FY11-ROE51-Fin-Full

              State of Illinois
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
FINANCIAL AUDIT
(In Accordance with the Single Audit Act
and OMB Circular A-133)
For the Year Ended June 30,2011
Performed as Special Assistant Auditors
For the Office of the Auditor General
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
TABLE OF CONTENTS
JUNE 30,2011
Agency Officials ......................................................................................... ..
Compliance Report Summary ................................................................... .
Financial Statement Report Summary ..................................................... ..
FINANCIAL SECTION
Independent Auditor's Report ....................................................................... .
Independent Auditor's Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on
an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards ....................................... .
Independent Auditor's Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major Program
and on Internal Control over Compliance in Accordance with
OMB Circular A-133 .................................................................................... .
Schedule of Findings and Questioned Costs
Section I- Summary of Auditor's Results ............................................ ..
Section II - Financial Statement Findings ............................................. ..
Section Ill- Federal Award Findings .................................................... ..
Corrective Action Plan for Current-Year Audit Findings ............................ ..
Summary Schedule of Prior Audit Findings ................................................. .
Management's Discussion and Analysis ....................................................... .
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets ............................................................................. .
Statement of Activities ............................................................................... .
Fund Financial Statements
Balance Sheet - Governmental Funds ...................................................... ..
Reconciliation of the Balance Sheet to the
Statement ofNet Assets- Governmental Funds ................................... .
Statement ofRevenues, Expenditures, and Changes
in Fund Balances - Governmental Funds .............................................. .
PAGE
1
2-3
4
5-6
7-8
9-10
11
12a-12b
13
14a
15
16a-16f
17
18
19
20
21
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Statement of Activities -
Governmental Funds............................................................................. 22
Statement of Net Assets- Proprietary Funds ............................................. 23
Statement of Revenues, Expenses, and Changes
in Fund Net Assets- Proprietary Funds................................................ 24
Statement of Cash Flows - Proprietary Funds............................................ 25
Statement of Fiduciary Net Assets- Fiduciary Funds......... ....................... 26
Notes to the Financial Statements .............................................................. 27-57
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund Schedule of Funding Progress ............. .
OTHER SUPPLEMENTARY INFORMATION
Combining Schedule of Accounts
General Fund .............................................................................................. .
Combining Schedule of Revenues, Expenditures, and Changes in
Fund Balances - General Fund Accounts .................................................. .
Combining Schedule of Accounts
Education Fund .......................................................................................... .
Combining Schedule ofRevenues, Expenditures, and Changes in
Fund Balances - Education Fund Accounts .............................................. .
Budgetary Comparison Schedules
Education Fund
Regional Safe Schools ........................................................................... .
Title I- Reading First Part B SEA ........................................................ .
Area III - Homeless Liaison Project.. .................................................... .
Sangamon County Truants Alternative Optional Education Program .. .
System of Support ................................................................................. .
Miscellaneous Federal Programs
Title II- Teacher Quality ................................................................. .
Title IV- Safe and Drug-Free Schools ............................................ .
Learn and Serve America (10-4910-00) ............................................... ..
Learn and Serve America (11 -4910-00) ................................................ .
illinois Transition Planning Institute ..................................................... .
ROE/ISC Operations ............................................................................. .
Gifted Education .................................................................................... .
Combining Balance Sheet
Nonmajor Special Revenue Funds ............................................................. .
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances - Nonmajor Special Revenue Funds ................................. .
58
59
60
61-65
66-70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
Combining Statement of Net Assets
Nonmajor Proprietary Funds ................................................... ~··············· ···· 85
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Assets- Nonmajor Proprietary Funds.................................... 86
Combining Statement of Cash Flows
Nonmajor Proprietary Funds....................................................................... 87
Combining Statement of Fiduciary Net Assets
Agency Funds.............................................................................................. 88-89
Combining Statement of Changes in Assets and Liabilities
Agency Funds.............................................................................................. 90-93
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards................................................ 94-95
Notes to the Schedule of Expenditures of Federal Awards........................... 96
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
Regional Superintendent
(Current and during the audit period,
Acting Effective August 10, 2010)
Assistant Regional Superintendent
(Current and during the audit period,
Acting Effective August 16, 2010)
Assistant Regional Superintendent
(During the audit period,
OFFICIALS
Acting Effective July 1, 2010, through August 10, 2010)
Office is located at:
200 South Ninth Street
Room 303 County Complex
Springfield, IL 62701-1629
1
Mr. JeffVose
Ms. Shannon Fehrholz
Mr. JeffVose
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
COMPLIANCE REPORT SUMMARY
The compliance audit testing performed in this audit was conducted in accordance with Government
Auditing Standards and in accordance with the illinois State Auditing Act.
AUDITOR'S REPORTS
The auditor's reports on compliance and on internal controls do not contain scope limitations,
disclaimers, or other significant nonstandard language.
SUMMARY OF AUDIT FINDINGS
Number of This Audit Prior Audit
Audit findings
Repeated audit findings
Prior recommendations implemented
or not repeated
1
1
2
Details of audit findings are presented in a separate report section.
3
2
3
Additional matters which are less than significant deficiencies or material weaknesses 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.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-01 12a Controls Over Financial Statement Preparation Material Weakness
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
None
2
10-02
10-03
None
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
COMPLIANCE REPORT SUMMARY
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
15
15
Inadequate Internal Control Procedures
Departure from Generally Accepted
Accounting Principles
Material Weakness
Material Weakness
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
EXIT CONFERENCE
The findings and recommendations appearing in this report were discussed with Agency personnel at an
informal exit conference on August 19, 2011. Attending were Jeff Vose, Regional Superintendent;
Mimi Power, Fiscal Manager; and Tami Knight, Partner, Kemper CPA Group, LLP. Responses to the
recommendations were provided by JeffVose, Regional Superintendent, on December 20, 2011.
3
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
FINANCIAL STATEMENT REPORT SUMMARY
The audit of the accompanying basic financial statements of the Sangamon County Regional Office of
Education #51 was performed by Kemper CPA Group LLP, Certified Public Accountants and
Consultants.
Based on their audit, the auditors expressed an unqualified opinion on the Regional Office of Education
#51's basic financial statements.
4
Honorable William G. Holland
Auditor General
State of illinois
iiii~P~~[oEu~.u
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
As Special Assistant Auditors for the Auditor General, we have audited the accompanying financial
statements of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the Regional Office of Education #51, as of and for the year
ended June 30, 2011, which collectively comprise the Regional Office of Education #51's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the
Regional Office of Education #51's management. Our responsibility is to express opinions on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the Regional Office of Education #51, 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 #51 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 Regional Office of Education #51's governmental
funds' assets or liabilities nor was there any effect to the total amount of any of Regional Office of
Education #51's governmental fund balances as of and for the year ended June 30, 2011.
1413 Wabash Avenue• $1attoon, IL 61938
Phone: (217)234-8801 Fax: (217)234-8803 kempcrcpa.com
In accordance with Government Auditing Standards, we have also issued a report dated January 30,
2012, on our consideration of the Regional Office of Education #51's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on the internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards and should be considered
in assessing the results of our audit.
The Management's Discussion and Analysis and illinois Municipal Retirement Fund Schedule of
Funding Progress on pages 16a through 16f and 58 are not a required part of the basic financial
statements but are supplementary information required by accounting principles generally accepted in
the United States of America. We have applied certain limited procedures, which consisted principally
of inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Regional Office of Education #51's basic financial statements. The combining
and individual nonmajor fund financial statements and budgetary comprujson schedules are presented for
purposes of additional analysis and are not a required part of the basic financial statements. The
accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional
analysis as required by the U.S. Office of Management and Budget Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial
statements. 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.
Certified Public Accountants and Consultants
Mattoon, illinois
January 30, 2012
6
~-KEMPER
~~CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH 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 Regional Office of Education #51, as of and for the year ended June 30, 2011, which
collectively comprise the Regional Office of Education #51's basic financial statements and have issued
our report thereon dated January 30, 2012. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
Internal Control over Financial Reporting
Management of the Regional Office of Education #51 is responsible for establishing and maintaining
effective internal control over financial reporting. In planning and performing our audit, we considered
the Regional Office of Education #51's internal control over financial reporting as a basis for designing
our auditing procedures for the purpose of expressing our opinions on the financial statements, but not
for the purpose of expressing an opinion on the effectiveness of the Regional Office of Education #51's
internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness
of the Regional Office ofEducation #51 's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in the internal control over
financial reporting that might be significant deficiencies or material weaknesses and therefore, there can
be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been
identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we
identified a certain deficiency in internal control over financial reporting that we consider to be a
material weakness.
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 a
1413 Wabash Avenue• 'Mattoon, IL 61938
Pho ne: (217)234-8801 Fax: (217)234-8803 kempe rcpa.com
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on a
timely basis. We consider the deficiency described in finding 11-01 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 Regional Office of Education #51'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 which we have reported to management of the Regional Office of
Education #51 in a separate letter dated January 30, 2012.
The Regional Office of Education #51's response to the finding identified in our audit is described in the
accompanying Schedule of Findings and Questioned Costs. We did not audit the Regional Office of
Education #51'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, lllinois
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.
l(.lllllf»t C:P11 Gnnp LL p
Certified Public Accountants and Consultants
Mattoon, Illinois
January 30, 2012
8
~ttKEMPER
~~CPA GROUPLLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT
COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable William G. Holland
Auditor General
State of Illinois
Compliance
We have audited the Sangamon County Regional Office of Education #51'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 Sangamon County Regional Office of Education #51's
major federal programs for the year ended June 30, 2011. The Sangamon County Regional Office of
Education #51'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 San gam on County Regional Office of Education #51's management. Our responsibility is to express
an opinion on the Sangamon County Regional Office of Education #51'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
Sangamon County Regional Office of Education #51'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
Sangamon County Regional Office of Education #51's compliance with those requirements.
In our opinion, the Sangamon County Regional Office of Education #51 complied, in all material
respects, with the compliance requirements referred to above that could have a direct and material effect
on each of its major federal programs for the year ended June 30, 2011.
Internal Control Over Compliance
Management of the Sangamon County Regional Office of Education #51 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 Sangamon County Regional Office of Education #51's internal control over compliance
with the requirements that could have a direct and material effect on a major federal program to
1413 Wabash Avenue•9dattoon, IL 61938
Phone: (217)234-8801 Fax: (217) 234-8803 kempercpa.com
detenrtine 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 Sangamon County Regional Office of
EducaJion #51's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above.
