted
TOTAL NET ASSETS
June 30, 2011
$
$
Governmental
Activities
816,436
22,153
181,880
138,020
42,277
39,504
1,240,270
163,586
1,403,856
128,548
11,507
10,945
1,190
152,190
6,467
1,001
7,468
159,658
155,929
90,552
997,717
1,244,198
Primary Government
Business-Type
Activities
$
39,504
(39,504)
$
The notes to the fmancial statements are an integral part of this statement.
25
Total
$ 816,436
22,153
181,880
177,524
42,277
1,240,270
163,586
1,403,856
128,548
11,507
10,945
1,190
152,190
6,467
1,001
7,468
159,658
155,929
90,552
997,717
$ 1,244,198
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
STATEMENT OF ACTIVITIES
For the Year Ended June 30,2011
Net (Expense) Revenue
and Changes in Net Assets
Pro~m Revenues Prima!:Y Government
Charges Operating Governmental Business-Type
FUNCTIONS/PROGRAMS Ex~enses for Services Grants Activities Activities Total
PRIMARY GOVERNMENT
Governmental Activities:
Instructional Services:
Salaries $ 1,289,832 $ 16,041 $ 1,286,632 $ 12,841 $ $ 12,841
Benefits 260,956 1,834 260,640 1,518 1,518
Purchased services 549,378 33,858 481,143 (34,377) (34,377)
Supplies and materials 132,097 8,927 161,521 38,351 38,351
Depreciation 46,190 (46,190) (46,190)
Other 11,442 11,374 (68) (68)
Transfers - payments to other governmental units 233,987 238,302 4,315 4,315
Administrative:
On-behalf payments 663,698 (663,698) ~663,698)
Total Governmental Activities 3,187,580 72,034 2,428,238 (687,308~ ~687,308)
N
0\
Business-type Activities:
Paper bid 128,273 128,273
Total Business-type Activities 128,273 128,273
Total Primary Government $ 3,315,853 $ 200,307 $ 2,428,238 (687,308) (687,308)
General Revenues:
Local sources 104,947 104,947
On-behalf payments 663,698 663,698
Investment income 7,115 7,115
Loss on disposal of
capital assets (798) (798)
Total General Revenues 774,962 774,962
Change in net assets 87,654 87,654
Net Assets - beginning 1,156,544 1,156,544
Net Assets- ending $ 1,244,198 $ $ 1,244,198
The notes to the financial statements are an integral part of this statement.
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
GOVERNMENTAL FUNDS
BALANCE SHEET
June 30, 2011
Nonmajor Total
General Education Special Revenue Governmental
Fund Fund Funds Funds
ASSETS
Cash and cash equivalents $ 719,465 $ 63,835 $ 33,136 $ 816,436
Accounts receivable 12,353 5,500 4,300 22,153
Due from Illinois State Board of Education 50,646 131,234 181,880
Due from other governments 45,524 89,II8 3,378 138,020
Due from other funds 338,488 338,488
Prepaid expense 40,803 1,474 42,277
TOTAL ASSETS $ 1,207,279 $ 289,687 $ 42,288 $ 1,539,254
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable $ Il4,847 $ I 1,286 $ 2,415 $ 128,548
Due to other governments 24 II,483 Il,507
Due to other funds 66,524 208,007 24,453 298,984
Deferred revenue 8,446 35,245 43,691
Total liabilities 189,841 266,021 26,868 482,730
FUND BALANCE (DEFICIT)
Nonspendable 40,803 1,474 42,277
Restricted 10,833 42,943 36,666 90,442
Assigned 783,602 5,912 789,514
Unassigned 182,200 (25,189) (22,720) 134,291
Total fund balance (deficit) 1,017,438 23,666 15,420 1,056,524
TOTAL LIABILITIES AND
FUND BALANCE $ 1,207,279 $ 289,687 $ 42,288 $ 1,539,254
The notes to the financial statements are an integral part of this statement.
27
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
GOVERNMENTAL FUNDS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
June 30, 2011
Total fund balances- governmental funds $ 1,056,524
Amounts reported for governmental activities in the Statement ofNet
Assets are different because:
Capital assets used in governmental activities are not
financial resources and therefore, are not reported in the funds.
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds.
Long-term liabilities are not due and payable in the current
period and, therefore, are not reported in the funds:
Capital lease payable
Net OPEB obligation
163,586
32,746
(7,657)
(1,001)
Net assets of governmental activities $ 1,244,198
The notes to the financial statements are an integral part of this statement.
28
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
For the Year Ended June 30,2011
Nonmajor Total
General Education Special Revenue Governmental
Fund Fund Funds Funds
REVENUES
Local sources $ 95,198 $ 9,749 $ 72,034 $ 176,981
State sources 1,205,594 405,695 779 1,612,068
Federal sources 111,050 779,740 890,790
Interest income 7,115 7,115
On-behalf payments 663,698 663,698
Total revenues 2,082,655 1,195,184 72,813 3,350,652
EXPENDITURES
Instructional services:
Salaries 761,585 509,340 17,906 1,288,831
Benefits 144,002 115,145 1,809 260,956
Purchased services 270,339 254,720 29,766 554,825
Supplies and materials 66,723 64,121 1,477 132,321
Other 3,208 8,234 11,442
Transfers- payments to other governmental units 66,000 167,987 233,987
On-behalf payments 663,698 663,698
Capital outlay 10,506 47,156 4,986 62,648
Total expenditures 1,986,061 I ,158,469 64,178 3,208,708
Revenues over (under) expenditures 96,594 36,715 8,635 141,944
Other financing sources (uses)
Transfers in 42,194 24,901 67,095
Transfers out {67,095) (67,095)
Total other financing sources (uses) (24,901) 24,901
Net change in fund balances 71,693 36,715 33,536 141,944
FUND BALANCE (DEFICIT),
BEGINNING OF YEAR, AS RECLASSIFIED 945,745 ( 13,049) (18,116) 914,580
FUND BALANCE, END OF YEAR $ I ,017,438 $ 23,666 $ I 5,420 $ 1,056,524
The notes to the financial statements are an integral part ofthis statement.
29
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
GOVERNMENTAL FUNDS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
For the Year Ended June 30,2011
Net change in fund balances
Amounts reported for governmental activities in the Statement of Activities
are different because:
Governmental funds report capital outlays as expenditures.
However, in the Statement of Activities the cost of those
assets is allocated over their estimated useful lives and
reported as depreciation expense.
Capital outlay
Depreciation expense
The net effect of various miscellaneous transactions involving
capital assets (i.e., sales, trade-ins, donations, and disposals)
is to increase/decrease net assets:
Disposals of capital assets
$ 62,872
(46,190)
Revenues in the statement of activities that do not provide current financial resources are not
reported in the funds.
Reduction of fund deferred revenue
The issuance of long-term debt (e.g. leases) provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the current financial resources
of governmental funds. Neither transaction, however, has any effect on net assets. The following is
the detail ofthe net effect of these differences in the treatment of long-term debt and related items:
Repayment of capital lease payable
The increase in OPEB obligation resulting from annual required contributions in excess of the
contributions do not require the use of current financial resources and, therefore, is not reported
as expenditures in the funds.
Change in net assets of governmental activities
The notes to the financial statements are an integral part of this statement.
