FY11-ROE32-Fin-Full

              STATE OF ILLINOIS
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
FINANCIAL AUDIT
(In Accordance with the Single Audit Act
& OMB Circular A-133)
For the Year Ended June 30, 2011
Performed as Special Assistant Auditors
For the Office of the Auditor General
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
June 30, 2011
TABLE OF CONTENTS
PAGE
Officials ......................................................................................................... 1
Compliance Report Summary .................................................................... 2-3
Financial Statement Report Summary....................................................... 4
FINANCIAL SECTION
Independent Auditor's Report ........................................................................ 5-6
Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with Government
Auditing Standards ..................................................................................... 7-8
Independent Auditor’s Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Internal Control over Compliance In Accordance
with OMB Circular A-133 .......................................................................... 9-10
Schedule of Findings and Questioned Costs
Section I - Summary of Auditor’s Results .................................................. 11
Section II - Financial Statement Findings ................................................... 12a-12e
Section III - Findings and Questioned Costs for Federal Awards ............... 13
Corrective Action Plan for Current Year Audit Findings………………. .. 14a-14d
Summary Schedule of Prior Audit Findings….. ......................................... 15
Management's Discussion and Analysis………………………………..….. 16a-16g
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets ............................................................................. 17
Statement of Activities ................................................................................ 18
Fund Financial Statements
Balance Sheet - Governmental Funds ......................................................... 19
Reconciliation of the Balance Sheet
to the Statement of Net Assets - Governmental Funds ............................ 20
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
June 30, 2011
TABLE OF CONTENTS - CONTINUED
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds ..................................................... 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 ................................................................. 27-54
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund Schedule of Funding Progress Unaudited 55
OTHER SUPPLEMENTAL INFORMATION
Combining Schedule of Accounts
General Fund ............................................................................................... 56
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - General Fund Accounts .................................................... 57
Combining Schedule of Accounts
Education Fund ........................................................................................... 58-63
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - Education Fund Accounts ................................................ 64-69
Budgetary Comparison Schedules – Education Fund Accounts
Addiction Prevention Comprehensive .................................................. 70
ARRA McKinney Education for Homeless Children ........................... 71
ARRA Title I School Improvement and Accountability ....................... 72
CPDC Project ........................................................................................ 73
CPDC Project ........................................................................................ 74
Gifted Education ................................................................................... 75
IVPA Family Violence Coordinating Council ...................................... 76
IVPA Family Violence Coordinating Council ...................................... 77
McKinney Education For Homeless Children ...................................... 78
McKinney Education For Homeless Children ...................................... 79
National Board of Professional Teaching Standards Mentoring .......... 80
Preschool for All ................................................................................... 81
Regional Safe Schools .......................................................................... 82
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
June 30, 2011
TABLE OF CONTENTS - CONCLUDED
ROE/ISC Operations ............................................................................. 83
Teachers and Administrators Mentoring Program ................................ 84
Teachers and Administrators Mentoring Program ................................ 85
Teen Reach ........................................................................................... 86
Title I Reading First Part B SEA Funds ................................................ 87
Title I School Improvement & Accountability System of Support ....... 88
Title I School Improvement & Accountability System of Support ....... 89
Title II Teacher Quality ......................................................................... 90
Title II Teacher Quality Leadership Grant ............................................ 91
Title II Teacher Quality Leadership Grant ............................................ 92
Title II Teacher Quality Leadership Grant System of Support ............. 93
Truants’ Alternative Program ............................................................... 94
Combining Balance Sheet
Nonmajor Special Revenue Funds .............................................................. 95
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Special Revenue Funds .................................. 96
Combining Statement of Net Assets
Nonmajor Proprietary Funds ....................................................................... 97-100
Combining Statement of Revenues, Expenses and Changes in
Fund Net Assets – Nonmajor Proprietary Funds ........................................ 101-104
Combining Statement of Cash Flows
Nonmajor Proprietary Funds ....................................................................... 105-108
Combining Statement of Fiduciary Net Assets
Agency Funds.............................................................................................. 109
Combining Statement of Changes in Assets and Liabilities
Agency Funds.............................................................................................. 110
Schedule of Disbursements to School District Treasurers
And Other Entities – Distributive Fund ...................................................... 111
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards ................................................ 112-113
Notes to the Schedule of Expenditures of Federal Awards ........................... 114-115
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
June 30, 2011
OFFICIALS
Regional Superintendent Mr. Gregg Murphy
(Effective January 10, 2012 and Current)
Regional Superintendent Dr. Kathleen M. Pangle
(During the Audit Period and Retired Effective December 31, 2011)
Assistant Regional Superintendent Mr. Gregg Murphy
(Effective July 1, 2011 through January 10, 2012)
Assistant Regional Superintendent Ms. Vicky Hensley
(During the Audit Period through June 30, 2011)
Assistant to the Regional Superintendent Mr. Gregg Murphy
(During the Audit Period through June 30, 2011)
Office is located at:
189 E. Court Street, Suite 600
Kankakee, Illinois 60901
1
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
June 30, 2011
COMPLIANCE REPORT SUMMARY
The compliance audit testing performed in this audit was conducted in accordance with Government
Auditing Standards and in accordance with the Illinois State Auditing Act.
AUDITORS' REPORTS
The auditors’ reports on compliance and on internal controls do not contain scope limitations, disclaimers,
or other significant non-standard language.
SUMMARY OF AUDIT FINDINGS
Number of This Audit Prior Audit
Audit findings 4 4
Repeated audit findings 3 -
Prior recommendations implemented or not repeated 1 -
Matters, which are less than a significant deficiency or material weakness but more than inconsequential,
have been reported in a Management Letter of Comment to the Regional Superintendent.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-01 12a Controls Over Financial Statement Preparation Material Weakness
11-02 12b Improper Use of Refunded State Grant Expenditures Material Weakness
and Noncompliance
11-03 12c Interest Earned on Federal Grant Funds Material Weakness and
Noncompliance
11-04 12d Improper Support for Amounts Claimed on Material Weakness
Expenditure Reports
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
11-03 12c Interest Earned on Federal Grant Funds Material Weakness
and Noncompliance
11-04 12d Improper Support for Amounts Claimed on Material Weakness
Expenditure Reports
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
10-02 Inadequate Internal Control Procedures Material Weakness
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
None
2
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
June 30, 2011
EXIT CONFERENCE
The findings and recommendations appearing in this report were discussed with Agency personnel at an
informal exit conference on December 13, 2011. Attending were Dr. Kathleen Pangle, Regional
Superintendent; Gregg Murphy, Assistant to the Regional Superintendent; Sherry Johnson, Finance Officer;
Kay Williams, Payroll Clerk/Bookkeeper; Clatus Bierman, CPA, Partner, Kemper CPA Group, LLP; and
Kimberly Walker, CPA, Partner, Kemper CPA Group, LLP. Responses to the recommendations were
provided by Dr. Kathleen Pangle, Regional Superintendent on December 13, 2011.