This report is intended solely for the information and use of the Auditor General, the General Assembly,
the Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois
State Board of Education, federal awarding agencies, and pass-through entities and is not intended to be
and should not be used by anyone other than these specified parties.
Certified Public Accountants and Consultants
Mattoon, Illinois
January 30, 2012
.10
SANGAMON COUNTI
REGIONAL OFFICE OF EDUCATION #51
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION I-SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deficiency(ies) identified that are not considered to
be material weakness(es)?
• Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
• Material weakness(es) identified?
• Significant deficiency(ies) identified that are not considered to
be material weakness( es )?
Yes
No
No
No
No
Type of auditor's report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in accordance
with OMB Circular A-133, Section 510(a)? No
Identification of major programs:
CFDA Number(s)
84.01 OA & 84.389A
84.410A
Name of Federal Program or Cluster
Title I - Part A Cluster
ARRA - Education Jobs Fund
Dollar threshold used to distinguish between Type A and Type B programs: $300,000
Auditee qualified as a low-risk auditee? No
11
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION II- FINANCIAL STATEMENT FINDINGS
Finding No. 11-01 - Controls Over Financial Statement Preparation (Repeated from Finding
10-01, 09-01, 08-01 & 07-01)
Criteria/specific requirement:
The Regional Office of Education #51 is required to maintain a system of controls over the
preparation of financial statements in accordance with generally accepted accounting principles
(GAAP). The Regional Office's 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 of Education #51 does not have sufficient internal controls over the financial
reporting process. The Regional Office maintains their accounting records on the cash basis of
accounting. While the Regional Office maintains controls over the processing of most accounting
transactions, there are not sufficient controls over the preparation of the GAAP based financial
statements for management or employees in the normal course of performing their assigned
functions to prevent or detect financial statement misstatements and disclosure omissions in a
timely manner. For example, auditors, in their review of the Regional Office's accounting records,
noted the following:
Effect:
• The Regional Office's financial information required numerous adjusting entries to present
the financial statements in accordance with generally accepted accounting principles.
• The Regional Office did not have adequate controls over the maintenance of complete records
of accounts receivable, accounts payable, or deferred revenue. While the Regional Office did
maintain records to indicate the balances of accounts payable, accounts receivable, and
deferred revenue, no entries were provided to reconcile the Regional Office of Education
#51's grant activity, such as posting grant receivables and deferred revenue.
Management or employees in the normal course of performing their assigned functions may not
prevent or detect financial statement misstatements and disclosure omissions in a timely manner.
Cause:
According to Regional Office officials, they did not have adequate funding to hire and/or train their
accounting personnel in order to comply with these requirements.
12a
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION II- FINANCIAL STATEMENT FINDINGS (Continued)
Finding No. 11-01 - Controls Over Financial Statement Preparation (Repeated from Finding
10-01, 09-01, 08-01 & 07-01) (Concluded)
Auditor's Recommendation:
As part of its internal control over the preparation of its financial statements, including disclosures,
the Regional Office of Education #51 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 a properly trained individual(s) possessing a
thorough understanding of applicable generally accepted accounting principles, GASB
pronouncements, and knowledge of the Regional Office of Education's activities and operations.
Management's Response:
The Regional Office understands the nature of this finding and realizes that this circumstance is not
unusual in an organization of this size. The Regional Office of Education staff has a reasonable
understanding of the fmancial statements and can determine that the information in the financial
statements is accurate, however, they lack the ability to prepare the notes to the financial
statements. The recommendation that "such procedures should be performed by a properly trained
individual(s) possessing a thorough understanding of applicable generally accepted accounting
principles, GASB pronouncements, and knowledge of the Regional Office's activities and
operations," has been noted by this office. We will continue to work with the other Regional
Offices of Education to determine the most effective method of ensuring that our employees
possess the knowledge required to compile the necessary GAAP based financial statements.
12b
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION III - FEDERAL AWARD FINDINGS
INSTANCES OF NONCOMPLIANCE:
NONE
SIGNIFICANT DEFICIENCIES:
NONE
13
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTION PLAN FOR CURRENT-YEAR AUDIT FINDINGS
JUNE 30, 2011
Corrective Action Plan
Finding No. 11-01 - Controls Over Financial Statement Preparation (Repeated from Finding
10-01, 09-01, 08-01 & 07-01)
Condition:
The Regional Office of Education #51 does not have sufficient internal controls over the
financial reporting process. The Regional Office maintains their accounting records on the cash
basis of accounting. While the Regional Office maintains controls over the processing of most
accounting transactions, there are not sufficient controls over the preparation of the GAAP based
financial statements for management or employees in the normal course of performing their
assigned functions to prevent or detect financial statement misstatements and disclosure
omissions in a timely manner. For example, auditors,. in their review of the Regional Office's
accounting records, noted the following:
Plan:
• The Regional Office's financial information required numerous adjusting entries to present
the financial statements in accordance with generally accepted accounting principles.
• The Regional Office did not have adequate controls over the maintenance of complete
records of accounts receivable, accounts payable, or deferred revenue. While the Regional
Office did maintain records to indicate the balances of accounts payable, accounts
receivable, and deferred revenue, no entries were provided to reconcile the Regional Office
of Education #51's grant activity, such as posting grant receivables and deferred revenue.
The Regional Office understands the nature of this finding and realizes that this circumstance is
not unusual in an organization of this size. The Regional Office of Education staff has a
reasonable understanding of the financial statements and can determine that the information in
the financial statements is accurate, however, lacks the ability to prepare the notes to the financial
statements. The recommendation that "such procedures should be performed by a properly
trained individual(s) possessing a thorough understanding of applicable generally accepted
accounting principles, GASB pronouncements, and knowledge of the Regional Office's activities
and operations," has been noted by this office. We will continue to work with the other Regional
Offices of Education to determine the most effective method of ensuring that our employees
possess the knowledge required to compile the necessary GAAP based financial statements.
Anticipated Date of Completion:
Not Applicable
Contact Person Responsible for Corrective Action:
Honorable Jeff Vose, Regional Superintendent of Schools
14a
Finding No.
10-01
10-02
10-03
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Condition
Controls Over Financial Statement Preparation
Inadequate Internal Control Procedures
Departure from Generally Accepted
Accounting Principles
15
Current Status
Repeated
Corrected
Corrected
MANAGEMENT'S DISCUSSION AND ANALYSIS
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Sangamon County Regional Office of Education #51 provides this Management's Discussion and
Analysis of its financial statements. This narrative overview and analysis of the financial activities is
for the fiscal year ended June 30, 2011. We encourage readers to consider this information in
conjunction with the Agency's financial statements, which follow.
This report will include past year financial activity, along with fiscal year 2011 activity, making
comparisons of the financial position and results of operations more meaningful.
Financial Highlights
• General Fund revenues increased from $685,892 in fiscal year 2010 to $1 ,178,981 in fiscal
year 2011, while the expenditures increased from $845,098 in fiscal year 2010 to $1,262,727
in fiscal year 2011. The Regional Office experienced an increase in the General Fund balance
from $317,187 in fiscal year 2010 to $995,271 in fiscal year 2011.
• The Education Fund balance decreased from $102,687 in fiscal year 2010 to $ (4,203) in
fiscal year 2011. Education Fund revenues increased from $1,679,702 in 2010 to $1,841,645
in 2011, and expenditures decreased from $2,170,163 in 2010 to $1,314,057 in 2011.
• During fiscal year 2011 , the Regional Office of Education #51 implemented Governmental
Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, which required certain programs and funds to be
reclassified and the restatement of beginning fund balances as detailed in Note 15 to the
financial statements. Because of these reclassifications, the fund analysis is not comparable
between fiscal year 2010 and fiscal year 2011.
Using This 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 Sangamon
County Regional Office of Education #51 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.
• Supplementary 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.
16a
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Reporting the Agency as a Whole
The Statement of Net Assets and the Statement of Activities
The government-wide statements report information about the Sangamon County Regional Office of
Education #51 as a whole using accounting methods similar to those used by private-sector
companies. The Statement of Net Assets includes all of the Sangamon County ROE #51 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 nonfinancial 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 Offic.e'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 of Education #51 established other funds to control and
manage money for particular purposes.
The Regional Office has three types of fund classifications:
1) Governmental funds account for a majority of the Regional Office's services. These
focus on how cash and other fmancial 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 funds' 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 of Education #51
charges fees under a cost-reimbursement method. These fees cover the costs of certain
services and workshops it provides.
The proprietary funds' required financial statements include a Statement of Net
Assets, a Statement of Revenues, Expenses, and Changes in Fund Net Assets, and a
Statement of Cash Flows.
16b
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2011
Reporting the Agency as a Whole (Concluded)
3) Fiduciary funds account for services for which the Sangamon County Regional Office
of Education #51 acts as fiscal agent for individuals and private or governmental
organizations.
The fiduciary funds' required fmancial statements include a Statement of Fiduciary
Net Assets.
A summary reconciliation between the government-wide financial statements and the fund financial
statements is included in the basic financial statements.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of financial position. Sangamon
County Regional Office of Education #51's net assets at the end of fiscal year 2010 totaled
$1,256,481. At the end of fiscal year 2011, the net assets were $1,321,606. The analysis that follows
provides a summary ofthe Regional Office's net assets at June 30, 2011 and 2010.
ASSETS
Current assets
Capital assets, net of
depreciation
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
Investments in capital
assets, net of related
debt
Unrestricted (deficit)
Restricted for
educational
purposes
TOTAL NET ASSETS
CONDENSED STATEMENT OF NET ASSETS
June 30, 2011 and 2010
Governmental Business-type
Activities Activities Total
2011 2010 2011 2010 2011 2010
$1,503,621 $ 1,765,444 $ 13,805 $(5,146) $1,517,426 $ 1,760,298
8.635 13,287 7 767 10.150 16.402 23.437
$ 1.512.256 $ 1.778.731 $ 21.572 $ 5.004 $ 1.533.828 $ 1.783.7.15.