30
$ 141,944
16,682
(798)
(74,620)
5,447
{1,001)
$ 87,654
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
PROPRIETARY FUNDS
Assets
Current assets
Due from other governments
Total current assets
Total Assets
Liabilities
Due to other funds
Total Liabilities
Net Assets
Unrestricted
STATEMENT OF NET ASSETS
June 30, 2011
$
$
Business-type
Activities
Enterprise Fund
Paper Bid
39,504
39,504
39,504
39,504
39,504
The notes to the financial statements are an integral part of this statement.
31
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
For the Year Ended June 30,2011
Operating revenues
Local sources
Operating expenses
Supplies and materials
Change in net assets
Net Assets, Beginning of year
Net Assets, End of year
$
$
Business-type
Activities
Enterprise Fund
Paper Bid
128,273
128,273
The notes to the financial statements are an integral part of this statement.
32
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
For the Year Ended June 30, 2011
Cash Flows from Operating Activities:
Receipts from customers
Payments to suppliers and providers of goods
and services
Net cash used for operating activities
Net change in cash and cash equivalents
Cash and cash equivalents- Beginning ofyear
. Cash and cash equivalents- End of year
Reconciliation of operating income (loss) to net cash
used for operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash
used for operating activities:
(Increase)/decrease in assets:
Due from other governments
Increase/( decrease) in liabilities:
Due to other funds
Net cash used for operating activities
$
$
$
$
Business-type
Activities
Enterprise Fund
Paper Bid
133,148
(133,148)
4,875
(4,875)
The notes to the financial statements are an integral part of this statement.
33
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
June 30, 2011
ASSETS
Cash and cash equivalents
Due from Illinois State Board of Education
Due from other governments
TOTAL ASSETS
LIABILITIES
Due to primary government
Due to other governments
TOTAL LIABILITIES
$
$
$
$
Agency
Funds
312
21,359
1,090,741
1,112,412
21,359
1,091,053
1,112,412
The notes to the financial statements are an integral part of this statement.
34
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Franklin/Williamson Counties Regional Office of
Education No. 21 (ROE) substantially comply with the rules prescribed by the Illinois
State Board of Education (ISBE). These accounting policies conform to generally
accepted accounting principles as prescribed by the Governmental Accounting Standards
Board (GASB). The following is a summary of the significant accounting policies.
A. Reporting Entity
The ROE operates under the School Code (Articles 5/3 and 5/3A of Illinois Compiled
Statutes, Chapter 105). The ROE encompasses Franklin and Williamson Counties.
The Regional Superintendent of Schools (Regional Superintendent) serves as chief
administrative officer of the ROE and is elected pursuant to Article 3, Illinois
Compiled Statutes, Chapter 105. The principal financial duty of the Regional
Superintendent is to receive and distribute monies due to school districts from general
state aid, state categorical grants, and various other sources.
The Regional Superintendent is charged with the responsibility for township fund
lands; registration of the names of applicants for scholarships to State controlled
universities; examinations and related duties; visitation of public schools; direction of
teachers and school officers; to serve as the official advisor and assistant of school
officers and teachers; to conduct teachers' institutes as well as to aid and encourage
the formation of other teachers meetings and assist in their management; evaluate the
schools in the region; examine evidence of indebtedness; file and keep 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 school districts on or before each
September 30; maintenance of a map and numbering of the Regional Office of
Education No. 21 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.
35
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
A. Reporting Entity - Continued
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 districts in the region, or see that no payments are
made unless the treasurer has filed or renewed appropriate bond and that the district
has certified publication of the annual financial report. The Regional Superintendent
is required to provide opinions and advice related to controversies under school law.
For the period ended June 30, 2011, the ROE applied for, received, and administered
numerous State and federal programs and grants in assistance and support of the
educational activities ofthe school districts in Regional Office ofEducation No. 21.
The ROE also acts as the administrative agent for the Franklin County Regional
Delivery System (a joint agreement). As administrative agent, the ROE is responsible
for the receipt and distribution of the System's funding, as well as all necessary
reporting requirements for the Illinois State Board of Education and other granting
agencies.
The ROE reporting entity includes all related organizations for which they exercise
oversight responsibility.
These are the only activities considered to be part of (controlled by or dependent on)
the ROE, as determined by the application of the criteria set forth in Governmental
Accounting Standards Board Statement No. 14, The Financial Reporting Entity. The
criteria for inclusion of an entity include, but are not limited to, legal standing, fiscal
dependency, imposition of will, and potential for financial benefit or burden.
The 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 ROE does not control the assets,
operations, or management of the districts or joint agreements. In addition, the ROE
is not aware of any entity which would exercise such oversight as to result in the ROE
being considered a component unit of the entity.
36
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
A. Reporting Entity - Continued
Based on this criteria, the expenditures paid through the funds of Franklin and
Williamson Counties, for operation of the ROE, are not included in the reporting
entity since it is the county boards that authorize, oversee, and control these
expenditures.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement ofNet Assets and the
Statement of Activities) report information on all of the non-fiduciary activities of the
primary government. The effect of interfund activity has been removed from these
statements. Governmental activities are supported by intergovernmental revenues
and are reported separate from business-type activities, which rely to a significant
extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use or directly benefit
from goods, services, or privileges provided by a given function or segment and 2)
grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Other items not properly included
among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds,
and fiduciary funds, even though the latter are excluded from the government-wide
financial statements. Major individual funds are reported as separate columns in the
fund financial statements. Nonmajor funds are aggregated and reported in a single
column.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of the related cash flows. Grants
and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
37
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation-
Continued
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current
period or soon enough thereafter to pay current liabilities. The ROE considers
revenues to be available if they are collected within 60 days of the end of the current
fiscal period. 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
generally are recorded when a liability is incurred, as under accrual accounting.
Revenues from local sources consist primarily of fees charged to school districts for
services rendered by the ROE. Miscellaneous revenues are recorded when received
in cash because they are generally not measurable until actually received. Grant
funds from the State of Illinois are considered to be earned to the extent of
expenditures made under the provisions of the grant. Investment earnings are
recorded as earned since they are measurable and available.
The proprietary fund type is accounted for on a flow of economic resources
measurement focus. With this measurement focus, all assets and liabilities associated
with the operation of this fund are included on the Statement ofNet Assets.
Proprietary fund type operating statements present increases (e.g., revenues) and
decreases (e.g., expenses) in net total assets. The accrual basis of accounting is
utilized by the proprietary fund type. Under this basis of accounting, revenues are
recognized when earned and expenses are recognized when the related liability is
incurred.
When both restricted and unrestricted resources are available for use, it is the ROE's
policy to use restricted resources first, then unrestricted resources as they are needed.
For unrestricted fund balances, assigned funds are used first, then unassigned, if any.
38
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation-
Continued
The ROE reports the following major governmental funds:
General Fund- The General Fund is used to account for resources traditionally
associated with government which are not required, legally or by sound financial
management, to be accounted for in another fund. The ROE's General Fund accounts
include the following:
• Computer Maintenance - Monies received from local districts for computer
maintenance and technical assistance.
• County Budget - Monies received from the Franklin and Williamson County
Boards to help support the day to day expenses of the ROE.
• Interest Allocation- Accumulated interest earned on ROE funds from the
Illinois Funds and local banks. The interest accumulated is to be allocated on
a monthly basis to funds having cash balances.
• General Operating- Used to accumulate miscellaneous receipts used to
support the day to day expenses of the ROE.