3
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
For the Year Ended June 30, 2011
FINANCIAL STATEMENT REPORT SUMMARY
The audit of the accompanying basic financial statements of the Iroquois and Kankakee Counties Regional
Office of Education #32 was performed by Kemper CPA Group LLP, Certified Public Accountants and
Consultants.
Based on their audit, the auditors expressed an unqualified opinion on the Agency’s basic financial
statements.
4
Certified Public Accountallts and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable William G. Hol1and
Auditor General
State of Illinois
I
As Special Assistant Auditors for the Auditor IGeneral, we have audited the accompanying financial
statements of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund infonnation of the Iroquois and Kankakee Counties Regional Office of Education #32, as of
and for the year ended June 30, 2011, which col1ectively comprise the Iroquois and Kankakee Counties
Regional Office of Education #32's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Iroquois and Kankakee Counties Regional Office of
Education #32'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 perfonn
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 infonnation of the Iroquois and Kankakee Counties Regional Office of
Education #32, as of June 30, 2011, and the respective changes in financial position and cash flows, where
applicable, thereof for the year then ended in confonnity with accounting principles generally accepted in
the United States of America.
The Iroquois and Kankakee Counties Regional Office of Education #32 adopted GASB Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions during the year ended June 30, 2011.
The statement changed the classifications of governmental fund balances and clarified the definitions of
existing fund types. The adoption of this statement had no effect on any of the Iroquois and Kankakee
Counties Regional Office of Education #32's governmental funds' assets or liabilities nor was there any
effect to the total amount of any of the Iroquois and Kankakee Counties Regional Office of Education #32's
governmental fund balances as of and for the year ended June 30, 2011.
5
3401 Professional Park Drive _ P.O. Box 129 _ Marion, IL 62959
P!lolle: (618)997-3055 Fax: (618)997-5121 kClllpt'l'Cpa.colll
In accordance with Government Auditing Standards, we have also issued a report dated March 21, 2012 on
our consideration of the Iroquois and Kankakee Counties Regional Office of Education #32’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-16g and 55 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 Iroquois and Kankakee Counties Regional Office of Education #32's basic financial statements.
The combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the
Schedule of Disbursements to School District Treasurers and Other Entities are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The accompanying
Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by
U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-
Profit Organizations, and is also not a required part of the basic financial statements. The combining and
individual nonmajor fund financial statements, budgetary comparison schedules, the Schedule of
Disbursements to School District Treasurers and Other Entities, and the Schedule of Expenditures of Federal
Awards have been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken
as a whole.
KEMPER CPA GROUP LLP
Certified Public Accountants and Consultants
Marion, Illinois
March 21, 2012
6
I(.vmpot C:Pil G,.." UP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENTAUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
As Special Assistant Auditors for the Auditor General, we have audited the financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the Iroquois and Kankakee Counties Regional Office of Education #32, as of and for the year
ended June 30, 2011, which collectively comprise the Iroquois and Kankakee Counties Regional Office of
Education #32's basic financial statements and have issued our report thereon dated March 21, 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 Iroquois and Kankakee Counties Regional Office of Education #32 is responsible for
establishing and maintaining effective internal control over financial reporting. In planning and performing
our audit, we considered the Iroquois and Kankakee Counties Regional Office of Education #32'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 Iroquois and Kankakee Counties Regional Office of Education #32's internal control
over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Iroquois and
Kankakee Counties Regional Office of Education #32's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and was not designed to identifY all deficiencies in the internal control over financial
reporting that might be significant deficiencies or material weaknesses and therefore, there can be no
assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified.
However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified
certain deficiencies in internal control over financial reporting that we consider to be material weaknesses.
A 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 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
deficiencies described in findings 11-01, 11-02, 11-03, and 11-04 in the accompanying Schedule of Findings
and Questioned Costs to be material weaknesses.
7
3401 Professional Park Drive. P.O. Box 129. Marion, IL 62959
Phone: (618)997-3055 Fax: (618)997-5121 kelllpcrcp'l.("OI1l
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Iroquois and Kankakee Counties Regional
Office of Education #32’s financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion.
The results of our tests disclosed an instance of noncompliance or other matters that is required to be
reported under Government Auditing Standards and which is described in the accompanying Schedule of
Findings and Questioned Costs as item 11-02.
We also noted certain matters which we have reported to management of the Iroquois and Kankakee
Counties Regional Office of Education #32 in a separate letter dated March 21, 2012.
Iroquois and Kankakee Counties Regional Office of Education #32’s responses to the findings identified in
our audit are described in the accompanying Schedule of Findings and Questioned Costs. We did not audit
the Iroquois and Kankakee Counties Regional Office of Education #32’s responses and, accordingly, we
express no opinion on them.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois State
Board of Education, federal awarding agencies and pass-through entities and is not intended to be and
should not be used by anyone other than these specified parties.
KEMPER CPA GROUP LLP
Certified Public Accountants and Consultants
Marion, Illinois
March 21, 2012
8
I(~ C:PfI Gtry UP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REOUIREMENTS
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 Iroquois and Kankakee Counties Regional Office of Education #32's compliance with
the types of compliance requirements described in the Us. Office of Management and Budget (OMB)
Circular A-133 Compliance Supplement that could have a direct and material effect on each of the Iroquois
and Kankakee Counties Regional Office of Education #32's major federal programs for the year ended June
30,2011. The Iroquois and Kankakee Counties Regional Office of Education #32'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 Iroquois and Kankakee Counties Regional
Office of Education #32's management. Our responsibility is to express an opinion on the Iroquois and
Kankakee Counties Regional Office of Education #32'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-I33, 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 Iroquois
and Kankakee Counties Regional Office of Education #32'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
Iroquois and Kankakee Counties Regional Office of Education #32's compliance with those requirements.
In our opinion, the Regional Office of Education #32 complied, in all material respects, with the compliance
requirements referred to above that could have a direct and material effect on each of its major federal
programs for the year ended June 30, 2011. However, the results of our auditing procedures disclosed an
instance of noncompliance with those requirements, which is required to be reported in accordance with
OMB Circular A-I33 and which is described in the accompanying Schedule of Findings and Questioned
Costs as item 11-03.
9
3401 Professional Park Drive _ P.O. Box 129 _ Marion, IL 62959
P!lone: (618)997-3055 Fax: (618)997-5121 kClIlpncpa.colll
Internal Control Over Compliance
Management of the Iroquois and Kankakee Counties Regional Office of Education #32 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 Iroquois and Kankakee Counties Regional Office of Education #32’s internal control over
compliance with the requirements that could have a direct and material effect on a major federal program to
determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and
report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose
of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of the Iroquois and Kankakee Counties Regional Office of
Education #32’s internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control over compliance 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 discussed below, we
identified certain deficiencies in internal control over compliance that we consider to be material
weaknesses.
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 a 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. We consider the deficiencies in internal control
over compliance described in the accompanying Schedule of Findings and Questioned Costs as items 11-03
and 11-04 to be material weaknesses.