$ 209.908 $ 524,754 $ 2,314 $ 2.500 $ 212.222 $ 527.254
209,908 524,754 2,314 2500 212,222 527,254
8,635 13,287 7,767 10,150 16,402 23,437
1,003,798 1,034,612 11,491 (7,646) 1,015,289 1,026,966
289,915 206,078 289,915 206,078
$ 1.302.3~8 $ 1.253/211 $ 12.258 $ 2.50~ $ 1.321.606 $ 1.256.~8 1
16c
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Government-Wide Financial Analysis (Continued)
The Regional Office of Education's net assets increased by $65,125 from fiscal year 2010 to fiscal
year 2011.
The following analysis shows the changes in net assets for the years ended June 30, 2011 and 2010.
CHANGES IN NET ASSETS
For the Years Ended June 30,2011 and 2010
Governmental Business-type
Activities Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services $ - $ - $ 73,019 $77,789 $ 73,019 $ 77,789
Operating grants &
contributions 1,305,878 1,901,485 1,305,878 1,901,485
General Revenues:
Transfers in (out) (316) 316
Local sources 1,020,666 894,528 1,020,636 894,528
State sources 394,628 236,391 394,658 236,391
Federal sources 99,395 99,395
On-behalf payments 585,390 599,482 585,390 599,482
Investment income 2,377 133 2 377 133
Total revenues 3.308,939 3,731.098 73,019 78,105 3,381,958 3,809.203
Expenses:
Salaries and benefits 1,497,827 1,295,764 17,437 40,176 1,515,264 1,335,940
Purchased services 1,006,299 1,677,456 32,073 36,491 1,038,372 1,713,947
Supplies and materials 161,819 163,164 52 3,459 161,871 166,623
Depreciation 5,770 6,353 2,383 1,762 8,153 8,115
Other objects 3,463 23,951 4,320 1,050 7,783 25,001
On-behalf payments 585,390 599,482 585.390 599,482
Total expenses 3.260,568 3,766,170 56,265 82,938 3,316,833 3,849,108
Change in net assets 48,371 (35.072) 16.754 (4,833) 65,125 (39,905)
Net Assets - beginning,
restated 1,253,977 1.289.049 2,504 7.337 1,256,481 1.296,386
Net Assets - ending $ 1 302.3~ .U.2S3,211 $ 12,258 $ 2,S!H $ 1.321,6!16 $_1,256 481
16d
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Government-Wide Financial Analysis (Continued)
Governmental Activities
Revenues for governmental activities were $3,308,939 and expenses were $3,260,568. The decrease
in revenues and expenses is due to significant reductions in operating grants of the Truants
Alternative and Optional Education Program and the Regional Safe Schools Program. Although
interest rates remain low, interest income increased significantly by moving funds to a different
financial institution.
Financial Analysis of the Ree:ional Office of Education #51 Funds
As previously noted, the Regional Office of Education #51 uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. The Regional Office's
governmental funds reported combined fund balances of$1,261,998.
Governmental Fund Highlights
• In 2003, the Governor of the State of illinois line item vetoed a portion of the state financial
support for school services. This veto resulted in a 51% reduction in dollars received. In
2010-2011 this funding was further reduced by approximately 10% and continued funding is
expected to decrease.
• County support for the Regional Office of Education #51 remained level from 2010 to 2011.
A vacant position has not been filled. A slight increase in funding a part-time support
position is expected for fiscal year 2012.
• Although grant funding decreased due to budget constraints, the Regional Office of
Education #51 was successful in obtaining continued funding for the Truants Alternative and
Optional Education and the Regional Safe Schools Programs.
• The State of Illinois financial deficit continues to reflect negatively in the ability of the
Regional Office to obtain grants necessary for stable or continued growth; however, the
Regional Office continues to cooperate with the Illinois State Board of Education and other
agencies to procure funding for education programs.
Proprietary Fund Highlights
Revenues for the Regional Office of Education #51's business-type activities and expenses combined
for a total net asset balance of $19,258. The Regional Office is committed to providing quality
professional development opportunities for Sangamon County teachers, at a reasonable cost, while
maintaining the integrity of the fund. The SDC Workshop Fund is designed to be self-supporting by
setting fee schedules that will support expenses incurred to provide professional development
workshops for area teachers. Fees will be adjusted from year to year to parallel fund activity. The
Regional Office also continues to provide background checks/fingerprinting services for new hires
and all substitute teachers in the County schools. This activity is recorded in the Background Check
Fund.
16e
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Budgetary Highlights
The Regional Office of Education #51 annually adopts budgets for several funds when required by
the granting agency. The Regional Superintendent annually prepares an Office Operations Budget
and submits it to the County Board members for their approval. The Sangamon County Office
Operations Budget covers a fiscal year of December 1 through November 30. All grant budgets are
prepared by the Regional Office of Education #51 and submitted to the granting agency for approval.
Amendments must be submitted under guidelines established by the granting agency. Schedules
showing the budget amounts compared to the Regional Office's actual financial activity are included
in the supplementary information of this report.
Capital Assets
Capital assets of the Regional Office of Education #51 include office equipment, computers, audio­visual
equipment, and office furniture. The Regional Office of Education #51 maintains an inventory
of capital assets which have been accumulated over time. The Regional Office of Education #51's
ending net capital asset balance for fiscal year 2011 is $16,402, which is the total original cost ofthe
capital assets less accumulated depreciation. More detailed information about capital assets is
available in Note 9 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 used in the calculation of general state aid remains
at $6,119 per student for fiscal year 2011, which is payable in fiscal year 2012.
• The interest rate on investments remains low and will continue to impact interest earned.
• Several grants have remained near or at previous funding levels. In addition, the School
Services funding, which provides professional development opportunities to Sangamon
County teachers, continues to suffer funding cuts.
• The State of Illinois financial crisis results in cuts to State programs and significant
delays in payments.
• County Board support of the Regional Office of Education #51 will remain consistent for
fiscal year 2012.
• The number of students served by the Regional Office of Education #51 is expected to
increase.
Contacting the Regional Office's Financial Management
This financial report is designed to provide the Regional Offic.e's citizens, taxpayers, clients, and
other constituents with a general overview of its finances and to demonstrate accountability for the
money it receives. If the reader has questions concerning this report or needs additional financial
information, please contact the Regional Superintendent of the Regional Office of Education #51, at
200 South 91
h St., Room 303, Springfield, IL 62701.
16f
BASIC FINANCIAL STATEMENTS
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF NET ASSETS
JUNE 30, 2011
Primary Government
Governmental Business-Type
Activities Activities
ASSETS
Current Assets:
Cash and cash equivalents $ 641,177 $ 16,696
Due from (to) other funds 2,891 (2,891)
Due from other governments:
Local 429,501
State 308,764
Federal 121,288
Total Current Assets 1,503,621 13,805
Noncurrent Assets:
Capital assets, being depreciated, net 8,635 7,767
Total Noncurrent Assets 8,635 7,767
TOTAL ASSETS 1,512,256 21,572
LIABILITIES
Current Liabilities:
Accounts payable 67,783 2,314
Accrued payroll and benefits 86,110
Due to other governments:
State 7,500
Deferred revenue 48,515
Total Current Liabilities 209,908 2,314
NET ASSETS
Invested in capital assets 8,635 7,767
Restricted for educational purposes 289,915
Unrestricted 1,003,798 11,491
TOTAL NET ASSETS $ 1,302,348 $ 19,258
The notes to the fmancial statements are an integral part of this statement.
17
Total
$ 657,873
429,501
308,764
121,288
1,517,426
16,402
16,402
1,533,828
70,097
86,110
7,500
48,515
212,222
16,402
289,915
1,015,289
$ 1,321,606
FUNCTIONS/PROGRAMS
Primary Government:
Governmental Activities:
Instructional Services
Salaries and benefits
Purchased services
Supplies and materials
Other objects
Depreciation expense
Capital outlay
Administrative:
On-behalf payments - Local
On-behalf payments - State
Total Governmental Activities
Business-Type Activities:
Service fe.es
Total Business-Type Activities
TOTAL PRIMARY GOVERNMENT
$
$
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Program Revenues
Operating
Charges for Grants and
Expenses Services Contributions
1,497,827 $ $ 687,427
1,006,299 555,259
161,819 62,074
3,463
5,770
1,118
242,338
343,052
3,260,568 1,305,878
56,265 73,019
56,265 73,019
3,316,833 $ 73,019 $ 1,305,878
GENERAL REVENUES:
Local sources
State sources
On-behalf payments - Local
On-behalf payments - State
Investment earnings
Total General Revenues
CHANGE IN NET ASSETS
NET ASSETS - BEGINNING
NET ASSETS - ENDING
Net (Expense) Revenue and
Changes in Net Assets
Primary Govenunent
Governmental Business-Type
Activities Activities Total
$ (810,400) $ $ (810,400)
(451,040) (451,040)
(99,745) (99,745)
(3,463) {3,463)
(5,770) (5,770)
1,118 1,118
(242,338) {242,338)
{343,052} {343,052)
(1,954,690) (1 ,954,690)
16,754 16,754
16,754 16,754
(l ,954,690) 16,754 (I ,937,936)
1,020,666 1,020,666
394,628 394,628
242,338 242,338
343,052 343,052
2,377 2,377
2,003,061 2,003,061
48,371 16,754 65,125
1,253,977 2,504 1,256,481
$ 1,302,348 $ 19,258 $ 1,321,606
The notes to the fmancial statements are an integral part of this s1tatement.
18
ASSETS
Cash and cash equivalents $
Due from other funds
Due from other governments:
Local
State
Federal
TOTAL ASSETS $
LIABILITIES
Accounts payable $
Accrued payroll and benefits
Due to other funds
Due to other governments:
State
Deferred revenue
Total Liabilities
FUND BALANCE (DEFICIT)
Restricted
Assigned
Unassigned
Total Fund Balance
(Deficit)
TOTAL LIABILITIES AND
FUND BALANCE (DEFICIT) $
SANGAMON COUNlY
REGIONAL OFFICE OF EDUCATION #51
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2011
CookCnunty Nonmajor
General Education General F..ducation Special Revenue
Fund Institute Fund DeveloEment
288,512 $ 230,431 $ 111,546 $ $
737,462
30,338 33,530 365,633
308,764
121,288
1,056,312 $ 230,431 $ 575,128 $ 365,633 $
62 $ $ 49,311 $ 18,410 $
46,468 39,642
417,159 314,444
7,500
14,511 65,719
61,041 579,331 332,854
230,431 10,812 32,779
632,748 1,527
362,523 {16,542)
995,271 230,431 (4,2032 32,779
1,056,312 $ 230,431 $ 575,128 $ 365,633 $
The notes to the financial statements are an integral part of this statement
19
Funds
10,688
10,688
2,968
2,968
10,688
(2,968)
7,720
10,688
Total
Governmental
Eliminations Funds
$ $ 641 ,177
(734,571) 2,891
429,501
308,764
121,288
$ {734,571) $ 1,503,621
$ $ 67,783
86,110
(734,571)
7,500
80,230
{734,5712 241,623
284,710
634,275
343,013
1,261,998
$ (734,571~ $ 1,503,621
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
JUNE 30, 2011
TOTAL FUND BALANCES- GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement of Net Assets are
different because:
Capital assets used in governmental activities are not
financial resources and, therefore, are not reported in the funds.