• Enterprise/Workshop- Used to account for revenues received from
workshops held by the ROE.
• Prevention Social Marketing - Monies received through donations for use in
marketing campaigns focused on issues related to student social issues.
• Regional Gifted - Gifted services range from student oriented programs like
the Gifted Olympiads to professional development services such as the Gifted
Program Coordinators' meeting.
• Williamson County Film Library - Funding for the film library is based on an
annual assessment fee from each school district in Williamson County. Funds
are used to cover salary and travel expenses for the media assistant
• Education Careers Heightened Opportunity (ECHO)- Used to account for
General State Aid monies received for the general operations of the alternative
school.
• Regional Safe Schools- Used to account for General State Aid monies
received for programs for disruptive students who are eligible for suspension
or expulsion.
Education Fund- The Education Fund is used to account for and report the proceeds
of specific revenue sources that are restricted by grant agreements or contracts to
expenditures for specified purposes supporting education enhancement programs.
The ROE's Education Fund accounts include the following:
39
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation-
Continued
• Social/Emotional Standards - Funds received to provide services to schools
who have received a Social/Emotional Learning Standards Grant. These
services include training for teacher teams, trainer fees, and workshop
materials.
• 21st Century Community Learning Centers - Local funds received to
administer the 21st Century Learning Center after school program.
• Family Violence- Registration fees from violence prevention workshops.
• Illinois Violence Prevention- Provides training costs and salary for a
representative of the Family Violence Coordinating Council to represent the
council at meetings in the nine county area of the 1st Circuit.
• Substance Abuse Prevention and Treatment Block Grant- The ROE is the
administrative agent for the Department of Human Services funded In Touch
program which supports prevention professionals trained to assist
communities and schools with the knowledge and skills for effective alcohol,
tobacco, and other drug prevention.
• McKinney Education for Homeless Children- This grant provides funds for
providing information to schools, community members and government
entities about the educational rights ofhomeless students.
• Truants Alternative Optional Education Program (TAOEP)- This program is
devoted to ensuring that each referred at-risk student will be provided with
individualized educational and supplemental services that meet the holistic
needs of students in pursuit of their education development. TAOEP offerings
include: identification of at-risk students and dropouts, truancy intervention
services, academic intervention and remediation, parental skills development,
and network with community agencies and businesses.
• Math Professional Development - Provides training for local math teachers
using the Materials for Teaching Teachers (M2T2) training program.
• System of Support- Grant monies in this fund are used to provide
professional development activities to schools that are on Illinois' Academic
Watch List. To be on the list, students in the buildings have not made
Adequate Yearly Progress for at least two years. The funding sources for this
grant are Title I, Title II, and State appropriated monies.
40
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS - Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation-
Continued
• Title I Reading First Part B SEA Funds (Reading First)- This program is
designed to provide professional development for teachers in schools
participating in the Reading First program.
• New Principal Mentoring Program- This program provides for the selection
and training of experienced principals to serve as mentors for new principals
and for the new principals' participation in the mentoring program designed
for them. Funds flow through the Illinois Principals Association from the
Illinois State Board of Education.
• Title III Tech Prep- Funding received through the Illinois Community
College Board to ensure that all students are college and career ready and
provided with the academic and technical competencies to transition from
secondary to postsecondary education in order to pursue high skill, high
demand, or high wage careers. The program will emphasize comprehensive
career preparation and provide a collaborative environment that engages and
retains students in learner-centered instruction.
• Vocational Ed Tech Prep- These funds are utilized to pay the salary of the
Partnerships for College and Career Success Director. Additional funds are to
be used for benefits, worker's compensation, supplies and materials, software,
and professional development.
• Gifted Education - This program provides workshops and other professional
development opportunities for teachers working in the area of gifted
education.
• Partnership for College and Career Success - Funds that provide professional
development connecting secondary and postsecondary educational elements
for high schools in Franklin, Williamson, Jefferson, and Hamilton counties, as
well as Pickneyville and Wayne City high schools with Rend Lake College.
• Education Jobs- Federal funds used to provide assistance to save or create
education jobs for the 2010-2011 school year. Jobs funded under this
program include those that provide educational and related services for early
childhood, elementary, and secondary education.
• Title I ARRA School Improvement and Accountability- Federal funds used
to work with first and second year schools in improvement status, to assist in
data analysis, and support the implementation interventions of effective
practices to improve student achievement.
• ROE/ISC Operations- Monies received from State sources to help support
the day to day operating expenses of the ROE.
41
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation-
Continued
Additionally, the ROE reports the following fund types:
Governmental
Special Revenue Funds - Special Revenue Funds are used to account for and report
the proceeds of specific revenue sources that are restricted to expenditure for
specified purposes other than debt service or capital projects. The ROE's nonmajor
Special Revenue Funds include the following:
• Bus Driver Permit- Experienced drivers must take a two-hour refresher
course annually, while all new drivers must take an eight-hour course in bus
driver safety and first aid, prescribed by the Illinois State Board of Education
and administered by the ROE.
• General Education Development (GED)- Illinois law requires the Regional
Superintendent of Schools of each county/counties to administer the GED test.
The GED tests are given once a month in each county.
• Institute- Used to account for examination, registration and renewal fees, and
to defray expenses incidental to teacher's institutes, workshops, and
professional meetings.
Proprietary
Proprietary funds account for activities whose costs are funded by fees and charges.
These fees and charges are paid by external users for goods or services. The ROE
utilizes the following proprietary fund:
• Paper Bid - This program is used to purchase paper in bulk for the schools in
order to reduce their costs.
Fiduciary
Agency Funds- Fiduciary funds account for assets held by the ROE in a trustee or
agency capacity. Agency funds are custodial in nature and do not involve
measurement of results of operations. The ROE utilizes the following agency funds:
42
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation-
Continued
• Franklin County Regional Delivery System (Joint Agreement)- The Franklin
County Regional Delivery System consists of six Franklin County high
schools whose students generate vocational credits which are reimbursed
through CTE grant, Agriculture Education and Perkins grants. The systems'
governing board consists of the six superintendents and the ROE
Superintendent who hires a system director, special population's coordinator,
and technical preparation director who oversees the compliance with the
grants and distribution of grant allocations.
• School Facility Occupation Tax- The Regional Office receives proceeds
generated through the school facility occupation tax. Within thirty days, the
Regional Superintendent must disburse those proceeds that it receives that are
collected by the Illinois Department of Revenue to each school district that
has territory located in the county in which the tax was collected. The
proceeds must be disbursed on an enrollment basis and allocated based upon
the number of each school district's resident pupils that reside within the
county collecting the tax divided by the total number of students for all school
districts within the county.
D. Budgetary Data
The grant budgets are submitted to grantor agencies for approval and funding;
however, no legal budget is required or adopted. A funding agreement is entered into
upon approval of the budget by the grantor. Any subsequent budget revisions must
be approved by the grantor. The following accounts prepare budgets:
Regional Safe Schools
ECHO
Social/Emotional Standards
Illinois Violence Prevention
Substance Abuse Prevention and
Treatment Block Grant
McKinney Education for Homeless
Children
43
TAOEP
Reading First
Title III Tech Prep
Vocational Ed Tech Prep
Gifted Education
Partnership for College and Career
Success
Title I ARRA School Improvement
and Accountability
ROE/ISC Operations
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
D. Budgetary Data - Continued
Budgets for the other funds of the ROE are not legally required and have not been
prepared. Accordingly, no actual to budget comparison is included in the basic
financial statements. The actual to budget comparisons are prepared on the modified
accrual basis of accounting.