Iroquois and Kankakee Counties Regional Office of Education #32’s responses to the findings identified in
our audit are described in the accompanying Schedule of Findings and Questioned Costs. We did not audit
the Iroquois and Kankakee Counties Regional Office of Education #32’s responses and, accordingly, we
express no opinion on them.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois State
Board of Education, federal awarding agencies and pass-through entities and is not intended to be and
should not be used by anyone other than these specified parties.
KEMPER CPA GROUP LLP
Certified Public Accountants and Consultants
Marion, Illinois
March 21, 2012
10
7"'"F'- C:P7'1 G'"'f UP
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2011
SECTION 1 - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor’s report issued: Unqualified
Internal control over financial reporting:
 Material weakness(es) identified? Yes
 Significant Deficiency(ies)? No
 Noncompliance material to financial statements noted? Yes
Federal Awards
Internal control over major programs:
 Material weakness(es) identified? Yes
 Significant Deficiency(ies)? 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)? Yes
Identification of major programs:
CFDA Number(s) Name of Federal Program or Cluster
84.010A System of Support Title I – School Improvement and Accountability
84.389A ARRA – Title I – School Improvement and Accountability
Dollar threshold used to distinguish between Type A and Type B programs: $300,000
Auditee qualified as a low-risk auditee? No
11
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II – FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30, 2011
Finding No.: 11-01 – Controls Over Financial Statement Preparation (Repeat from 10-01)
Criteria/specific requirement:
The Regional Office of Education #32 is required to maintain a system of controls over the preparation of
financial statements in accordance with generally accepted accounting principles (GAAP). Regional Office
internal controls over GAAP financial reporting should include adequately trained personnel with the
knowledge and expertise to prepare and/or thoroughly review GAAP based financial statements to ensure that
they are free of material misstatements and include all disclosures as required by the Governmental
Accounting Standards Board (GASB).
Condition:
The Regional Office of Education #32 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:
A. Several adjustments were necessary to properly record prior year proposed audit entries.
B. In addition, 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 some accounts payable, accounts receivable, and deferred
revenue, the Regional Office’s financial information required several adjusting entries to present the
financial statements in accordance with generally accepted accounting principles.
Effect:
Management or employees in the normal course of performing their assigned functions may not prevent or
detect financial statement misstatements and disclosure omissions in a timely manner.
Cause:
According to Regional Office officials, they do not have adequate funding to hire a certified public accountant
or other qualified and trained financial professionals as full-time staff.
Recommendation:
As part of its internal control over the preparation of its financial statements, including disclosures, the
Regional Office of Education #32 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:
In an attempt to correct this finding, the Regional Office will send its fiscal staff to various trainings to better
understand accrual accounting and reporting under generally accepted accounting principles (GAAP).
12a
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II – FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30, 2011
Finding No.: 11-02 – Improper Use of Refunded State Grant Expenditures
Criteria/specific requirement:
The Regional Office of Education #32 is responsible for establishing and maintaining an internal control
system over receipts and disbursements sufficient to prevent errors and fraud in its completion of quarterly
expenditure reports required for grants administered by the Illinois State Board of Education.
Condition:
The Regional Office received a refund in the amount of $5,220 on May 27, 2011 for a purchased service
expenditure claimed on the final Teacher & Administrators Mentoring Program (Project: 2010-3982-01)
expenditure report through August 31, 2010. The Regional Office had not expected to receive this refund at
the time of the final expenditure report submission. Once received, the Regional Office immediately used
$814 of the refund to cover Teacher & Administrators Mentoring Program purchased service expenditures that
had previously been paid with local funds. The remaining $4,406 of the refund had not been spent on
allowable Teacher & Administrators Mentoring Program expenditures as of June 30, 2011, nor had it been
returned to the grantor.
Effect:
Lack of appropriate internal controls over grant receipts and disbursements could allow misuse of State or
Federal grant monies.
Cause:
Oversight by the Regional Office personnel.
Recommendation:
The Regional Office of Education #32 should use refunds, of previously claimed expenditures, to pay for
similar allowable grant expenditures or return the monies to the grantor immediately.
Management’s Response:
The Regional Superintendent is aware of the finding and has made arrangements to spend the refund on
allowable grant expenditures as recommended.
12b
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II – FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30, 2011
Finding No.: 11-03 – Interest Earned on Federal Grant Funds (Repeat from 10-03)
Federal Program Name & Year: Title I – School Improvement and Accountability – System of Support
McKinney Education for Homeless Children
Project Number: 10-4331-SS and 11-4331-SS
05-4920-00, 06-4920-00, 07-4920-00, 08-4920-00, 09-4920-00 and 10-4920-00
CFDA Number: 84.010A, 84.196A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/specific requirement:
The Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local
Governments (34 Code of Federal Regulations Part 80.21) requires that interest earned on federal fund
balances in excess of $100 be remitted back to the federal granting agency promptly or at least quarterly.
Condition:
The Regional Office had interest income in excess of $100 related to the following programs which was due
back to the grantor agency:
Title I – School Improvement and Accountability – System of Support - $925
McKinney Education for Homeless Children – $1,821
Questioned Costs:
$925 and $1,821
Context:
A total of $2,746 in interest income in excess of $100 per bank account was noted that is due back to the
appropriate grantor agencies.
Effect:
Noncompliance with the Uniform Administrative Requirements for Grants and Cooperative Agreements to
State and Local Governments (34 Code of Federal Regulations Part 80.21).
Cause:
Oversight by the Regional Office personnel.
Recommendation:
The Regional Office should track interest earnings on federal funds so that any excess funds can be returned
promptly. After $100 is earned on federal funds, any federal interest in excess of $100 should be returned to
the grantor at the end of each following quarter.
Management’s Response:
The Regional Office of Education #32 agrees with the finding and has remitted the appropriate amounts of
interest to its grantor as well as any future interest amounts earned in excess of the $100 limit.
12c
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II – FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30, 2011
Finding No.: 11-04 – Improper Support for Amounts Claimed on Expenditure Reports
(Repeat from 10-04)
Federal Program Name & Year: Title I – School Improvement and Accountability – System of Support
Project Number: 11-4331-SS
CFDA Number: 84.010A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/specific requirement:
The Regional Office of Education #32 is responsible for establishing and maintaining an internal control
system over receipts and disbursements sufficient to prevent errors and fraud in its completion of quarterly
expenditure reports required for grants administered by the Illinois State Board of Education.
Condition:
A. The Regional Office does not reimburse for alcoholic beverages purchased on restaurant receipts;
however, in one instance the 7.5% tax and 18% gratuity totaling $19.13 on alcoholic beverages was
reimbursed.