Some revenues will not be collected for several months after the Regional
Office's fiscal year ends, they are not considered "available" revenues
and are deferred in the governmental funds.
FYll revenue deferred
NET ASSETS OF GOVERNMENTAL ACTIVITIES
The notes to the financial statements are an integral part of this statement.
20
$ 1,261,998
8,635
31,715
$ 1,302,348
SANGAMON COUN1Y
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF REVENUES, EXPENDI'IURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR 1HE YEAR ENDED JUNE 30, 2011
Cook County Nonmajor Total
General Education General Education Special Revenue Governmental
Fund Institute Fund DeveloEment Funds Eliminations Funds
REVENUES
Local sources $ 96,389 $ 56,571 $ 6,326 $ 838,266 $ 23,114 $ $ 1,020,666
On-behalf payments- Local 242,338 242,338
State sources 497,202 991,249 1,440 1,489,891
On-behalf payments - State 343,052 343,0S2
Federal sources 844,070 844,070
Total Revenues 1,178,981 56,571 1,841,645 838,266 24,554 3,940,017
EXPENDITURES
Instructional Services:
Salaries and benefits 476,277 3,994 700,158 289,637 27,761 1,497,827
Purchased services 185,849 27,445 544,922 243,364 4,719 1,006,299
Supplies and materials 14,519 995 67,859 73,426 5,020 161,819
Other objects 692 2,771 3,463
On-behalf payments- Local 242,338 242,338
On-behalf payments- State 343,052 343,052
Capital outlay 1,118 1,118
Total Expenditures 1,262,727 32,434 1,314,057 609,198 37,500 3,255,916
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (83,746~ 24,137 527,588 229,068 ~12,946~ 684,101
OTHER FINANCING SOURCES (USES):
Transfers in 120,272 41,330 2,766 (164,368)
Transfers out (39,095) (88) (33,181) (87,571) (4,433) 164,368
Interest 2,022 304 51 2,377
Total Other Financing Sources (Uses) 83,199 216 8,200 (87,571) (1,667) 2,377
NET CHANGE IN FUND BALANCE (547) 24,353 535,788 141,497 (14,613) 686,478
FUND BALANCE (DEFICIT)- BEGINNING,
RESTATED 995,818 206,078 ~539,9912 ~108,718~ 22,333 575,520
FUND BALANCE- ENDING $ 995,271 $ 230,431 $ (4,203) $ 32,779 $ 7,720 $ $ 1,261,998
The notes to the financial statements are an integral part of this statement
21
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
RECONCILIATION OF THE STATEMENf OF REVENUES, EXPENDITIJRES,
AND CHANGES IN FUND BALANCES TO TiiE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2011
NET CHANGE IN FUND BALANCES-GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement 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 cKpense
Some revenues will not be collected for several months after the Regional
Office's fiscal year ends, they are not considered "available" revenues
and are deferred in the governmental funds.
FYI 0 deferred revenue recognized in FY 11
FYII revenue deferred
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
The notes to the financial statements are an integral part of this statement.
22
$ 1,118
(5,770)
$
$
686,478
(4,652)
(665,170)
31,715
48,371
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2011
Business-Type Activities -
Ente!Erise Funds
Nonmajor
Enterprise Funds Total
ASSETS
Current assets:
Cash and cash equivalents $ 16,696 $
Total current assets 16,696
Noncurrent assets:
Capital assets, being depreciated, net 7,767
Total noncurrent assets 7,767
TOTAL ASSETS 24,463
LIABILITIES
Accounts payable 2,314
Due to other funds 2,891
TOTAL LIABILITIES 5,205
NET ASSETS
Invested in capital assets 7,767
Unrestricted 11,491
TOTAL NET ASSETS $ 19,258 $
The notes to the financial statements are an integral part of this statement.
23
16,696
16,696
7,767
7,767
24,463
2,314
2,891
5,205
7,767
11,491
19,258
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 201 1
Business-Type Activities -
Enterprise Funds
Nonmajor
Enterprise Funds
OPERA T!NG REVENUES
Charges for services $ 73,019 $
Total Operating Revenues 73,019
OPERATING EXPENSES
Salaries and benefits 17,437
Purchased services 32,073
Supplies and materials 52
Other objects 4,320
Depreciation expense 2,383
Total Operating Expenses 56,265
OPERATING INCOME 16,754
TOTAL NET ASSETS - BEGINNING 2,504
TOTAL NET ASSETS - ENDING $ 19,258 $
The notes to the financial statements are an integral part of this statement.
24
Total
73,019
73,019
17,437
32,073
52
4,320
2,383
56,265
16,754
2,504
19,258
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Business-Type Activities -
Enterprise Funds
Nonmajor
Enterprise Funds Totals
Cash flows from operating activities:
Receipts from customers $ 73,019 $
Payments to suppliers and providers of goods
and services (36,631)
Payments to employees (17,437)
Net cash provided by operating activities 18,951
Cash flows from noncapital financing activities:
Decrease in interfund borrowjng, net (2,255)
Net cash used for noncapital
financing activities (2,255)
Net increase in cash and cash equivalents 16,696
Cash and cash equivalents- Beginning
Cash and cash equivalents - Ending $ 16,696 $
Reconciliation of operating income to net cash
provided by operating activities:
Operating income $ 16,754 $
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense 2,383
Decrease in accounts payable (186)
Net cash provided by operating activities $ 18,951 $
The notes to the financial statements are an integral part of this statement.
25
73,019
(36,631)
(17,437)
18,951
(2,255)
(2,255)
16,696
16,696
16,754
2,383
(186)
18,951
ASSETS
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
JUNE 30,2011
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
Due to other governments
TOTAL LIABILITIES
Agency
Funds
$ 104,812
$ 104,812
$ 104,812
$ 104,812
The notes to the financial statements ate an integral part of this statement.
26
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Sangamon County Regional Office of Education #51 was formed under the provisions of the State
of Illinois, Illinois State Board of Education.
In 2011, the Regional Office ofEducation #51 implemented Governmental Accounting Standards Board
(GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, GASB
Statement No. 59, Financial Instruments Omnibus, and GASB Statement No. 62, Codification of
Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and A/CPA
Pronouncements. The Regional Office of Education #51 implemented these standards during the current
year; however, GASB Statements No. 59 and 62 had no impact on the financial statements. The
implementation of GASB Statement No. 54 changed fund balance reporting for governmental funds by
adding some additional fund balance classifications, clarifying governmental fund type definitions, and
providing additional disclosures on how fund balance constraints are imposed and may be modified or
eliminated.
A. DATE OF MANAGEMENT'S REVIEW
Management has evaluated subsequent events through January 30, 2012, the date when the financial
statements were available to be issued.
B. FINANCIAL REPORTING ENTITY
The Regional Superintendent is charged with responsibility for township fund lands; registration of the
names of applicants for scholarships to State controlled universities; examinations and related duties;
visitation of public schools; direction of teachers and school officers; to serve as the official advisor and
assistant of school officers and teachers; to conduct teachers institutes as well as to aid and encourage
the formation of other teachers' meetings and assist in their management; to evaluate the schools in the
region; to examine evidence of indebtedness; to file and keep the returns of elections required to be
returned to the Regional Superintendent's office; and to file and keep the reports and statements returned
by school treasurers and trustees.
The Regional Superintendent is also charged with the responsibilities of conducting a special census,
when required; providing notice of money distributed to treasurers, board presidents, clerks, and
secretaries of the school districts on or before each September 30; maintenance of a map and numbering
of the Regional Office of Education #51's districts; providing township treasurers with a list of district
treasurers; to inspect and approve building plans which comply with State law; to perform and report on
annual building inspections; to investigate bus drivers for valid bus driver permits and take related action
as may be required; to maintain a list of unfilled teaching positions and to carry out other related duties
required or permitted by law.
27
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. FINANCIAL REPORTING ENTITY (Concluded)
The Regional Superintendent is responsible for inspection and approval or rejection of school treasurers'
bonds. The Regional Superintendent is also required to provide the State Board of Education with an
affidavit showing that the treasurers of school districts within the region are properly bonded.
The Regional Superintendent is also responsible for apportionment and payment of funds received from
the State for the districts in the region, or see that no payments are made unless the treasurer has filed or
renewed appropriate bond and that the district has certified publication of the annual financial report.
The Regional Superintendent is required to provide opinions and advice related to controversies under
school law.
For the period ended June 30, 2011, the Regional Office of Education #51 applied for, received, and
administered numerous state and federal programs and grants in assistance and support of the
educational activities of the school districts in Regional Office of Education #51. Such activities are
reported as a single special revenue fund (Education Fund).
C. SCOPE OF THE REPORTING ENTITY
The Regional Office of Education #51's reporting entity includes all related organizations for which they
exercise oversight responsibility.
The Regional Office of Education #51 has developed criteria to determine whether outside agencies with
activities which benefit the citizens of the region, including districts or joint agreements which serve
pupils from numerous regions, should be included in its financial reporting entity. The criteria include,
but are not limited to, whether the Regional Office of Education #51 exercises oversight responsibility
(which includes financial interdependency, selection of governing authority, designation of management,
ability to significantly influence operations, and accountability for fiscal matters), scope of public
service, and special financing relationships.
The districts and joint agreements have been determined not to be a part of the reporting entity after
applying the manifesting of oversight, scope of public service, and special financing relationships criteria
and are therefore excluded from the accompanying financial statements because the Regional Office of
Education #51 does not control the assets, operations, or management of the districts or joint
agreements. In addition, the Regional Office of Education #51 is not aware of any entity, which would
exercise such oversight as to result in the Regional Office of Education #51 being considered a
component unit of the entity.
28
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Statement of Net Assets and the Statement of Activities are government-wide financial statements.