E. Cash and Cash Equivalents
Cash consists of demand deposits. For purposes of the Statement of Cash Flows, the
ROE considers highly liquid investments (including restricted assets) with an original
maturity of three months or less when purchased to be cash equivalents.
F. Investments
Investments are stated at fair value using quoted market prices at June 30, 2011.
G. Due From Other Governments
Due from other governmental units and agencies is reported at gross with no
allowance for uncollectibles since management believes the amount of any
uncollectible accounts is immaterial.
H. Capital Assets
Capital assets, which include buildings and furniture and equipment, are reported in
the applicable governmental column in the government-wide financial statements.
General capital assets are not capitalized in the funds used to acquire or construct
them. Instead, capital acquisition and construction are reflected as expenditures in
governmental funds. All purchased capital assets are valued at cost where historical
records are available and at an estimated historical cost where no historical records
exist. Donated fixed assets are valued at their estimated fair market value on the date
received. The ROE records all capital items, which are individually greater than
$500, with a useful life of greater than one year, as capital assets.
The costs of normal maintenance and repairs that do not add to the value of the asset
or materially extend asset lives are not capitalized. Improvements are capitalized and
depreciated over the remaining useful lives of the related fixed assets, as applicable.
44
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
H. Capital Assets - Continued
Depreciation is computed using the straight-line method over the following estimated
useful lives:
Assets
Furniture and equipment
Buildings
I. Accrued Absences
Years
3-10
40
Compensated absences do not vest or accumulate and are recorded as expenditures
when paid.
J. Fund Equity
In the government-wide financial statements fund equity is displayed in three
components:
Invested in capital assets, net of related debt - Consists of capital assets, net of
accumulated depreciation and related debt.
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. None of the restricted net assets result from enabling legislation adopted
by the ROE.
Unrestricted net assets- All other net assets which do not meet the definition of
"restricted" or "invested in capital assets."
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- the portion of a Governmental Fund's fund balance that is not
available to be spent, either short term or long term, in either form or through legal
restrictions. The nonspendable fund balance reported is nonspendable in form for
prepaid expenses.
45
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
J. Fund Equity - Continued
Restricted -the portion of a Governmental Fund's fund balance that is subject to
external enforceable legal restrictions. The following accounts fund balances are
restricted by grant agreements or contracts: ECHO, Social/Emotional Standards,
System of Support, Bus Driver Permit, and Institute.
Committed- the portion of a Governmental Fund's fund balance with self-imposed
constraints or limitations that have been placed at the highest level of decision
making. There are no accounts presenting a committed fund balance.
Assigned- the portion of a Governmental Fund's fund balance to denote an intended
use of resources. The accounts presented with assigned fund balances are specified
for a particular purpose by the Regional Superintendent. The following accounts
comprise assigned fund balance:
Prevention Social Marketing - assigned for marketing campaigns relating to
student social issues
ECHO- assigned to operate, maintain, and support the functions related to
educational services for Project ECHO
Regional Safe Schools - assigned to operate, maintain, and support the
functions related to educational services for STAR Quest Academy Regional
Safe School Program
21st Century Community Learning Centers- assigned to help administer the
21st Century Learning Center after school program
Regional Gifted - assigned to provide student oriented programs and
professional development services
Williamson County Film Library - assigned to cover salary and travel
expenses for the media assistant
New Principal Mentoring Program- assigned to provide for the selection and
training of experienced principals to serve as mentors for new principals
46
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
J. Fund Equity- Continued
Unassigned - available expendable financial resources in a Governmental Fund that
are not designated for a specified purpose. The unassigned fund balance is made up
of the following accounts: County Budget, Interest Allocation, General Operating,
Enterprise/Workshop, Illinois Violence Prevention, Substance Abuse Prevention &
Treatment Block Grant, McKinney Education for Homeless Children, Education
Jobs, ROEIISC Operations, General Education Development, Certification, and
Network Internet.
K. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of
revenues, expenditures, gains, losses, and other changes in fund balance during the
reporting period. Actual results could differ from those estimates.
L. New Accounting Pronouncements
The GASB has issued the following pronouncements effective for the ROE's fiscal
year ending June 30,2011.
GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions, which establishes a hierarchy of fund balance classifications based
primarily on the extent to which a government is bound to observe spending
constraints upon how resources reported in governmental funds may be used, thereby
improving this information by providing clearer, more structured fund balance
classifications, and by clarifying the definitions of existing governmental fund types.
GASB Statement No. 59, Financial Instruments Omnibus, which is intended to
improve existing standards regarding financial reporting and disclosure requirements
of certain financial instruments and external investment pools for which significant
issues have been identified in practice. This statement provides more complete
information, by improving consistency of measurements, and provides clarifications
of existing standards. This standard had no effect on the ROE's financial statements.
47
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
L. New Accounting Pronouncements - Continued
GASB Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements,
which is intended to improve financial reporting by contributing to the GASB' s
efforts to codify all sources of generally accepted accounting principles for state and
local governments so that they derive from a single source. This Statement intends to
provide more consistent application of applicable guidance in financial statements of
state and local governments. This standard had no effect on the ROE's financial
statements.
M. Reclassifications
Certain reclassifications have been made to the prior year financial statements in
order for them to be in conformity with the current year presentation.
2. DEPOSITS AND INVESTMENTS
The Illinois Compiled Statutes authorize the ROE to invest in U.S. Government, State of
Illinois, and municipal securities; certificates of deposit or time savings deposits insured
by the FDIC; mortgage notes, bonds, or debentures issued by the Federal Housing
Administration; bonds and other obligations of the Federal National Mortgage
Association; commercial paper rated within the three highest classifications by at least
two standard rating services; credit union shares; and the Illinois Funds.
Bank Deposits
Custodial Credit Risk- Custodial credit risk for deposits with financial institutions is the
risk that, in the event of bank failure, the ROE's deposits may not be returned to it. The
ROE does not have a formal investment policy to guard against custodial credit risk for
deposits with financial institutions. All of the bank balances are covered by federal
depositor insurance or by collateral held by the ROE, or its agent, in the ROE's name.
Investments
The ROE does not have a formal investment policy but requires that funds be invested
solely in investments authorized by the Public Funds Investment Act, 30 ILCS 235/2.
Custodial Credit Risk- Custodial credit risk for investments is the risk that, in the event
of the failure of the counterparty to the investment, the ROE will not be able to recover
the value of its investments that are in possession of an outside party.
48
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
2. DEPOSITS AND INVESTMENTS - Continued
Investments - Continued
Interest Rate Risk- Interest rate risk is the risk that changes in market interest rates will
adversely affect the fair value of an investment. Generally, the longer the maturity of an
investment, the greater the sensitivity of its fair value to changes in market interest rates.
The ROE invests solely in investments authorized by the Public Funds Investment Act,
30 ILCS 235/2. The ROE limits its interest rate risk by investing solely in the Illinois
Funds (the Fund). The Fund is an external investment pool authorized by the Illinois
General Assembly. The Fund is exempt from registering with the Securities and
Exchange Commission. The Fund is rated by Standard and Poors upon the request of the
Fund's management. The most recent money market rating issued by Standard and Poors
was AAAm. The fair value of the position in the Illinois Funds Investment Pool is the
same as the value of the pool shares. Illinois State Statute provides the Illinois State
Treasurer with regulatory oversight over the Pool.