B. Reimbursement of $14,108.73 for program supplies and activities was approved and paid without any
supporting documentation. Supporting documentation was later obtained for some of the items, after the
payment was made, as result of an audit request. Detail of the items remaining unsupported as of the report
date are included in items a – e below.
a. A reimbursement of $11.38 was made to a particular individual for meals and no supporting
documentation was ever received.
b. Sales tax of $11.39 was paid on otherwise allowable expenditures.
c. Membership dues of $610 for two individuals were paid to the Illinois Principals Association.
Only one invoice of $305 had been provided as support. The Regional Office later determined
that the individual had been paid twice and grant’s subrecipient had overcharged the Regional
Office by $305.
d. Travel expenses of $200 were paid to an individual without any supporting documentation.
e. Payment was made to a credit card totaling $740.70 of which $37.90 was charged at a restaurant
and initially had no supporting documentation in order to determine if the restaurant expenditure
was allowable under the program. Upon receiving a detailed receipt, the $37.90 was for the
purchase of alcohol and was not an allowable expenditure under the program.
C. Reimbursement of $576.02 from restaurant credit card summary receipts did not provide detail of the
amounts spent in order to determine if the entire amount paid was allowable under the program. In
addition, $209.17 of this amount was supported with a statement from the District requesting the
reimbursement, stating that detailed receipts were not available.
12d
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION II – FINANCIAL STATEMENT FINDINGS
For the Year Ended June 30, 2011
Finding No.: 11-04 – Improper Support for Amounts Claimed on Expenditure Reports (Repeat from 10-04)
(Concluded)
Questioned Costs:
A. $19.13
B. N/A
B – a. $11.38
B – b. $11.39
B – c. $305.00
B – d. $200.00
B – e. $37.90
C. $576.02
Context: N/A
Effect:
Potential noncompliance with grant requirements.
Cause:
Oversight by the Regional Office personnel.
Recommendation:
The Regional Office should obtain proper documentation for all reimbursements including ensuring that
purchase orders and invoices agree and that reimbursements are based only on valid vendor invoices and not
purchase orders.
Management’s Response:
The Regional Superintendent agrees with the finding. Additionally, the I-KAN Regional Office of Education
has taken steps to address the procedures related to this finding. Specifically, employees as well as outside
entities participating in grant activities have received reminders of proper procedures for reimbursement for
business related expenses. As an office, we will continue to work to share proper procedure reminders with
employees and other entities.
12e
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SECTION III – FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
For the Year Ended June 30, 2011
INSTANCES OF NONCOMPLIANCE:
Finding No. 11-03 – Interest Earned on Federal Grant Funds (finding details on page 12c)
MATERIAL WEAKNESSES:
Finding No. 11-03 – Interest Earned on Federal Grant Funds (finding details on page 12c)
Finding No. 11-04 – Improper Support for Amounts Claimed on Expenditure Reports (finding details on
page 12d and 12e)
13
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
CORRECTIVE ACTION PLAN FOR CURRENT-YEAR AUDIT FINDINGS
For the Year Ended June 30, 2011
Corrective Action Plan
Finding No.: 11-01 – Controls Over Financial Statement Preparation
Condition:
The Regional Office of Education #32 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:
A. Several adjustments were necessary to properly record prior year proposed audit entries.
B. In addition, 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 some accounts payable, accounts receivable, and
deferred revenue, the Regional Office’s financial information required several adjusting entries to
present the financial statements in accordance with generally accepted accounting principles.
Plan:
The Regional Office will send its fiscal staff to various trainings to better understand accrual accounting
and reporting under generally accepted accounting principles (GAAP).
Anticipated Date of Completion:
June 30, 2012
Name of Contact Person:
Mr. Gregg Murphy, Regional Superintendent
14a
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
CORRECTIVE ACTION PLAN FOR CURRENT-YEAR AUDIT FINDINGS
For the Year Ended June 30, 2011
Corrective Action Plan
Finding No.: 11-02 – Improper Use of Refunded State Grant Expenditures
Condition:
The Regional Office received a refund in the amount of $5,220 on May 27, 2011 for a purchased service
expenditure claimed on the final Teacher & Administrators Mentoring Program (Project: 2010-3982-01)
expenditure report through August 31, 2010. The Regional Office had not expected to receive this refund
at the time of the final expenditure report submission. Once received, the Regional Office immediately
used $814 of the refund to cover Teacher & Administrators Mentoring Program purchased service
expenditures that had previously been paid with local funds. The remaining $4,406 of the refund had not
been spent on allowable Teacher & Administrators Mentoring Program expenditures as of June 30, 2011,
nor had it been returned to the grantor.
Plan:
The Regional Office of Education has made arrangements to spend the refund on allowable grant
expenditures.
Anticipated Date of Completion:
June 30, 2012
Name of Contact Person:
Mr. Gregg Murphy, Regional Superintendent
14b
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
CORRECTIVE ACTION PLAN FOR CURRENT-YEAR AUDIT FINDINGS
For the Year Ended June 30, 2011
Corrective Action Plan
Finding No.: 11-03 – Interest Earned on Federal Grant Funds
Condition:
The Regional Office had interest income in excess of $100 related to the following programs which was
due back to the grantor agency:
Title I – School Improvement and Accountability – System of Support - $925
McKinney Education for Homeless Children - $1,821
Plan:
The Regional Office of Education has remitted the appropriate amounts of interest to its grantor as well
as any future interest amounts earned in excess of the $100 limit.
Anticipated Date of Completion:
December 31, 2011
Name of Contact Person:
Mr. Gregg Murphy, Regional Superintendent
14c
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
CORRECTIVE ACTION PLAN FOR CURRENT-YEAR AUDIT FINDINGS
For the Year Ended June 30, 2011
Corrective Action Plan
Finding No.: 11-04 – Improper Support for Amounts Claimed on Expenditure Reports
Condition:
A. The Regional Office does not reimburse for alcoholic beverages purchased on restaurant receipts;
however, in one instance the 7.5% tax and 18% gratuity totaling $19.13 on alcoholic beverages was
reimbursed.
B. Reimbursement of $14,108.73 for program supplies and activities was approved and paid without any
supporting documentation. Supporting documentation was later obtained for some of the items, after
the payment was made, as result of an audit request. Detail of the items remaining unsupported as of
the report date are included in items a – e below.
a. A reimbursement of $11.38 was made to a particular individual for meals and no supporting
documentation was ever received.
b. Sales tax of $11.39 was paid on otherwise allowable expenditures.
c. Membership dues of $610 for two individuals were paid to the Illinois Principals
Association. Only one invoice of $305 had been provided as support. The Regional Office
later determined that the individual had been paid twice and grant’s subrecipient had
overcharged the Regional Office by $305.
d. Travel expenses of $200 were paid to an individual without any supporting documentation.
e. Payment was made to a credit card totaling $740.70 of which $37.90 was charged at a
restaurant and initially had no supporting documentation in order to determine if the
restaurant expenditure was allowable under the program. Upon receiving a detailed receipt,
the $37.90 was for the purchase of alcohol and was not an allowable expenditure under the
program.