They report information on all of the Regional Office of Education #51's activities with most of the
interfund activities removed. Governmental activities include programs supported primarily by state and
federal grants and other intergovernmental revenues. The Regional Office of Education has two
business-type activities that rely on fees and charges for support.
The Regional Office of Education #51's government-wide financial statements include a Statement of
Net Assets and a Statement of Activities. These statements present a summary of governmental and
business-type activities for the Regional Office of Education #51 accompanied by a total column. These
statements are presented on an "economic resources" measurement focus as prescribed by GASB
Statement No. 34. All of the Regional Office of Education #51's assets and liabilities, including capital
assets, are included in the accompanying Statement of Net Assets. The Statement of Activities
demonstrates the degree to which the direct expenses of a given function are offset by program revenues.
Direct expenses are those that are clearly identifiable with a specific function, Program revenues include
(1) charges for services, and (2) grants and contributions that are restricted to meeting operational or
capital requirements of a particular function.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds are reported as separate columns in the fund financial statements.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, such as payables, receivables, and transfers. Interfund activities between governmental funds
and between governmental funds and proprietary funds appear as due to/due from on the Governmental
Fund Balance Sheet and Proprietary Fund Statement of Net Assets and as other resources and other uses
on the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and on
the Proprietary Fund Statement of Revenues, Expenses and Changes in Fund Net Assets. All interfund
transactions between governmental funds and between governmental funds and internal service funds are
eliminated on the government-wide financial statements. Interfund activities between governmental
funds and business-type funds remain as due to/due from on the government-wide financial statements.
All internal balances in the Statement of Net Assets have been eliminated except those representing
balances between the governmental activities and the business-type activities. In the Statement of
Activities, internal service fund transactions have been eliminated; however, those transactions between
governmental and business-type activities have not been eliminated.
The purpose of interfund borrowing and permanent transfers is to cover temporary or permanent
shortfalls in cash flow within grant programs and funds.
29
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. PROPRIETARY FUND FINANCIAL STATEMENTS
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues,
Expenses, and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary
fund and nonmajor funds aggregated.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual
basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included
on the Statement of Net Assets. The Statement of Revenues, Expenses, and Changes in Fund Net Assets
present increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of
accounting, revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are
those expenses that are essential to the primary operations of the fund. All other expenses are reported as
nonoperating expenses.
F. GOVERNMENTAL FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues,
Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund
balances and changes in fund balances as presented in these statements to the net assets and changes in
net assets presented in the government-wide financial statements.
The governmental fund financial statements have been prepared in accordance with generally accepted
accounting principles on the modified accrual basis. Under the modified accrual basis of accounting,
revenues are recorded when susceptible to accrual i.e., both measurable and available. Available means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current
period. Revenues received more than 60 days after the end of the current period are deferred in the
governmental fund financial statements but are recognized as current revenues in the government-wide
financial statements. Expenditures are recognized in the accounting period in which the fund liability is
incurred, if measurable, except expenditures for prepaid expenses, and other long-term obligations,
which are recognized when paid.
30
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned, and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the grantor have been
met.
The governmental fund financial statements focus on the measurement of spending, or "financial flow,"
and the determination of changes in financial position rather than upon net income determination. This
means that only current assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered a measure of "available spendable resources."
Governmental fund operating statements present increases (revenues and other financing sources) and
decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to
present a summary of sources and uses of "available spendable resources" during a period.
In applying the susceptible-to-accrual concept to intergovernmental revenues, the legal and contractual
requirements of the numerous individual programs are used as guidance. There are however, essentially
two types of these revenues. In one, monies must be expended on the specific purpose or project before
any amounts will be paid to the Regional Office of Education #51; therefore, revenues are recognized
based upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of
expenditure and are usually recoverable only for failure to comply with prescribed compliance
requirements. These resources are reflected as revenue at the time of receipt or earlier if the susceptible­to-
accrual criteria are met.
Under the terms of grant agreements, Sangamon County Regional Office of Education #51 funds certain
programs by a combination of specific cost-reimbursement grants and general revenues. Thus, when
program expenses are incurred, there are both restricted and unrestricted funding resources available to
finance the program. It is the Regional Office of Education #51's policy to first apply restricted funds to
such programs, then unrestricted funds. For unrestricted funds, committed funds are used first, then
assigned funds, then unassigned funds if any.
H. FUND ACCOUNTING
The Regional Office of Education #51 uses funds to maintain its financial records during the year. A
fund is defined as a fiscal and accounting entity with a self-balancing set of accounts. The Regional
Office of Education #51 uses governmental, proprietary, and fiduciary funds.
31
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Continued)
GOVERNMENTAL FUNDS
Governmental funds are those through which most governmental functions typically are reported.
Governmental funds reporting focuses on the sources, uses and balances of current financial resources.
Expendable assets are assigned to the various governmental funds according to the purpose for which
they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The
difference between governmental fund assets and liabilities is reported as fund balance.
As prescribed by GASB Statement No. 34, governmental fund reporting focuses on the major funds,
rather than on the fund type. There is a two-step process for determining if a fund should be reported as
a major fund: (1) total assets, liabilities, revenues, or expenditures/expenses (excluding extraordinary
items) of an individual fund are at least 10% of the corresponding total for the fund type, and (2) total
assets, liabilities, revenues, or expenditures/expenses (excluding extraordinary items) of an individual
fund are at least 5% of the corresponding total for the total of all governmental and proprietary funds
combined. Funds that do not meet the major fund determination requirements are reported in aggregate
as nonmajor funds. The Regional Office of Education #51 has presented all major funds that met the
above qualifications.
The Regional Office of Education #51 reports the following major governmental funds:
General Fund - The General Fund is the operating fund of the Regional Office of Education #51. It
is used to account for the expenditures which benefit all school districts in the region except those
required to be accounted for in other funds. General Funds include the following:
Local - These funds are generated through interest and fees earned for providing various
administrative functions for entities including the illinois State Board of Education, the
Technology Conference and Illinois Special Education Administrators and are used to assist
in providing for the needs of the Staff Development Center (SDC) not funded through State
or county dollars.
Administrative Discretionary - These funds are generated through interest and fees earned for
providing various administrative functions for entities including the Illinois State Board of
Education, the Technology Conference and Illinois Special Education Administrators and
are used to assist in providing for the needs of the Regional Office not funded through State
or county dollars.
Continuum of Learning - The Regional Office of Education has contracted with Springfield
Community Federation in an effort to ascertain how many children are entering the public
school system. This information will then be used to help individuals determine donation
arrangements.
32
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
General Fund (Concluded)
Those Who Excel- The ROE acts as the fiscal agent for the annual Teacher of the Year banquet
hosted by the lllinois State Board of Education .
. General State Aid- Truants Alternative Optional Education Program- This fund accounts for
General State Aid used for the general operations of the Truants Alternative Optional
Education Program.
General State Aid- Regional Safe Schools - This fund accounts for General State Aid used for
the general operations of the Regional Safe Schools program.
General Education Development (GED) Holistic Scoring - The Regional Office provides scoring
services for the written essay portion of the GED tests.
Major Special Revenue Funds - Special revenue funds are used to account for the proceeds of
specific revenue sources (other than fiduciary or major capital projects) that are legally restricted to
expenditures for specified purposes. Major special revenue funds include the following:
Institute Fund - The Teacher Institute Fund accounts for teacher registration fees. These funds
are to be used to defray expenses connected with improving the technology necessary for the
efficient processing of certificates as well as any expenses incidental to teacher institutes,
workshops, or meetings of a professional nature that are designed to promote the
professional growth of teachers. All funds generated remain restricted until expended only
on the aforementioned activities.
Cook County General Education Development (GED) - The Regional Office acts as the fiscal
agent for the General Education Development testing program for the Cook County area.
The Regional Office maintains an office and support staff in the Cook County area.
Education Fund - This fund is used to account for and report the proceeds of specific revenue
sources that are restricted by grant agreements or contracts to expenditures for specified
purposes supporting education enhancement programs as follows:
Regional Safe Schools - This program provides activities for disruptive students who are
eligible for suspension or expulsion. The activities provide individually designed
curriculum, social skills training, career exploration and work experience opportunities,
and opportunities to work toward re-entry into the traditional programs, if appropriate.
33
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
Education Fund (Continued)
School Directory - This program provides a directory that is published annually and
distributed to all Sangatnon County schools. The directory includes employee listings,
enrollment and demographic information of all Sangamon County schools, public and
private.
Kindergarten Learning Standards - This program's funds were generated through
collaboration between the Illinois State Board of Education and kindergarten teachers
throughout that State. This was the first opportunity for kindergarten teachers and
administrators to access the new standards specifically designed for kindergarten. In
addition to releasing the standards on Kindergarten Day, training sessions on the
standards are being provided at various locations throughout the State in collaboration
with the Illinois State Board of Education and Regional Offices of Education.
Preschool for All- This program's funds were generated to provide educational services to all
3- to 5-year-old children whose families choose to participate to ensure that all lllinois
children develop a strong foundation for learning.
Title I - Reading First Part B SEA -This program is designed to plan and implement Reading
First Academics and provide professional development for teachers in schools that are
participating in the Reading First program.
Area III - Homeless Liaison Project - This grant provides funds for providing information to
schools, community members, and governrnent entities about the educational rights of
homeless students.
Illinois Student Exchange - This exchange program is run by the Illinois State Board of
Education. It sends American students to Japan and brings Japanese students to our
country. The ROE serves as administrative agent for this program.
Sangamon County 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 the
student in the pursuit of their educational development. T AOEP 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.
34
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
Education Fund (Continued)
Certificate Renewal -This grant is provided by the illinois State Board of Education to assist
local professional development committees in fulfilling their responsibilities.
lllinois Department of Public Health (IDPH) Dental Sealant - This program, funded by the
Illinois Department of Public Health grant, provides funding to assist in providing a tooth
sealant program for low-income students in Sangamon County.
Early School Leaver Conference - This program, funded by the illinois State Board of
Education, holds workshops for individuals involved in programs for students who leave
the traditional school program before graduation.
Early Childhood - This program provides workshops to assist teachers working in the area of
early childhood development.
State and Federal School Breakfast and Lunch- This program is designed to provide breakfast
and lunch free or at reduced prices to eligible students, as determined in accordance with
federal and state guidelines, as a healthy start to the school day to enhance the student's
learning abilities. All meals provided must meet U.S. Department of Agriculture
requirements for servings and nutrition.