Credit Risk- Generally, credit risk is the risk that an issuer of an investment will not
fulfill its obligation to the holder of the investment. This is measured by the assignment
of a rating by a nationally recognized statistical rating organization. The ROE limits its
credit risk by investing solely in the Illinois Funds.
3. COMMON BANK ACCOUNT
Separate bank accounts are not maintained for all ROE funds. Certain funds maintain
their uninvested cash balance in a common checking account with accounting records
being maintained to show the portion of the common bank account balance attributable to
each participating fund.
49
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
4. CAPITAL ASSETS
5.
Governmental Activities
Capital asset activity for the year ended June 30, 2011 is as follows:
Balance Balance
July 1, June 30,
2010 Additions Deletions 2011
Furniture and equipment $ 523,629 $ 62,872 $ 10,025 $ 576,476
Building 47,000 47,000
Total capital assets 570,629 62,872 10,025 623,476
Less accumulated depreciation for:
Furniture and equipment 410,002 45,015 9,227 445,790
Building 12,925 1,175 14,100
Total accumulated depreciation 422,927 46,190 9,227 459,890
Total capital assets, net of
accumulated depreciation $ 147.702 $ 16.682 $ 798 $ 163.586
Depreciation was charged to the Instructional Services activity.
EMPLOYEE'S RETIREMENT PLANS
The ROE participates in two retirement systems: The Teachers' Retirement System of
the State of Illinois (TRS) and the Illinois Municipal Retirement Fund (IMRF). Members
of TRS include all active nonannuitants who are employed by a TRS-covered employer
to provide services for which teacher certification is required. Employees, other than
teachers, who meet prescribed annual hourly standards, are members of IMRF.
50
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
5. EMPLOYEE'S RETIREMENT PLANS- Continued
A. 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 percent of creditable earnings,. The same contribution rate applies to members
whose first contribution service is on or after January 1, 2011, the effective date of the
benefit changes contained in Public Act 96-0889. These contributions, which may be
paid on behalf of employees by the employer, are submitted to TRS by the employer.
The active member contribution rate was also 9.4 percent for the years ended June 30,
2010 and 2009.
The State of Illinois makes contributions directly to TRS on behalf of the ROE's
TRS-covered employees:
• On Behalf Contributions
The State of Illinois makes employer pension contributions on behalf of the ROE.
For the year ended June 30, 2011, State of Illinois contributions were based on 23.10
percent of creditable earnings not paid from federal funds, and the ROE recognized
revenue and expenditures of $261,778 in pension contributions that the State of
Illinois paid directly to TRS. For the years ended June 30, 2010 and June 30, 2009,
the State of Illinois contribution rates as percentages of creditable earnings not paid
from federal funds were 23.38 percent ($253,200) and 17.08 percent ($190,439),
respectively.
The ROE makes other types of employer contributions directly to TRS:
• 2.2 Formula Contributions
Employers contribute 0.58 percent of total creditable earnings for the 2.2 formula
change. This rate is specified by statute. Contributions for the year ended June 30,
2011 were $5,462. Contributions for the years ending June 30, 2010 and June 30,
2009 were $5,171 and $5,357, respectively.
51
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS - Continued
5. EMPLOYEE'S RETIREMENT PLANS- Continued
A. Teachers' Retirement System of the State of Illinois (TRS)- Continued
• Federal and Special Trust Fund Contributions
When TRS members are paid from federal and special trust funds administered by the
ROE, there is a statutory requirement for the ROE to pay an employer pension
contribution from those funds. Under a policy adopted by the TRS Board of Trustees
that was first effective for the fiscal year ended June 30, 2006, employer contributions
for employees paid from federal and special trust funds will be the same as the State
contribution rate to TRS.
For the year ended June 30,2011, the employer pension contribution was 23.10
percent of salaries paid from federal and special trust funds. For the years ended
June 30, 2010 and 2009, the employer pension contribution was 23.38 and 17.08
percent of salaries paid from federal and special trust funds, respectively. For the
year ended June 30, 2011, salaries totaling $145,046 were paid from federal and
special trust funds that required employer contributions of$33,506. For the years
ended June 30,2010 and June 30,2009, required ROE contributions were $19,163
and $19,059, respectively.
• Early Retirement Option (ERO)
The ROE is also required to make one-time employer contributions to TRS for
members retiring under the Early Retirement Option (ERO). The payments vary
depending on the age and salary of the member.
The maximum employer ERO contribution is 117.5 percent and applies when the
member is age 55 at retirement.
For the year ended June 30, 2011, the ROE paid no amounts to TRS for employer
contributions under the ERO program. For the years ended June 30, 2010 and
June 30, 2009, the ROE paid $0 and $0 in employer ERO contributions, respectively.
New Employer Contributions-
Public Act 94-0004 added two additional employer contributions to TRS.
• Salary increases over 6 percent
If an employer grants salary increases over 6 percent and those salaries are used to
calculate a retiree's final average salary, the employer makes a contribution to TRS.
The contribution will cover the difference in actuarial cost of the benefit based on
actual salary increases and the benefit based on salary increase of up to 6 percent.
52
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
5. EMPLOYEE'S RETIREMENT PLANS- Continued
A. Teachers' Retirement System of the State of Illinois (TRS)- Continued
For the year ended June 30, 2011, the ROE paid $0 to TRS for employer
contributions due on salary increases in excess of 6 percent. For the year ended
June 30,2010 and June 30,2009, the ROE paid $0 and $0 to TRS for employer
contributions due on salary increases in excess of 6 percent, respectively.
• Sick leave in excess of normal allotment
If an employer grants sick leave days in excess of the normal annual allotment and
those days are used as TRS service credit, the employer makes a contribution to TRS.
The contribution is based on the number of excess sick leave days used as service
credit, the highest salary used to calculate final average salary, and the TRS total
normal cost rate (18.03 percent of pay during the year ended June 30, 2011, as
recertified pursuant to Public Act 96-1511 ).
For the year ended June 30, 2011, the ROE paid $0 to TRS for sick leave days
granted in excess of the normal annual allotment. For the years ended June 30, 2010
and June 30, 2009, the ROE paid $0 and $0 in employer contributions granted for
sick leave days, respectively.
TRS financial information, an explanation ofTRS benefits, and descriptions of member,
employer, and State funding requirements can be found in the TRS Comprehensive
Annual Financial Report for the year ended June 30, 2010. The report for the year ended
June 30, 2011, is expected to be available in late 2011. The reports may be obtained by
writing to the Teachers' Retirement System of the State of Illinois, P.O. Box 19253,2815
West Washington Street, Springfield, Illinois 62794-9253. The most current report is
also available on the TRS Web site at http://trs.illinois.gov.
B. Illinois Municipal Retirement Fund
Plan Description. The ROE's defined benefit pension plan for regular employees
provides retirement and disability benefits, post retirement increases, and death
benefits to plan members and beneficiaries. The ROE'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 for the
plan as a whole, but not for individual employers. That report may be obtained on-line
at www.imrf.org.