C. Reimbursement of $576.02 from restaurant credit card summary receipts did not provide detail of the
amounts spent in order to determine if the entire amount paid was allowable under the program. In
addition, $209.17 of this amount was supported with a statement from the District requesting the
reimbursement, stating that detailed receipts were not available.
Plan:
The Regional Office of Education has taken steps to address the procedures related to this finding.
Specifically, employees as well as outside entities participating in grant activities have received
reminders of proper procedures for reimbursement for business related expenses. As an office, we will
continue to work to share proper procedure reminders with employees and other entities.
Anticipated Date of Completion:
June 30, 2012
Name of Contact Person:
Mr. Gregg Murphy, Regional Superintendent
14d
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the Year Ended June 30, 2011
Finding Number Condition Current Status
10-01 Controls Over Financial Statement Preparation Repeated
10-02 Inadequate Internal Control Procedures Not Repeated
10-03 Interest Earned on Federal Grant Funds Repeated
10-04 Improper Support for Amounts Claimed on Repeated
Expenditure Reports
15
MANAGEMENT’S DISCUSSION AND ANALYSIS
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The Iroquois-Kankakee Regional Office of Education #32 (ROE #32) provides this Management’s
Discussion and Analysis of its financial statements. This narrative overview and analysis of the
financial activities is for the year ended June 30, 2011 with comparative information for the year
ended June 30, 2010. Readers are encouraged to consider the information in conjunction with the
ROE #32’s financial statements that follow.
During fiscal year 2011 ROE #32 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 16 to the financial statements. Because of these reclassifications the fund analysis is
not comparable between fiscal year 2010 and fiscal year 2011.
2011 Financial Highlights
 Within the Governmental Funds, the General Fund revenue increased by $1,199,633 (103%) from
$1,161,037 in FY2010 to $2,360,670 in FY2011. General Fund expenditures increased by
$606,892 (50%) from $1,214,126 in FY2010 to $1,821,018 in FY2011. These increases were due
primarily to the increase in General State Aid and State payments made on behalf of the region.
 Within the Governmental Funds, the Education Funds revenue decreased by $993,795 (26%)
from $3,848,182 in FY2010 to $2,854,387 in FY2011. The Education Funds expenditures
decreased by $1,002,349 (27%) from $3,754,140 in FY2010 to $2,751,791 in FY2011. These
decreases were due to the reduction in funding of various programs as well as various programs
that the ROE administered in FY2010 but not in FY2011.
 Proprietary Funds revenue decreased by $89,244 (20%) from $444,060 in FY2010 to $354,816 in
FY2011. The Proprietary Funds expenditures increased by $16,333 (5%) from $330,778 in
FY2010 to $347,111 in FY2011. These changes were due largely to reduction in state and federal
grant funds in FY2011 which reduced local district participation in proprietary programs, as well
as increasing the expenditures from locally generated funds.
 The ROE #32 has no long term debt.
Using This Report
This report consists of a series of financial statements and other information, as follows:
 Management’s Discussion and Analysis introduces financial statements and provides an
analytical overview of the ROE #32’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 ROE #32 as a whole and
present an overall view of the Office’s finances.
16a
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
 Fund financial statements report the ROE #32’s operations in more detail than the government-wide
statements by providing information about the most significant funds.
 Notes to the financial statements provide additional information that is needed for a full
understanding of the data provided in the basic financial statements.
 Required supplementary information further explains and supports the financial statements and
other supplementary information provides detailed information about the major and non-major
funds.
Reporting the Iroquois-Kankakee Regional Office as a Whole
It is important to note that many grants (RESPRO, McKinney Vento Education for Homeless
Children, etc.) are cooperative efforts of ROE #32 and the other ROEs in Area IV. Therefore, these
figures may reflect grants that are intended to serve Iroquois-Kankakee Counties only and also grants
that serve ROE #9, #11, #17, #39 and #54.
The Statement of Net Assets and the Statement of Activities
The government-wide financial statements report information about the ROE #32 as a whole. The
Statement of Net Assets includes all of the 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
using Generally Accepted Accounting Principles and GASB 34.
The government-wide financial statements report the Office’s net assets and how they have changed.
Net assets - the difference between assets and liabilities - are one way to measure the Office’s
financial condition.
 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 ROE #32’s overall financial condition, additional non-financial factors, such as new
laws, rules, regulations, and actions by officials at the State level need to be considered.
We divide the ROE #32’s activities into three broad types:
Regulatory Activities - Supported primarily by the funds of Kankakee County government and
Iroquois County government through a ratified Joint Agreement effectuated in 1995. The activities
include, but are not limited to, Teacher/Administrator Certification, Health/Life Safety Inspections of
school facilities, General Educational Development Administration, Bus Driver Training, etc. as
prescribed in the Illinois School Code, Articles 3 and 3A.
16b
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Service Activities - Supported primarily through funds appropriated by the Illinois General Assembly
and distributed to the Office through the Illinois State Board of Education and through locally
generated fees for service. The activities include assisting schools in all areas of school improvement,
including staff development opportunities for teachers and administrators, etc. as prescribed in 105
ILCS 5/2-3.62.
Ombudsman Activities - Supported through various competitive grants and/or entitlements from
various State and Federal government agencies and including private trusts/contributions. The
activities supported include, but are not limited to, truancy prevention efforts, drug prevention efforts,
attention to homeless children and families, out-of-school time programming, provision of education
for multi-suspended or potentially expelled students, etc.
Fund Financial Statements
The fund financial statements provide detailed information about the Regional Office’s funds. Funds
are accounting devices that allow the tracking of specific sources of funding and spending on
particular programs. Some funds are required by State law. The ROE #32 established other funds to
control and manage money for particular purposes.
The Office has three kinds of funds:
(1) Governmental Funds account for all of the ROE #32’s services. These focus on how cash and
other financial assets that can be readily converted to cash flow in and out and the balances left at
the year-end that are available for spending. Consequently, the governmental fund statements
provide a detailed short-term view that helps determine whether there are more or fewer resources
that can be spent in the near future to finance the Office’s programs. The governmental funds
required financial statements include a Balance Sheet and a Statement of Revenues, Expenditures
and Changes in Fund Balance.
(2) Proprietary Funds account for resources from fees charged directly to those entities or individuals
that use its services. Proprietary fund statements provide both long-term and short-term financial
information consistent with the focus provided by government-wide financial statements but with
more detail for major and non-major enterprise funds. The proprietary funds’ required financial
statements include a Statement of Net Assets, Statement of Revenues, Expenses and Changes in
Fund Net Assets and Statement of Cash Flows.
(3) Fiduciary Funds are used to account for assets held by the ROE #32 in a trust capacity or as an
agent for individuals and private or governmental organizations. These funds are custodial in
nature (assets equal liabilities) and do not involve measurement of results of operations. The
fiduciary funds required financial statements include a Statement of Fiduciary Net Assets.
16c
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Government-Wide Financial Analysis
As noted earlier, net assets may serve, when examined over time, as one indicator of the financial
position of the ROE #32. The net assets at the end of FY2011 and FY2010 totaled $3,137,298 and
$2,569,534, respectively. The analysis that follows provides a summary of the ROE No. 32’s net
assets as of June 30.