System of Support - This program provides professional development activities to schools
that are on Illinois's Academic Watch List. To be on the list, students 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.
Sangamon County Learning Academy (SCLA) Lunch - This program purchases lunches, from
donated funds, for students at the Sangamon County Learning Academy on days when
lunches were not provided or for students in need.
New Principal Mentoring - This program provides for the selection and training of
experienced principals to serve as mentors for new principals and for the new principals'
participation in the mentoring program designed for them. Funds flow through the
Illinois Principals Association from the Illinois State Board of Education.
Miscellaneous Federal Programs ITitle II- Teacher Quality and Title IV- Safe and Drug Free
Schools) - These programs account for the proceeds of a federal grant passed through the
Illinois State Board of Education to provide alcohol and drug education and to improve
teacher effectiveness in the classroom.
35
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Continued)
Education Fund (Continued)
Learn and Serve America - These funds are awarded to support service-learning programs
specifically for at-risk populations of suspended or expelled students participating in the
Regional Safe Schools Program.
Illinois Transition Planning Institute - The Illinois State Board of Education (ISBE) sponsors
a transition institute per the IDEA Part B State Performance Plan indicator 13, which
focuses on student-focused planning in secondary transition. The Institute was presented
in collaboration with the National Secondary Transition Technical Assistance Center and
the Illinois State University Department of Special Education. The Institute provides
information to school districts that met criteria for meeting secondary transition plan
requirements for special education students.
ISBE Initiatives - The Regional Office of Education contracts with ISBE to provide staff
support for Statewide education initiatives supported by the lllinois Mathematics and
Science Partnership Program and Enhancing Education Through Technology program as
well as other ISBE initiatives.
ISBE Special Education Task Force - The Regional Offic.e of Education contracts with ISBE
to provide consultant support for the work of the Special Education Task Force. This
program facilitates Task Force Meetings, provides technical assistance to the Task Force,
conducts research as required by the Task Force, and submits minutes for each Task
Force monthly meeting.
Reading Initiative - This fund provides for consultant support for initiatives necessitated by
the ARRA and the No Child Left Behind Act. The consultants read and evaluate the
quality of NCLB and ARRA applications for approval or create review checklist(s) for
needed initial application and amendments; provide technical assistance to Illinois
schools through written and verbal communication relating to NCLB and ARRA
applications; enforce Title I and state accountability requirements and review federal and
state fiscal and programmatic documentation to determine implications for schools and
districts.
36
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOVERNMENTAL FUNDS (Concluded)
Education Fund (Concluded)
ROE/ISC Operations - These funds are provided by the Illinois State Board of Education
through a budget application process to Regional Offices to provide staff development to
district schools and teachers. The SDC offers Administrator Academy activities, School
Improvement initiatives, and staff development opportunities in the areas of reading,
math, science, and technology. Monies are used for overhead costs and salaries of
employees at the StaffDevelopment Center.
Gifted Education - This program sponsors one or more Gifted Education Seminars in the
Regional Office's region of the State using a State-approved Gifted Education Seminar
trainer.
The Regional Office of Education #51 reports the following nonmajor governmental funds:
Nonmajor Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of
specific revenue sources (other than fiduciary or major capital projects) that are legally restricted to
expenditures for specified purposes. Nonmajor special revenue funds include the following:
General Education Development (GED) Certificate - illinois law requires the Regional
Superintendent of Schools of each county/counties to administer the GED test. The GED
tests are given at Lanphier High School once a month. Testing fees provide for testing
materials and staff salaries.
Bus Driver Training- 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 Regional Office.
Supervisory Expenses - This fund was developed by the General Assembly to help support the
day-to-day activities of the Regional Superintendent.
PROPRIETARY FUNDS
Proprietary Funds - The Proprietary Funds account for revenues and expenses related to services
provided to organizations inside the region on a cost-reimbursement basis. The Regional Office of
Education #51 reports the following proprietary funds:
SDC Workshop Fund- This fund is an enterprise fund established to track revenues received and
expenses incurred in offering professional development workshops for teachers and
administrators in Sangamon County.
37
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
PROPRIETARY FUNDS (Concluded)
Background Checks - The Regional Office of Education provides background
checks/fingerprinting to all schools in Sangamon County for new hires. The schools send
requests to the Regional Office of Education, who forwards background check information
to the Illinois State Police database. The fee for the background check and/or fingerprinting
is paid by each school district.
FIDUCIARY FUNDS
Agency Funds - Agency Funds are used to account for assets held by the Regional Office of
Education #51 in a trustee capacity or as an agent for individuals, private organizations, other
governmental units, and/or other funds. These funds are custodial in nature (assets equal liabilities)
and do not involve measurement of results of operations. Agency funds include the following:
Bilingual Directors Annual Meeting - The Regional Office of Education acts as the fiscal agent
for this annual meeting of Bilingual Directors, hosted by ISBE.
lllinois Education and Technology Conference- The Regional Office acts as the fiscal agent for
this annual conference, which provides an opportunity to discover how educators can be an
active part of the information revolution. Funding is derived from registration fees, vendor
fees, and sponsorship fees.
Sangamon County Schoolmasters - The Schoolmasters is an organization of all Sangamon
County superintendents and school directors. Membership fees are used to provide meetings
and seminars for disseminating current information on administration issues.
Director's Conference - The Regional Office acts as the fiscal agent for the annual
Superintendents Conference hosted by the lllinois State Board of Education.
University of Illinois at Springfield (UIS) Roundtable - The Regional Office acts as the treasurer
for the UIS Roundtable. This organization of Sangamon County school administrators
meets quarterly to discuss administrative issues. Membership fees provide food and
workshop materials.
Special Education Non-Public Conference- The Regional Office acts as the fiscal agent for the
Annual Conference on Best Practices and Guidelines for Non-Public Special Education
Programs hosted by the Dlinois State Board of Education.
38
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
FIDUCIARY FUNDS (Concluded)
Sangamon County Learning Academy - This is a self-supporting account that provides services
for students at the Sangamon County Learning Academy. Funds are derived from lunch
money and registration fees.
I. GOVERNMENTAL FUND BALANCES
Fund balance is the difference between assets and liabilities in a governmental fund. The following types
of fund balances may be presented in the Governmental Funds Balance Sheet and Governmental Funds
Combining Schedule of Accounts:
Nonspendable Fund Balance- The portion of a governmental fund's net assets that are not available
to be spent, either short term or long term, due to either their form or legal restrictions. The
Regional Office of Education #51 has no nonspendable fund balances.
Restricted Fund Balance - The portion of a governmental fund's net assets that are subject to
external enforceable legal restrictions. The Education Fund account New Principal Mentoring
has a fund balance which is restricted by grant agreements or contracts. The following funds are
restricted by illinois Statute: Institute Fund, Cook County General Education Development, Bus
Driver Training, and Supervisory Expenses funds.
Committed Fund Balance - The portion of a governmental fund's net assets with self-imposed
constraints or limitations that have been placed at the highest level of decision making. The
Regional Office of Education #51 has no committed fund balances.
Assigned Fund Balance- The portion of a governmental fund's net assets for which an intended use
of resources has been denoted. The accounts presented with assigned fund balances are specified
for a particular purpose by the Regional Superintendent. The following General Fund accounts
have assigned fund balances: General State Aid - Truants Alternative Optional Education
Program, General State Aid - Regional Safe Schools, and Those Who Excel. The Education
Fund account Illinois Department of Public Health Dental Sealant has an assigned fund balance.
Unassigned Fund Balance - A vail able expendable financial resources in a governmental fund that
are not designated for a specific purpose. The following General Fund accounts have unassigned
fund balances: Local, Administrative Discretionary, and General Education Development
Holistic Scoring. The following Education Fund accounts have unassigned fund balances: Area
III -Homeless Liaison Project, State and Federal School Breakfast and Lunch, and ROEIISC
Operations. The following Nonmajor Special Revenue Fund has an unassigned fund balance:
General Education Development Certificate.
39
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. NET ASSETS
Equity is classified as net assets and displayed in three components:
Invested in capital assets - Consists of capital assets, net of accumulated depreciation.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or
"invested in capital assets."
K. CASH AND CASH EQUIVALENTS
The Sangamon County Regional Office of Education #51's cash and cash equivalents are considered to
be demand deposits and short-term investments (investments with a maturity date of three months or
less). All interest income is recognized as revenue in the appropriate fund's Statement of Revenues,
Expenditures, and Changes in Fund Balance.
L. INVENTORY
Inventory is not recorded. The cost is recorded as an expenditure at the time individual inventory items
are purchased.
M. ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
40
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)
N. CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $1,000 or more and estimated useful lives
of greater than five years are reported at historical cost or estimated historical cost. Contributed assets
are reported at fair market value as of the date received. Additions, improvements, and other capital
outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for
repairs and maintenance are expensed as incurred.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Office Equipment and Furniture
Computer Equipment
Other Equipment
0. COMPENSATED ABSENCES
5-10 years
3-10 years
5-20 years
Noncertified and certified employees who work 12 calendar months can earn up to 20 vacation days for
a full year of service. In the event that a program terminates, no vacation days will be honored past the
ending date of the program. Certified employees who work less than 12 calendar months per year do not
earn vacation days. Because salaries are grant funded from year to year, all vacation time must be used
before the end of the fiscal year. An employee may request that a maximum of five days of unused
vacation be carried over to the next fiscal year. The Regional Office did not grant any such requests at
June 30, 2010 and 2011, therefore no vacation accruals have been made.
Employees receive up to 12 sick days annually, and the unused portion is accumulated up to 180 days
and carried forward. Employee sick leave is recorded when paid. Upon termination, employees do not
receive any accumulated sick leave pay, and therefore, no liability is accrued.
P. BUDGET INFORMATION
The Regional Office of Education #51 acts as the administrative agent for certain grant programs that are
accounted for in the Education Funds. Certain programs have separate budgets and are required to
report to the Illinois State Board of Education; however, none of the annual budgets have been legally
adopted nor are they required to be. Certain programs within the General Fund and Special Revenue
Funds do not have separate budgets. Comparisons of budgeted and actual results are presented as
supplementary information. Budgetary comparison schedules have been provided in supplementary
schedules for the following funds: Regional Safe Schools, Title I- Reading First Part B SEA, Area III­Homeless
Liaison Project, Sangamon County Truants Alternative Optional Education Program, System
of Support, Miscellaneous Federal Programs (Title II - Teacher Quality), Miscellaneous Federal
Programs (Title IV - Safe and Drug-Free Schools), Learn and Serve America, lllinois Transition
Planning Institute, ROE/ISC Operations, and Gifted Education.