53
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
5. EMPLOYEE'S RETIREMENT PLANS- Continued
B. Illinois Municipal Retirement Fund- Continued
IMRF provides two tiers of pension benefits. Employees hired prior to January 1,
2011, are eligible for Tier 1 benefits. For Tier 1 employees, pension benefits vest
after eight years of service. Participating members who retire at age 55 (reduced
benefits) or after age 60 (full benefits) with eight years of credited service are entitled
to an annual retirement benefit, payable monthly for life, in an amount equal to 1
2/3% of their final rate of earnings, for each year of credited service up to 15 years,
and 2% for each year thereafter.
Employees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For Tier
2 employees, pension benefits vest after 10 years of service. Participating members
who retire at age 62 (reduced benefits) or after age 67 (full benefits) with 10 years of
credited service are entitled to an annual retirement benefit, payable monthly for life,
in an amount equal to 1 2/3% of their final rate of earnings, for each year of credited
service up to 15 years, and 2% for each year thereafter.
Funding Policy. As set by statute, employees participating in IMRF are required to
contribute 4.50 percent of their annual covered salary. The statute requires employers
to contribute the amount necessary, in addition to member contributions, to finance
the retirement coverage of its own employees. The employer contribution rate for
calendar year 2010 was 9.57 percent of annual covered payroll. The ROE also
contributes for disability benefits, death benefits and supplemental retirement
benefits, all of which are pooled at the IMRF level. Contribution rates for disability
and death benefits are set by the IMRF Board of Trustees, while the supplemental
retirement benefits rate is set by statute.
Annual Pension Cost. For 2010, the ROE's annual pension cost of$35,677 for the
regular plan was equal to the ROE's required and actual contributions.
Three-Year Trend Information for the Regular Plan
Actuarial Annual Percentage
Valuation Pension ofAPC Net Pension
Date Cost (APC) Contributed Obligation
12/31110 $ 35,677 100% $0
12/31109 3,434 100% 0
12/31108 7,429 100% 0
54
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
5. EMPLOYEE'S RETIREMENT PLANS- Continued
B. Illinois Municipal Retirement Fund- Continued
The required contribution for 2010 was determined as part of the December 31 , 2008
actuarial valuation using the entry age normal actuarial cost method. The actuarial
assumptions at December 31 , 2008, included (a) 7.50 percent investment rate of
return (net of administrative and direct investment expenses), (b) projected salary
increases of 4.00 percent a year, attributable to inflation, (c) additional projected
salary increases ranging from 0.4 to 10.0 percent per year depending on age and
service, attributable to seniority/merit, and (d) post-retirement benefit increases of 3
percent annually. The actuarial value of the ROE's regular plan assets was
determined using techniques that spread the effects of short-term volatility in the
market value of investments over a five-year period with a 20 percent corridor
between the actuarial and market value of assets. The ROE ' s regular plan' s unfunded
actuarial accrued liability at December 31, 2008 is being amortized as a level
percentage of projected payroll on an open 10 year basis.
Funding Status and Funding Progress. As of December 31, 2010, the most recent
actuarial valuation date, the plan was 91.80 percent funded. The actuarial accrued
liability for benefits was $917,426 and the actuarial value of assets was $842,195,
resulting in an underfunded actuarial accrued liability (UAAL) of $75,231. The
covered payroll for calendar year 2010 (annual payroll of active employees covered
by the plan) was $372,796 and the ratio of the UAAL to the covered payroll was
20.18 percent.
The schedule of funding progress, presented as RSI following the notes to the
financial statements, presents multiyear trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liability for benefits.
6. INTERFUND RECEIVABLES/PAY ABLES
Funds periodically borrow from other funds to cover temporary cash shortages. These
loans are usually paid in full within a few months. No interest is charged on the loans
outstanding. Following is a summary of the outstanding amounts due from (to) other
funds as of June 30, 2011:
General Fund
Education Fund
Non-major Special Revenue Funds
Paper Bid Fund
Total
55
Due from
Other Funds
$ 338,488
$ 338.488
Due to
Other Funds
$ 66,524
208,007
24,453
39 504
$ 338.488
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
7. DUE TO/FROM OTHER GOVERNMENTS
A summary of amounts due from other governments from general, special revenue,
proprietary, and agency funds at June 30, 2011 follows:
General Fund:
Illinois State Board of Education
MAN-TRA-Con Corp. (DCEO)
Total General Fund
Education Fund:
Illinois State Board of Education
Illinois Department of Human Services
ROE#2
ROE#30
Total Education Fund
Nonmajor Special Revenue Fund:
ROE#2
ROE# 12
ROE#20
ROE#30
Total Nonmajor Special Revenue Fund
Enterprise Fund:
School Districts
Agency Funds:
Illinois State Board of Education
Illinois Department of Revenue
Total
Total
$ 50,646
45.524
96.170
131,234
36,834
11,286
40,998
220.352
192
420
2,420
346
3.378
$ 39,504
21,359
1,090,741
1,112,100
$ 1.471.504
A summary of amounts due to other governments from general, special revenue, and
agency funds at June 30,2011 follows:
General Fund:
Illinois State Board of Education
United States Department of Education
Illinois Violence Prevention Authority
Total General Fund
56
$ I
11
12
24
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
7. DUE TO/FROM OTHER GOVERNMENTS- Continued
Education Fund:
Illinois Violence Prevention Authority
School Districts
$ 9,283
Total Education Fund
Agency Fund:
Primary government (ROE #21)
School Districts
Total Agency Fund
2,200
11,483
21,359
1,091,053
1,112,412
Total $ 1.123.919
8. RISK MANAGEMENT
The ROE is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
Insurance to cover these risks is provided through Franklin and Williamson Counties.
Claims from these risks have not exceeded commercial insurance coverage during the
current fiscal year and the previous two fiscal years.
9. 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-expended
appropriations during the year are required to be disclosed.
The following funds/fund accounts had deficit fund balances/net assets at June 30, 2011:
Education Fund:
Illinois Violence Prevention
Substance Abuse Prevention & Treatment Block Grant
McKinney Education for Homeless Children
Education Jobs
ROE/ISC Operations
Nonmajor Special Revenue Funds:
General Education Development
Institute Fund:
Certification
Network Internet
57
$ 998
1
2,090
17,118
4,982
19,634
1,234
378
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
10. ON-BEHALF SALARIES AND BENEFITS
As previously noted, the State of Illinois makes employer pension contributions on
behalf of the ROE. The salaries, benefits, and TRS contributions of the Regional
Superintendent and the Assistant Superintendent are paid by the State of Illinois. The
amounts paid by the State of Illinois are as follows:
Regional Superintendent salary
Regional Superintendent benefits
(Includes State paid insurance)
Assistant Regional Superintendent salary
Assistant Regional Superintendent benefits
Total
$
$
100,762
13,843
90,686
24,321
229.612
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.
Franklin and Williamson Counties provide the Regional Office of Education No. 21 with
staff on behalf of the Regional Office of Education No. 21. The expenditures paid on the
Regional Office of Education No. 21's behalf for the year ended June 30, 2011, were as
follows:
Salaries
Benefits
Total
$ 153,176
10 844
$ 164.020
These awards are included in the financial statements of the General Fund as on-behalf
payments. In addition to the $229,612 and $164,020 above, on-behalf payments include
$261,778 for TRS contributions for the Regional Superintendent, Assistant Regional
Superintendent and other employees and $8,288 for THIS Fund contributions, for a total
of $663,698 for the year ended June 30, 2011.