CONDENSED STATEMENT OF NET ASSETS
Governmental Activities Business-Type Activities Total
2011 2010 2011 2010 2011 2010
ASSETS
Current assets $2,440,124 $1,528,873 $1,625,448 $1,606,588 $4,065,572 $3,135,461
Noncurrent assets  2,054    2,054
TOTAL ASSETS 2,440,124 1,530,927 1,625,448 1,606,588 4,065,572 3,137,515
LIABILITIES
Current liabilities 907,586 602,380 7 7 907,593 602,387
Non-Current Liabilities 20,681 - - - 20,681 -
TOTAL LIABILITIES 928,267 602,380 7 7 928,274 602,387
NET ASSETS
Invested in capital assets,
net of related debt
- 2,054   - 2,054
Restricted for educational
purposes
172,697 41,017   172,697 41,017
Unrestricted 1,339,160 885,476 1,625,441 1,606,581 2,964,601 2,492,057
TOTAL NET ASSETS $1,511,857 $928,547 $1,625,441 $1,606,581 $3,137,298 $2,535,128
The ROE #32’s net assets increased by $602,170 (24%) from FY2010 to FY2011. The increase
occurred in the governmental activities (cash and cash equivalents). In addition, while the Business-
Type Activities’ assets did increase slightly the liabilities remained the same as FY2010. Also, certain
net assets related to the Education Fund and Nonmajor Special Revenue Funds are considered
restricted for educational purposes and saw a sizable increase.
16d
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
CHANGES IN NET ASSETS
Governmental Activities Business-Type Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services $ 48,436 $ 49,966 $ 354,816 $ 444,060 $ 403,252 $ 494,026
Operating grants and
contributions 2,749,958 3,217,031   2,749,958 3,217,031
General revenues:
State and local sources 1,774,099 1,343,862   1,774,099 1,343,862
Interest income 7,670 8,021 6,747 10,262 14,417 18,283
On-behalf payments 586,571 607,046   586,571 607,046
Total revenues 5,166,734 5,225,926 361,563 454,322 5,528,297 5,680,248
Expenses:
Salaries 1,998,225 2,061,152 126,590 180,719 2,124,815 2,241,871
Benefits 351,945 379,995 25,897 24,304 377,842 404,299
Purchased services 536,565 489,596 148,117 99,694 684,682 589,290
Supplies and materials 146,871 132,396 44,270 23,556 191,141 155,952
Capital expenditures 5,527 4,783 1,085 2,337 6,612 7,120
Payments to other
Governments 978,277 1,409,473   978,277 1,409,473
Miscellaneous 7,387 9,433 1,152 168 8,539 9,601
Depreciation 2,054 4,107 -  2,054 4,107
On-behalf payments 586,571 607,046   586,571 607,046
Total expenses 4,613,422 5,097,981 347,111 330,778 4,960,533 5,428,759
Income (loss) before
operating transfers 553,312 127,945 14,452 123,544 567,764 251,489
Operating transfers 3,259 2,756 (3,259) (2,756)  
Change in net assets 556,571 130,701 11,193 120,788 567,764 251,489
Net assets, beginning 955,286 797,846 1,614,248 1,485,793 2,569,534 2,283,639
Net assets, ending $ 1,511,857 $ 928,547 $ 1,625,441 $ 1,606,581 $ 3,137,298 $ 2,535,128
Governmental Fund Activities
Revenues for FY2011 governmental fund activities were $5,166,734 and expenses were $4,613,422.
Governmental revenues decreased by $59,192 (1%) and expenses decreased by $484,559 (9.5%) The
decrease in revenues appears minimal primarily due to the fact that while there was a sizeable
decrease in grant funding due to state and federal cuts, general revenues increased almost
proportionately. The decrease in expenditures also helped to minimize the effect of the reduced grant
funding.
16e
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Business-Type Activities
Revenues for FY2011 business-type activities were $361,563 and expenditures were $347,111. The
decrease in revenues ($92,759 or 20%) is attributed to the decrease in local revenue received from
school districts for services and trainings conducted in FY2011. The increase in expenditures
($16,333 or 5%) was due largely to the reduction in grant funds making the reliance on local funding
sources necessary.
Financial Analysis of the ROE No. 32 Funds
As previously noted, the ROE #32 uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. The ROE #32’s governmental funds reported combined fund
balances of $1,478,247.
Governmental Fund Highlights
 State funding of Regional Offices of Education has been reduced compared to the previous year.
 The dollar return on investments (certificates of deposit and short-term investments) decreased
due to the lower interest rates.
 County support for the ROE #32 decreased from last year’s funding level.
 There was a decrease in program revenues as several of the operating grants, such as the
Department of Human Services Truancy Review Board, Redeploy Illinois, RESPRO – Title II
Teacher Quality, Title I Reading First, No Child Left Behind Title II English Language Learners,
and the American Recovery and Reinvestment Act General State Aid funds ended during
FY2011.
Proprietary Fund Highlights
Total proprietary fund net assets increased by $18,860 (1%) primarily due to excess of revenues over
expenditures for the proprietary funds.
Fiduciary Fund Highlights
There was a decrease of $238,411 (28%) in total fiduciary fund assets for FY2011. Transactions
represent mainly transfers in and out of funds under the Distributive Fund.
16f
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Budgetary Highlights
The ROE #32 annually adopts budgets for several funds. Budgets for the General Fund and Special
Revenue Fund Accounts are prepared by the Regional Superintendent and serve as a guideline for
activities and expenditures. The typical fiscal year for the State budget is July 1 to June 30. The
Regional Superintendent annually prepares a County Support Budget and submits it to the County
Board for their approval. The County Support Budget covers a fiscal year which runs from December
1 to November 30. All grant budgets are prepared by the ROE #32 and submitted to the granting
agency for approval. Amendments must be submitted under guidelines established by the granting
agency. These fiscal years vary by design of the grants.
Capital Assets
ROE #32’s capital assets include office equipment, computers, audio-visual equipment, and office
furniture. The ROE #32 maintains an inventory of capital assets which have been accumulated over
time. There were no additions and no retirements for FY2011. Depreciation expense for FY2011
was $2,054. As of June 30, 2011, the ROE #32’s capital assets remain in use with $0 remaining to be
depreciated in future fiscal years.
Economic Factors and the FY12 Budget
At the time these financial statements were prepared and audited, the ROE #32 was aware of several
existing circumstances that could affect its financial condition in the future:
 State funding of Regional Offices of Education School Services has been reduced for FY12.
 General State Aid has been reduced for both Students All Learning Together and Regional
Alternative Attendance Center programs for FY12.
 The ROE experienced multiple retirements at the close of FY11 which will effect personnel
expenses for FY12.
 Two TRS eligible employees retired from the office generating retirement expenses that the ROE
has not experienced in previous years.