41
NOTE2-CASH
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
The Regional Office of Education #51 does not have a formal investment policy. The Regional Office
of Education #51 is allowed to invest in securities as authorized by 30 ILCS 235/2 and 6 and 105 ILCS
5/8-7.
A. DEPOSITS
At June 30, 2011, the carrying amount of the Regional Office of Education #51 's government-wide
and Agency fund deposits were $657,873 and $104,812, respectively, and the bank balances were
$849,123 and $133,167, respectively. Of the total bank balances as of June 30, 2011, $20,000 was
secured by federal depository insurance, $954,821 was invested in U.S. Treasury securities and
repurchase agreements for such securities, and $7,469 was invested in the Illinois Funds Money
Market Fund.
CUSTODIAL CREDIT RISK
Custodial credit risk for deposits with financial institutions is the risk that, in the event of bank
failure, the Regional Office of Education #51's deposits may not be returned to it. To guard against
custodial credit risk for deposits with financial institutions, the Regional Office of Education #51's
investment policy requires that deposits with financial institutions in excess of FDIC limits be
secured by some form of collateral, by a written agreement, and held at an independent, third-party
institution in the name of the Regional Office ofEducation #51.
B. INVESTMENTS
The Regional Office of Education #51's investment policy requires that funds should be invested
solely in investments authorized by 30 ILCS 235/2 and 6 and 105 ILCS 5/8-7. As noted above, as of
June 30, 2011, the Regional Office of Education #51 had investments with carrying and fair values
of $954,821 deposited in U.S. Treasury securities and repurchase agreements for such securities and
$7,469 invested in the Illinois Funds Money Market Fund.
CREDIT RISK
At June 30, 2011, the Illinois Funds Money Market Fund had a Standard and Poor's AAAm rating.
The pool is audited annually by an outside independent auditor and copies of the report are
distributed to participants. Although not subject to direct regulatory oversight, the fund is
administered by the Illinois State Treasurer in accordance with the provision of the Illinois Public
Funds Investment Act, 30 ILCS 235. All investments are fully collateralized.
42
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 2 - CASH (Concluded)
CONCENTRATION OF CREDIT RISK
Unless specifically authorized by the Treasurer, the Illinois Funds Money Market Fund's investment
policy limits investment categories to not exceed 25% of the portfolio with the exception of cash
equivalents and U.S. Treasury securities. Further certificates of deposit cannot exceed 1 0% of any single
financial institution's total deposits.
INTEREST RATE RISK
The Illinois Funds Money Market Fund, created by the Illinois General Assembly, enables custodians of
public funds an investment option with a competitive rate of return on fully collateralized investments
and immediate access to the funds. The investment policy of the Illinois Funds Money Market Funds
states that, unless authorized specifically by the Treasurer, a minimum of 75% of its investments shall
have less than one year maturity and no investment shall exceed two years maturity.
NOTE 3 - DEFINED BENEFIT PENSION PLAN
Plan Description. The Regional Office of Education #51's defined benefit pension plan for Regular
employees provides retirement and disability benefits, post-retirement increases, and death benefits to plan
members and beneficiaries. The Regional Office of Education #51'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 lllinois. IMRF issues a publicly
available fmancial report that includes financial statements and required supplementary information. That
report may be obtained online at www.imrf.org.
Funding Policy. As set by statute, the Regional Office of Education #51's Regular plan members are
required to contribute 4.50 percent of their annual covered salary. The statute requires employers to
contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of
its own employees. The employer annual required contribution rate for calendar year 2010 was 10.55
percent. The Regional Office of Education #51 also contributes for disability benefits, death benefits and
supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability
and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is
set by statute.
Annual Pension Cost. The required contribution for calendar year 201 0 was $52,541.
THREE-YEAR TREND INFORMATION
Actuarial Annual Percentage Net
Valuation Pension ofAPC Pension
Date Cost (APC) Contributed Obligation
12/31/10 $ 52,541 100% $ 0
12/31/09 36,737 100% 0
12/31/08 48,033 100% 0
43
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 3 -DEFINED BENEFIT PENSION PLAN (Concluded)
The required contribution for 2010 was detennined as part of the December 31, 2008, actuarial valuation
using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2008,
included (a) 7.5 percent investment rate of return (net of administrative and direct investment expenses),
(b) projected salary increases of 4.00% a year, attributable to inflation, (c) additional projected salary
increases ranging from 0.4% to 10% per year depending on age and service, attributable to
seniority/merit, and (d) post-retirement benefit increases of 3% annually. The actuarial value of the
Regional Office of Education #51's plan assets was detennined using techniques that spread the effects
of short-term volatility in the market value of investments over a five-year period with a 20% corridor
between the actuarial and market value of assets. The Regional Office of Education #51's plan's
unfunded actuarial accrued liability at December 31, 2008, is being amortized as a level percentage of
projected payroll on an open 1 0-year basis.
Funded Status and Funding Progress. As of December 31, 2010, the most recent actuarial valuation
date, the Regular plan was 85.88 percent funded. The actuarial accrued liability for benefits was
$820,373 and the actuarial value of assets was $704,500, resulting in an underfunded actuarial accrued
liability (UAAL) of $115,873. The covered payroll for calendar year 2010 (annual payroll of active
employees covered by the plan) was $498,020 and the ratio of the UAAL to the covered payroll was 23
percent.
The schedule of funding progress, presented as RSI following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
The Regional Office of Education #51 participates in the Teachers' Retirement System of the State of
Illinois (TRS). TRS is a cost-sharing multiple-employer defined benefit pension plan that was created
by the Illinois legislature for the benefit of Illinois public school teachers employed outside the city of
Chicago.
The Illinois Pension Code outlines the benefit provisions of TRS, and amendments to the plan can be
made only by legislative action with the Governor's approval. The State of Illinois maintains primary
responsibility for funding 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 contributing service is on or after January I, 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.
44
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 4- TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Continued)
The State of lllinois makes contributions directly to TRS on behalf of the Regional Office of Education
#51's TRS-covered employees.
• On-behalf contributions. The State of Illinois makes employer pension contributions on behalf of
the Regional Office of Education #51. For the year ended June 30, 2011, the State of Illinois
contributions were based on 23.10 percent of creditable earnings not paid from federal funds, and the
Regional Office of Education #51 recognized revenue and expenditures of $124,764 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 ($123,506) and 17.08 percent ($61,367), respectively.
The Regional Office of Education #51 makes other types of employer contributions directly to TRS.
• 2.2 formula contributions. Employers contribute 0.58 percent of total creditable earnings for the
2.2 formula change. This rate is specified by statute. Contributions for the year ending June 30,
2011, were $2,137. Contributions for the years ending June 30, 2010, and June 30, 2009, were
$2,095 and $3,101, respectively.
• Federal and special trust fund contributions. When TRS members are paid from federal and
special trust funds administered by the Regional Office of Education #51, there is a statutory
requirement for the Regional Office of Education #51 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 $7,160 were paid from federal
and special trust funds that required employer contributions of $1,698. For the years ended June 30,
2010 and 2009, required Regional Office of Education #51 contributions were $4,724 and $29,967,
respectively.
• Early retirement option. The Regional Office of Education #51 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.
45
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 4- TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Concluded)
For the year ended June 30, 2011, the Regional Office of Education #51 paid no contributions to
TRS for employer contributions under the ERO program. For the years ended, June 30, 2010 and
June 30, 2009, the Regional Office of Education #51 paid no employer ERO contributions.
• Salary increases over 6 percent and excess sick leave. If the Regional Office of Education #51
grants salary increases over 6 percent and those salaries are used to calculate a retiree's final average
salary, the Regional Office of Education #51 makes a contribution to TRS. The contribution will
cover the difference in actuarial cost of the benefit based on actual salary increases and the benefit
based on salary increase of up to 6 percent. For the year ended June 30, 2011, the Regional Office of
Education #51 paid $750 to TRS for employer contributions due on salary increases in excess of 6
percent. For the years ended June 30, 2010 and 2009, the Regional Office of Education #51 paid no
employer contributions due on salary increases in excess of 6 percent.
If the Regional Office of Education #51 grants sick leave days in excess of the normal annual
allotment and those days are used as TRS service credit, the Regional Office of Education #51 makes
a contribution to TRS. The contribution is based on the number of excess sick leave days used as
service credit, the highest salary used to calculate final average salary, and the TRS total normal cost
rate (18.03 percent of salary during the year ended June 30, 2011, as recertified pursuant to Public
Act 96-1511).
For the year ended June 30, 2011 , the Regional Office of Education #51 paid no employer
contributions to TRS for sick leave days granted in the excess of the normal annual allotment. For
the years ended June 30, 2010 and 2009, the Regional Office of Education #51 paid no employer
contributions granted for sick leave days.
Further information on TRS. TRS financial information, an explanation of TRS benefits, and
descriptions of member, employer and State funding requirements can be found in the TRS
Comprehensive Annual Financial Report for the year ended June 30, 2010. The report for the year
ended June 30, 2011, is expected to be available in late 2011. The reports may be obtained by writing to
the Teachers' Retirement System of the State oflllinois, 2815 West Washington Street, P.O. Box 19253,
Springfield, Illinois 62794-9253. The most current report is also available on the TRS Web site at
http://trs.illinois.gov.
NOTE 5 - TEACHERS' HEALTH INSURANCE SYSTEM
The Regional Office of Education #51 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). Annuitant may participate in the State-administered participating provider option plan or
choose from several managed care options.
46
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 5-TEACHERS' HEALTH INSURANCE SYSTEM (Concluded)
The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines the benefit provisions ofTHIS
Fund and amendments to the plan can be made only by legislative action with the Governor's approval.
The Illinois Department of Healthcare and Family Services (HFS) and the Illinois Department of Central
Management Services (CMS) administer the plan with the cooperation of TRS. The director of HFS
determines the rates and premiums for annuitants and dependent beneficiaries and establishes the cost­sharing
parameters. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active
contributors to the TRS who are not employees of the State to make a contribution to THIS Fund.