58
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
11. LEASES
The ROE leased office space for their Marion satellite location, office space for their
Project ECHO and S.T.A.R. Quest location, and office equipment during the fiscal year.
Future minimum rental payments under noncancellable operating leases are as follows:
2012 $ 40,961
2013 39,594
2014 37,680
2015 18,000
2016 18,000
2017-2019 54,000
Total $ 2082235
Rent expense for the year ended June 30, 2011 was $49,246.
12. INTERFUND TRANSFERS
During the year ended June 30,2011, the following interfund transfers occurred:
Transfer In Transfers out
General Fund:
Computer Maintenance $ 42,194 $
ECHO 67,095
Total General Fund 42,194 67,095
Non-major Special Revenue Fund:
Network Internet 24,901
Total Non-major Special Revenue Fund 24.901
Total $ 672095 $ 672025
59
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS - Continued
13. OTHER POSTEMPLOYMENT BENEFITS
The Regional Office of Education No. 21 participates in two retirement systems that
provide postemployment benefits to annuitants: The Illinois Municipal Retirement Fund
(IMRF) and the Teachers' Retirement System ofthe State of Illinois (TRS).
A. Illinois Municipal Retirement Fund
Plan Description
In addition to providing the pension benefits described, the ROE provides
postemployment health care benefits (OPEB) for retired employees through a single
employer defined benefit plan. The benefits, benefit levels, employee contributions
and employer contributions are governed by the ROE and can be amended by the
ROE through its personnel manual, except for the implicit subsidy which is governed
by the State Legislature and ILCS. The plan is not accounted for as a trust fund, as
an irrevocable trust has not been established to account for the plan. The plan does
not issue a separate report. The activity of the plan is reported in the ROE's
governmental funds.
Benefits Provided
The ROE provides continued health insurance coverage at the blended employer rate
to all eligible retirees in accordance with ILCS, which creates an implicit subsidy of
retiree health insurance. To be eligible for benefits, an employee must qualify for
retirement under the ROE's retirement plan. Upon a retiree reaching age 65 years of
age, Medicare becomes the primary insurer and the retiree is no longer eligible to
participate in the plan, but can purchase a Medicare supplement plan from the ROE's
insurance provider.
Membership
At June 30, 2011, membership consisted of:
Retirees and Beneficiaries Currently Receiving Benefits
Terminated Employees Entitled
to Benefits but not yet Receiving Them
Active Employees
TOTAL
Participating Employers
60
10
10
1
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
13. OTHER POSTEMPLOYMENT BENEFITS- Continued
A. Illinois Municipal Retirement Fund- Continued
Funding Policy
The ROE is not required to and currently does not advance fund the cost of benefits
that will become due and payable in the future. Active employees do not contribute
to the plan until retirement.
Annual OPEB Costs and Net OPEB Obligation
The ROE first had an actuarial valuation performed for the plan as of June 30, 2011
to determine the funded status of the plan as of that date as well as the employer's
annual required contribution (ARC) for the fiscal year ended June 30, 2011. The
ROE's annual OPEB cost (expense) of$1,001 was equal to the ARC for the fiscal
year, as the transition liability was set at zero as of July 1, 2010. The ROE's annual
OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net
OPEB obligation for 2011 was as follows (information for the two preceding years is
not available as an actuarial valuation was performed for the first time as of June 30,
2011):
Fiscal
Year
Ended
June 30, 2011 $
Annual
OPEB
Cost
1,001 $
Percentage of
Employer Annual OPEB
Contributions Cost Contributed
0% $
The net OPEB obligation as of June 30, 2011, was calculated as follows:
Annual Required Contribution
Interest on Net OPEB Obligation
Adjustment to Annual Required Contribution
Annual OPEB Cost
Contributions Made
Increase in Net OPEB Obligation
Net OPEB Obligation Beginning of Year
NET OPEB OBLIGATION END OF YEAR
61
$
$
NetOPEB
Obligation
1,001
1,001
1,001
1,001
1,001
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
13. OTHER POSTEMPLOYMENT BENEFITS- Continued
A. Illinois Municipal Retirement Fund- Continued
Annual OPEB Costs and Net OPEB Obligation- Continued
Funded Status and Funding Progress. The funded status of the plan as of June 30,
2011, was as follows:
Actuarial Accrued Liability (AAL)
Actuarial Value of Plan Assets
Unfunded Actuarial Accrued Liability (UAAL)
Funded Ratio (Actuarial Value of Plan Assets/AAL)
Covered Payroll (Active Plan Members)
UAAL as a Percentage of Covered Payroll
$
$
7,612
7,612
0.0%
347,674
2.19%
Actuarial Methods and Assumptions - Projections of benefits for financial reporting
purposes are based on the substantive plan (the plan as understood by the employer
and plan members) and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing of benefit costs between the employer
and plan members to that point. The actuarial methods and assumptions used
include techniques that are designed to reduce short-term volatility in actuarial
accrued liabilities and the actuarial value of assets, consistent with the long-term
perspective of the calculations.
In the June 30, 2011, actuarial valuation, the entry-age actuarial cost method was
used. The actuarial assumptions included a discount rate of 5.00% and an initial
healthcare cost trend rate of 8.00% with an ultimate healthcare inflation rate of
6.00%. Both rates include a 3.00% inflation assumption. The actuarial value of
assets was not determined as the ROE has not advance funded its obligation. The
plan's unfunded actuarial accrued liability is being amortized as a level percentage of
projected payroll on an open basis. The remaining amortization period at April 30,
2011 was 30 years.
62
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
13. OTHER POSTEMPLOYMENT BENEFITS -Continued
B. Teachers' Retirement System of the State of Illinois (TRS)
THIS Fund Employer Contributions
The ROE participates in the Teacher Health Insurance Security (THIS) Fund, a cost-sharing
multiple-employer defined benefit postemployment healthcare plan that was
established by the Illinois legislature for the benefit of Illinois public school teachers
employed outside the City of Chicago. The THIS Fund provides medical,
prescription, and behavioral health benefits, but does not provide vision, dental, or
life insurance benefits to annuitants of the Teachers' Retirement System (TRS).
Annuitants may participant 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 ofTRS. The
director of HFS determines the rates and premiums for annuitants and dependent
beneficiaries and establishes the cost-sharing parameters. Section 6.6 of the State
Employees Group Insurance Act of 1971 requires all active contributors to the TRS
who are not employees of the state to make contributions to THIS.
The percentage of employer required contributions in the future will be determined
by the director of Healthcare and Family Services and will not exceed 105 percent of
the percentage of salary actually required to be paid the previous fiscal year.
The State of Illinois makes contributions directly to THIS on behalf of the ROE's
TRS-covered employees:
• On Behalf Contributions
The State of Illinois makes employer retiree health insurance contributions on behalf
of the ROE. State contributions are intended to match contributions to THIS Fund
from active members which were 0.88 percent of pay during the year ended June 30,
2011. State of Illinois contributions were $8,288 and the ROE recognized revenue
and expenditures of this amount during the year.
Had the ROE recognized revenue and expenditures for State contributions intended to
match active member contributions during the years ended June 30, 2010 and
June 30, 2009, under current standards, the contributions match would have been 0.84
percent of pay or $9,097 and $9,366, respectively.