 The DHS Comprehensive Grant is released for competitive bid during FY12. The office will be
pursuing the grant opportunity.
 The Beginning Teacher Mentoring Program was eliminated for FY12.
 The County Support has increased for FY12.
Contacting the Regional Office’s Financial Management
The financial report is designed to provide a general overview of the Office’s finances and
accountability for the money it receives. If you have questions about the report or desire additional
information, please contact the Regional Superintendent or the Chief Bookkeeper of the Iroquois-
Kankakee Regional Office of Education #32, 189 E. Court Street, Suite 600, Kankakee, IL 60901.
16g
BASIC FINANCIAL STATEMENTS
Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets:
Cash and cash equivalents $ 1,788,066 $ 1,057,244 $ 2,845,310
Due from other funds - 550,704 550,704
Due from other governments 652,058 17,500 669,558
Total Current Assets 2,440,124 1,625,448 4,065,572
Noncurrent Assets:
Capital assets, being depreciated, net - - -
Total Noncurrent Assets - - -
TOTAL ASSETS 2,440,124 1,625,448 4,065,572
LIABILITIES
Current Liabilities:
Accounts payable 292,569 7 292,576
Due to other funds 550,704 - 550,704
Due to other governments 7,821 - 7,821
Deferred revenue 56,492 - 56,492
Total Current Liabilities 907,586 7 907,593
Noncurrent Liabilities:
Other post-employment benefit obligation 20,681 - 20,681
Total Noncurrent Liabilities 20,681 - 20,681
TOTAL LIABILITIES 928,267 7 928,274
NET ASSETS
Invested in capital assets, net of related debt - - -
Restricted for educational purposes 172,697 - 172,697
Unrestricted 1,339,160 1,625,441 2,964,601
TOTAL NET ASSETS $ 1,511,857 $ 1,625,441 $ 3,137,298
Primary Government
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
STATEMENT OF NET ASSETS
June 30, 2011
The notes to the financial statements are an integral part of this statement.
17
Program Revenues
Operating
Charges for Grants and Governmental Business-Type
FUNCTIONS/PROGRAMS Expenses Services Contributions Activities Actvities Total
Primary government:
Governmental activities:
Instructional Services
Salaries $ 1,998,225 $ 8,991 $ 1,113,963 $ (875,271) $ - $ (875,271)
Employee benefits 351,945 3,170 163,988 (184,787) - (184,787)
Purchased services 536,565 6,495 368,205 (161,865) - (161,865)
Supplies and materials 146,871 3,484 119,998 (23,389) - (23,389)
Other 7,387 1,183 - (6,204) - (6,204)
Payments to other governments 978,277 25,113 978,277 25,113 - 25,113
Depreciation 2,054 - - (2,054) - (2,054)
Capital outlay 5,527 - 5,527 - - -
Administrative
On-behalf payments - State 586,571 - - (586,571) - (586,571)
Total governmental activities 4,613,422 48,436 2,749,958 (1,815,028) - (1,815,028)
Business-type activities:
Professional development 347,111 354,816 - - 7,705 7,705
Total business-type activities 347,111 354,816 - - 7,705 7,705
Total Primary Government $ 4,960,533 $ 403,252 $ 2,749,958 (1,815,028) 7,705 (1,807,323)
General revenues
Local sources 486,979 - 486,979
State sources 1,287,120 - 1,287,120
On-behalf payments - State 586,571 - 586,571
Interest 7,670 6,747 14,417
Transfers 3,259 (3,259) -
Total general revenues and transfers 2,371,599 3,488 2,375,087
CHANGE IN NET ASSETS 556,571 11,193 567,764
NET ASSETS - BEGINNING (RESTATED) 955,286 1,614,248 2,569,534
NET ASSETS - ENDING $ 1,511,857 $ 1,625,441 $ 3,137,298
Changes in Net Assets
Primary Government
Net (Expense) Revenue and
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2011
The notes to the financial statements are an integral part of this statement.
18
Other Total
General Education Non-Major Governmental
Fund Fund Funds Eliminations Funds
ASSETS
Cash and cash equivalents $ 1,368,663 $ 276,316 $ 143,087 $ - $ 1,788,066
Due from other funds 285 - - (285) -
Due from other governments 100,260 551,798 - - 652,058
TOTAL ASSETS $ 1,469,208 $ 828,114 $ 143,087 $ (285) $ 2,440,124
LIABILITIES AND FUND BALANCES
Liabilities
Accounts payable $ 94,562 $ 198,007 $ - $ - $ 292,569
Due to other funds - 550,989 - (285) 550,704
Due to other governments - 7,821 - - 7,821
Deferred revenue - 110,783 - - 110,783
Total Liabilities 94,562 867,600 - (285) 961,877
Fund Balances
Restricted - 14,805 143,087 - 157,892
Unassigned 1,374,646 (54,291) - - 1,320,355
Total Fund Balances 1,374,646 (39,486) 143,087 - 1,478,247
TOTAL LIABILITIES AND
FUND BALANCES $ 1,469,208 $ 828,114 $ 143,087 $ (285) $ 2,440,124
REGIONAL OFFICE OF EDUCATION #32
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2011
IROQUOIS AND KANKAKEE COUNTIES
The notes to the financial statements are an integral part of this statement.
19
TOTAL FUND BALANCES - GOVERNMENTAL FUNDS $ 1,478,247
Amounts reported for governmental activities in the Statement of Net
Assets are different because:
Some revenues will not be collected for several months after the Regional
Office's fiscal year ends. They are not considered "available" revenues
and are deferred in the governmental funds. 54,291
Capital assets used in governmental activities are not financial resources
and therefore, are not reported in the funds, net of accumulated
depreciation of $27,031 -
Long-term liabilities are not due and payable in the current period and;
therefore, are not reported in the funds. (20,681)
NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 1,511,857
REGIONAL OFFICE OF EDUCATION #32
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
June 30, 2011
IROQUOIS AND KANKAKEE COUNTIES
TO THE STATEMENT OF NET ASSETS
The notes to the financial statements are an integral part of this statement.