The percentage of employer required contributions in the future will be determined by the director of
Health care and Family Services and will not exceed 105 percent of the percentage of salary actually
required to be paid in the previous fiscal year.
On-behalf contributions to THIS Fund. The State of Illinois makes employer retiree health insurance
contributions on behalf of the Regional Office. State contributions are intended to match contributions to
THIS Fund from active members which were 0.88 percent of pay during the year ended June 30, 2011.
State of lllinois contributions were $3,242, and the Regional Office of Education #51 recognized
revenue and expenditures of this amount during the year.
State contributions intended to match active member contributions during the year ended June 30, 2010,
were 0.84 percent of pay. State contributions on behalf of the Regional Office of Education #51's
employees were $3,034 for the year ended June 30, 2010.
Had the Regional Office of Education #51 recognized revenue and expenditures for State contributions
intended to match active member contributions during the year ended June 30, 2009, under the current
standards, the contribution match would have been 0.84 percent of pay, or $4,492.
Employer contributions to THIS Fund. The Regional Office of Education #51 also makes
contributions to THIS Fund. The employer THIS Fund contribution was 0.66 percent during the year
ended June 30, 2011, and 0.63 percent during the years ended June 30, 2010 and 2009. For the
year ended June 30, 2011, the Regional Office of Education #51 paid $2,431 to the THIS Fund. For the
years ended June 30, 2010 and 2009, the Regional Office paid $2,276 and $3,369 to THIS Fund,
respectively, which was 1 00 percent of the required contribution.
Further information on THIS Fund. The publicly available financial report of the THIS Fund may be
obtained by writing to the Department of Healthcare and Family Services, 201 S. Grand Ave.,
Springfield, IL 62763-3838.
47
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 6- OTHER POSTEMPLOYlvfENT BENEFITS- HEALTH INSURANCE
The Regional Office of Education #51 provides other limited health care insurance coverage for its
eligible retired employees. The Governmental Accounting Standards Board (GASB) issued Statements
No. 43 and 45 that established generally accepted accounting principles for the annual financial
statement for postemployment benefit plans other than pension plans. GASB Statement No. 45 is
implemented prospectively. The required information is as follows:
Membership in the plan consisted of the following as of:
Retirees and benficiaries receiving benefits
Terminated plan members entitled to
but not yet receiving benefits
Active vested plan members
Active nonvested plan members
Total
Number of participating employers
SCHEDULE OF FUNDING PROGRESS
Actuarial Acutarial Accrued
Acutarial Value of Liability (AAL) -
Valuation Assets Entry Age
Date (a) (b)
6/30/2009
6/30/2010
6/30/2011 0 14,102
June 30, 2011
Unfunded
AAL
(UAAL)
(b-a)
14,102
48
0
0
7
15
22
1
Funded
Ratio
(alb)
0.00%
UAALasa
Percentage
Covered of Covered
Payroll Payroll
(c) ((b-a)/c)
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANClAL STATEMENTS
JUNE 30, 2011
NOTE 6 - OTHER POST -EMPLOYMENT BENEFITS -HEALTH INSURANCE (Continued)
ANNUAL OPEB COST AND NET OPEB OBLIGATION
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost
Contributions made
Increase (decrease) in net OPEB obligation
Net OPEB obligation beginning of year
Net OPEB obligation end of year
June 30, 2011
$ 2,326
2,326
2,326
$ 2,326
The net OPEB obligation of $2,326 has not been recorded as a liability in the Regional Office of
Education #51 's accounting records.
THREE-YEAR TREND INFORMATION
Fiscal
Year
Ending
6/30/2009
6/30/2010
6/30/2011
Aruma!
OPEB Cost
2,326
Percentage of
AnnualOPEB
Cost Contributed
0.00%
ANNUAL REQUIRED CONTRIBUTION
June 30. 2012
Service cost $ 1,760
Amortization 470
Interest 112
Annual required contribution $ 2,342
49
Net
OPEB
Obligation
2,326
June 30, 2011
$ 1,806
409
111
$ 2,326
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 6-OTHER POST-EMPLOYMENT BENEFITS- HEALTH INSURANCE (Continued)
FUNDING POLICY AND ACTUARIAL ASSUMPTIONS
Contribution rates:
Employer
Plan members
Actuarial valuation date
Acuarial cost method
Amortization period
Remaining amortization period
Asset valuation method
Acutarial assumptions:
Investment rate of return*
Projected salary increases
Healthcare inflation rate
Mortality, turnover, disability,
retirement ages
Active utilization rate:
Employer provided benefit
* Includes inflation at
0.00%
6/30/2011
Entry age
Level percentage of pay, open
30 years
Market
5.00%
5.00%
8.00% intial, 6.00% ultimate
Same rates utilized for IMRF
20%
Explicit: None
Implicit: 40% of premium to age 65
(50% of$429/mo +50% of$857/mo)
3.00%
50
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 6- OTHER POST-EMPLOYMENT BENEFITS - HEALTH INSURANCE (Concluded)
GASB 45 SUMMARY AS OF JUNE 30,2011
Service Active Retired Total
Division Cost Liability Liability Liability
All 1,760 14,102 0 14,102
Discount Rate: 5.0%
Medical Inflation Rate: 8.0% initial, 6.0% ultimate
Future Payroll Increases: 5.0%
NOTE 7 -OPERATING LEASES
Annual
Required Expected
Contribution Payments Actives Retirees Total
2,341 0 22 0 22
The Regional Office of Education #51 leases classroom, office, and laboratory space from the Capital
Area Career Center. During fiscal year 2011, the Regional Office had three separate leases for 6,333
square feet, 4,040 square feet, and 2,105 square feet, all leased at $7.35 per square foot. Additionally,
the Regional Office leased office space in Evanston, Illinois, for $2,243 per month for fiscal year 2011.
Rent expense for the year ended June 30, 2011, was $118,633. The Regional Office also leases a copier
over a 60-month term ending May 2016 which requires monthly payments of $182, a digital imaging
system over a 60-month term ending June 2013 which requires monthly payments of $177, a copier
leased month to month, a postage meter leased month to month, and a postage meter leased over a 60-
month term ending December 2014 which requires monthly payments of $60. Total equipment lease
expense for the year ended June 30, 2011, was $3,117. Future minimum rentals are as follows for the
years ending June 30:
2012
2013
2014
2015
2016 and thereafter
NOTE 8- RISK MANAGEMENT
$ 5,028
5,028
2,544
2,184
1,911
$ 16.695
The Regional Office of Education #51 is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The Regional Office of Education #51 has purchased commercial insurance to cover these risks. No
losses have been incurred in excess of the amounts covered by insurance over the past three years.
51
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
NOTE 9- CAPITAL ASSETS
In accordance with GASB Statement No. 34, the Regional Office of Education #51 has reported capital
assets in the govenunent-wide Statement of Net Assets. Purchases are reported as capital outlay in the
govenunental fund statements. Purchases of business-type activities are capitalized when purchased.
The following table provides a summary of changes in total assets, accumulated depreciation, and
investment in capital assets for the year ended June 30, 2011:
Governmental Activities
Capital Assets, Being Depreciated
Computers and Equipment
Other Equipment
Total
Less Accumulated Depreciation for:
Computers and Equipment
Other Equipment
Total
Governmental Activities
Capital Assets, Net
Business-Type Activities
Capital Assets, Being Depreciated
Other equipment
Less Accumulated Depreciation for:
Other equipment
Business-Type Activities
Capital Assets, Net
Balance
07/01/10 Additions Disposals
Balance
06/30/11
$ 79,120 $
38,222
1,118 $ 4,801 $ 75,437
117,342
(67,749)
(36,306)
(104,055)
1,118
(4,251)
(1,519)
(5,770)
38,222
4,801 113,659
--~--
(4,801)
(4,801)
(67,199)
(37,825)
(105,024)
$ 13,287 $ (4,652) $
=====
$ 8,635
$ 11,912 $ $ $ 11,912
(1,762) (2,383) (4,145)
$ 10,150 $ (2,383) =$==== =$==7,=76=7=
Capital assets are depreciated using the straight-line method over the estimated useful lives of the assets.
Depreciation expense for the year ended June 30, 2011, of $5,770 and $2,383 was charged to the
governmental activities and business-type activities, respectively, on the govenunent-wide Statement of
Activities. Investment in capital assets is the component of net assets that reports capital assets net of
accumulated depreciation.
52
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION#51
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 10-INTERFUND ACTIVITY
DUE TO/FROM OTHER FUNDS
Interfund due to/from other fund balances at June 30, 2011, consist of the following individual due
to/from other funds in the goverrunental fund Balance Sheet and proprietary funds Statement of Net
Assets. These balances, except for those activities between governmental funds and business-type funds,
were eliminated in the government-wide Statement of Net Assets.
General Fund
Education Fund
Other Special Revenue Funds
Proprietary Fund
TRANSFERS
Due from Other Funds
$ 737,462
$ 737,462
Due to Other Funds
$
$
417,159
317,412
2,891
737,462
Interfund transfers in/out to other fund balances at June 30, 2011, consist of the following individual
transfers in/out to other funds in the governmental fund Statement of Revenues, Expenditures, and
Changes in Fund Balances. The transfer balances between govennnental funds were eliminated in the
government-wide Statement of Activities.
General Fund
Educat1on Fund
Other Special Revenue Funds
53
Transfer In
$ 120,272
41,330
2,766
$ 164,368
Transfer Out
$ 39,095
33,181
92,092
$ 164,368
SANGAMON COUNTY
REGIONAL OFFICE OF EDUCATION #51
NOTES TO THE FINANCIAL STAtEMENTS
JUNE 30, 2011
NOTE 11 -ON-BEHALF PAYMENTS
The State of Illinois paid the following salaries on behalf of the Regional Office of Education #51:
Regional Superintendent Salary $ 88,167
Assistant Regional Superintendent Salary 90,686
Regional Superintendent Benefits
(Includes State-paid insurance) 21,790
Assistant Regional Superintendent Benefits
(Includes State paid insurance) 14,403
TRS Pension Contribution 124,764
Teachers' Health Insurance Security (THIS)
Fund Contribution 3,242
Total $ 343,Q52
Salary and benefit data for the Regional Superintendent and Assistant Regional Superintendent were
calculated based on data provided by the Illinois State Board of Education.
These amounts have been recorded in the accompanying financial statements as state revenue and
expenditures.
Sangamon County provides the Regional Office with staff and pays c