63
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS- Continued
13. OTHER POSTEMPLOYMENT BENEFITS- Continued
B. Teachers' Retirement System of the State of Illinois (TRS)- Continued
THIS Fund Employer Contributions - Continued
• Employer Contributions
The ROE also makes contributions to THIS Fund. The employer THIS Fund
contribution was 0.66 percent during the year ended June 30, 2011. The employer
contribution was 0.63 percent during the years ended June 30, 2010, and June 30,
2009. For the year ended June 30, 2011, the ROE paid $6,216 to THIS Fund. For the
years ended June 30, 2010 and June 30, 2009, the ROE paid $6,823 and $7,024,
respectively, which was 100 percent of the required contribution.
The publicly available financial report of the THIS Fund may be obtained by writing
to the Department ofHealthcare and Family Services, 201 S. Grand Ave.,
Springfield, IL 62763-3838.
14. LONG-TERM DEBT
Capital Leases
The ROE is obligated under an equipment lease accounted for as a capital lease. The
leased asset (telephone system) and related obligation are accounted for as governmental
activities. The asset under the capital lease net of depreciation totaled $44,703 at June
30, 2011. Payments on the leased equipment were made from the Network Internet
account within the Institute Fund used to record network administrator fees and E-rate
telephone payments received and were not made from teacher registration or certification
fees. The following is a schedule of future minimum lease payments under the capital
lease, together with the net present value of the minimum lease payments at June 30,
2011:
Year ended June 30,
2012
2013
Future minimum lease payments
Less: Amount representing interest
Present value of minimum lease payments
64
$
7,295
1,216
8,511
854
7.657
FRANKLIN/WILLIAMSON COUNTIES
REGIONAL OFFICE OF EDUCATION NO. 21
NOTES TO FINANCIAL STATEMENTS -Continued
15. RECLASSIFICATION
As shown in the following table, the financial statements of the ROE have been reclassified
as of June 30, 2010 for the implementation of GASB Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions. Regional Gifted, Williamson County
Film Library, ECHO, and Regional Safe Schools were presented as accounts of the
Education Fund, a special revenue fund, in previous years but were reclassified to General
Fund based upon criteria of GASB Statement No. 54. ROE/ISC operations was presented
as an account of the General Fund in previous years but was reclassified to the Education
Fund based upon criteria of GASB Statement No. 54.
General Fund Education Fund
Fund balance, June 30, 2010,
as previously reported $ 133,039 $ 799,657
Implementation of GASB Statement No. 54 812,706 (812,706)
Fund balance, June 30, 2010,
as reclassified $ 9451745 $ (131049)
65
REQUIRED SUPPLEMENTARY INFORMATION
(Other than Management's Discussion and Analysis)
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
June 30, 2011
(Unaudited- See Accompanying Independent Auditors' Report)
ILLINOIS MUNICIPAL RETIREMENT FUND
Actuarial
Accrued UAALas a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)- AAL Funded Covered of Covered
Valuation Assets Entry (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (alb) (c) ((b-a)/c)
12/3112010 $ 842,195 $ 917,426 $ 75,231 91.80% $ 372,796 20.18%
12/31/2009 849,230 916,687 67,457 92.64% 385,884 17.48%
12/3112008 810,531 817,331 6,800 99.17% 337,676 2.01%
12/3112007 860,985 744,713 (116,272) 115.61% 309,872 (37.52)%
12/31/2006 758,041 680,530 (77,511) 111.39% 392,728 (19.74)%
12/3112005 675,969 737,133 61,164 91.70% 444,004 13.78%
On a market value basis, the actuarial value of assets as of December 31, 2010 is $884,589. On a market basis,
the funded ratio would be 96.42%.
66
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
Fiscal
Year
12/31/10
12/31109
12/31/08
12/31107
12/31/06
12/31/05
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS
ILLINOIS MUNICIPAL RETIREMENT FUND
June 30, 2011
Annual
Required
Employer Contribution
Contributions (ARC)
$ 35,677 $ 35,677
3,434 3,434
7,429 7,429
32,908 32,908
46,381 46,381
54,968 54,968
67
Percentage
Contributed
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
Actuarial
Valuation
Date
6130/11 $
(1)
Actuarial
Value of
Assets
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
OTHER POSTEMPLOYMENT BENEFIT PLAN
June 30, 2011
(2) (4)
Actuarial Unfunded
Accrued (3) (Overfunded)
Liability Funded AAL
(AAL) Ratio (UAAL)
-Entry Age (1) I (2) (2)-(1)
$ 7,612 0.00% $ 7,612
The ROE implemented GASB Statement No. 45 for the fiscal year ended June 30, 2011.
Information for prior years is not available.
68
UAAL
(Overfunded)
As a
Percentage
(5) of Covered
Covered Payroll
Payroll (4) I (5)
$ 347,674 2.19%
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
Fiscal
Year
6/30/11
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS
OTHER POSTEMPLOYMENT BENEFIT PLAN
$
June 30,2011
Employer
Contributions
$
Annual
Required
Contribution
(ARC)
1,001
Percentage
Contributed
0.00%
The ROE implemented GASB Statement No. 45 for the fiscal year ended June 30, 2011.
Information for prior years is not available.
69
SUPPLEMENTAL INFORMATION
:.-,.
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. l1
GENERAL FUND
COMBINING SCHEDULE OF ACCOUNTS
June 30, lOU
Williamson
Computer County Interest Genersl Enterprise/ Prevention Regional County Film Regional
Maintenance Budaet Allocation Oeerstins Workshoe Social Marketins Gifted Lib!!!I ECHO Safe Schools Total
ASSETS
Cash and cash equivalents $ $ IS2 $ 16,7S7 $ 101,449 $ 63,688 $ 2,893 $ 4,188 $ 17,088 $ 279,317 $ 233,933 $ 719,46S
Accounts receivable 1,468 446 10,439 12,3S3
Due from Illinois State Board of Education S0,646 S0,646
Due from other governments 4S,S24 4S,S24
Due from other funds 10 338,478 338,488
Prepaid expense 9847 so 21006 9900 40803
TOTAL ASSETS $ $ IS2 $ 16 7S7 $ 112,774 $ 64184 $ 2 893 $ 4188 $ 17,088 $ 694 764 $ 294479 $ 1,207,279
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ $ $ $ 1,441 $ 30S $ $ $ $ 101,9S7 $ 11,144 $ 114,847
Due to other governments 24 24
Due to other funds IS,S22 SI,002 66,S24
Deferred revenue 8446 8446
......:1 Total Liabilities 24 1441 30S 117 479 70S92 189841
0
Fund Balance
Nonspendable 9,847 so 21,006 9,900 40,803
Restricted 10,833 10,833
Assigned 2,893 4,188 17,088 S4S,446 213,987 783,602
Unassigned IS2 16 733 101 486 63 829 182,200
Total Fund Balance IS2 16733 Ill 333 63 879 2 893 4188 17088 S77 28S 223,887 I 017 438
TOTAL LIABILITIES AND
FUND BALANCE $ $ IS2 $ 16 7S7 $ 112 774 $ 64184 $ 2 893 $ 4188 $ 17 088 $ 694 764 $ 294479 $ 1,207,279
See accompanying Independent Auditors' Report.
FRANKLIN/WILLIAMSON COUNTIES REGIONAL OFFICE OF EDUCATION NO. 21
GENERAL FUND ACCOUNTS
COMBINING SCHEDULE OF