20
Other Total
General Education Non-Major Governmental
Fund Fund Funds Eliminations Funds
REVENUES
Local sources $ 486,979 $ - $ 47,150 $ - $ 534,129
State sources 1,287,120 905,943 1,286 - 2,194,349
State sources - payments made on behalf of region 586,571 - - - 586,571
Federal sources - 1,948,444 - - 1,948,444
Total Revenues 2,360,670 2,854,387 48,436 - 5,263,493
EXPENDITURES
Instructional Services:
Salaries 868,242 1,115,119 14,864 - 1,998,225
Employee benefits 182,546 164,158 5,241 - 351,945
Purchased services 157,240 368,587 10,738 - 536,565
Supplies and materials 20,988 120,123 5,760 - 146,871
Other 5,431 - 1,956 - 7,387
Payments to other governments - 978,277 - - 978,277
Payments made on behalf of region 586,571 - - - 586,571
Capital outlay - 5,527 - - 5,527
Total Expenditures 1,821,018 2,751,791 38,559 - 4,611,368
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 539,652 102,596 9,877 - 652,125
OTHER FINANCING SOURCES (USES)
Transfers in 2,161 3,483 - ( 2,385) 3,259
Transfers out ( 2,161) ( 224) - 2,385 -
Interest 5,949 543 1,178 7,670
Total Other Financing Sources (Uses) 5,949 3,802 1,178 - 10,929
NET CHANGE IN FUND BALANCES 545,601 106,398 11,055 - 663,054
FUND BALANCES - BEGINNING (RESTATED) 829,045 ( 145,884) 132,032 - 815,193
FUND BALANCES - ENDING $ 1,374,646 $ ( 39,486) $ 143,087 $ - $ 1,478,247
REGIONAL OFFICE OF EDUCATION #32
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
For the Year Ended June 30, 2011
GOVERNMENTAL FUNDS
IROQUOIS AND KANKAKEE COUNTIES
The notes to the financial statements are an integral part of this statement.
21
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2011
NET CHANGE IN FUND BALANCES $ 663,054
Amounts reported for governmental activities in the Statement of Activities are
different because:
Depreciation Expense (2,054)
FY2010 deferred revenue recognized in FY2011 - State sources (145,296)
FY2010 deferred revenue recognized in FY2011 - Federal sources (13,424)
FY2011 revenue deferred - State sources 30,956
FY2011 revenue deferred - Federal sources 23,335 (104,429)
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 556,571
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
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.
Governmental funds report capital outlays as expenditures and proceeds from
disposals as revenue. However, in the Statement of Activities the cost of those
assets, which meet capitalization requirements, is allocated over their estimated
useful lives and reported as depreciation expense and gains and losses are
reported on disposals.
The notes to the financial statements are an integral part of this statement.
22
Life Safe Nonmajor
Education Schools Truant Proprietary
Local Local Local Funds Eliminations Total
ASSETS
Current assets:
Cash and cash equivalents $ 153,805 $ 665,325 $ 93,862 $ 144,252 $ - $ 1,057,244
Due from other funds 64,820 229,496 146,399 109,989 - 550,704
Due from other governments - 10,000 - 7,500 - 17,500
Total current assets 218,625 904,821 240,261 261,741 - 1,625,448
LIABILITIES
Current liabilities:
Accounts payable - - - 7 - 7
Due to other funds - - - - - -
Total current liabilities - - - 7 - 7
NET ASSETS
Unrestricted 218,625 904,821 240,261 261,734 - 1,625,441
TOTAL NET ASSETS $ 218,625 $ 904,821 $ 240,261 $ 261,734 $ - $ 1,625,441
Business-Type Activities - Enterprise Funds
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
June 30, 2011
The notes to the financial statements are an integral part of this statement.
23
Life Safe Nonmajor
Education Schools Truant Proprietary
Local Local Local Funds Eliminations Total
OPERATING REVENUES
Local sources $ 56,027 $ 151,741 $ 70,976 $ 76,072 $ - $ 354,816
Total operating revenues 56,027 151,741 70,976 76,072 - 354,816
OPERATING EXPENSES
Salaries 31,058 41,671 43,069 10,792 - 126,590
Employee benefits 2,362 13,259 8,199 2,077 - 25,897
Purchased Services 23,834 44,402 10,113 69,768 - 148,117
Supplies and materials 9,345 3,242 15,728 15,955 - 44,270
Capital outlay - 1,085 - - - 1,085
Other - - - 1,152 - 1,152
Total operating expenses 66,599 103,659 77,109 99,744 - 347,111
OPERATING INCOME (LOSS) ( 10,572) 48,082 ( 6,133) ( 23,672) - 7,705
NONOPERATING REVENUES (EXPENSES)
Transfers in - - - 30,641 ( 30,641) -
Transfers out - ( 3) ( 720) ( 33,177) 30,641 ( 3,259)
Interest 864 3,803 986 1,094 - 6,747
Total nonoperating revenues (expenses) 864 3,800 266 ( 1,442) - 3,488
CHANGE IN NET ASSETS (9,708) 51,882 ( 5,867) ( 25,114) - 11,193
TOTAL NET ASSETS - BEGINNING (RESTATED) 228,333 852,939 246,128 286,848 - 1,614,248
TOTAL NET ASSETS - ENDING $ 218,625 $ 904,821 $ 240,261 $ 261,734 $ - $ 1,625,441
Business-Type Activities - Enterprise Funds
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended June 30, 2011
The notes to the financial statements are an integral part of this statement.
24
Life Safe Nonmajor
Education Schools Truant Proprietary
Local Local Local Funds Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 56,027 $ 147,960 $ 70,976 $ 68,572 $ 343,535
Payments to suppliers and providers of goods
and services ( 33,179) ( 48,729) ( 25,841) ( 86,875) (194,624)
Payments to employees ( 33,420) ( 54,930) ( 51,268) ( 12,869) (152,487)
Net cash provided by (used for) operating activities ( 10,572) 44,301 ( 6,133) ( 31,172) ( 3,576)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Cash transfers from other funds - - - 30,641 30,641
Cash transfers to other funds - (3) (720) ( 33,177) (33,900)
Increase (decrease) in interfund borrowing, net ( 64,820) (229,496) (146,399) (109,989) (550,704)
Net cash provided by (used for) noncapital financing activities ( 64,820) (229,499) (147,119) (112,525) (553,963)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest 864 3,803 986 1,094 6,747
Net cash provided by (used for) investing activities 864 3,803 986 1,094 6,747
Net increase (decrease) in cash ( 74,528) (181,395) (152,266) (142,603) (550,792)
CASH AND CASH EQUIVALENTS - BEGINNING (RESTATED) 228,333 846,720 246,128 286,855 1,608,036
CASH AND CASH EQUIVALENTS - ENDING $ 153,805 $ 665,325 $ 93,862 $ 144,252 $ 1,057,244
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES
Operating income (loss) $ (10,572) $ 48,082 $ (6,133) $ (23,672) $ 7,705
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Change in assets and liabilities:
(Increase) decrease in due from other governments - ( 3,781) - ( 7,500) (11,281)
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ (10,572) $ 44,301 $ (6,133) $ (31,172) $ (3,576)
Business-Type Activities - Enterprise Funds
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended June 30, 2011
The notes to the financial statements are an integral part of this statement.
25
Agency
Funds
ASSETS
Cash $ 1,958
Due from other governments 623,373
TOTAL ASSETS $ 625,331
LIABILITIES
Due to other governments $ 625,331
REGIONAL OFFICE OF EDUCATION #32
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUND
June 30, 2011
IROQUOIS AND KANKAKEE COUNTIES
The notes to the financial statements are an integral part of this statement.
26
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Regional Office of Education #32 was formed under the provisions of the State of Illinois, Illinois State
Board of Education.
In 2011, the Regional Office of Education #32 implemented Governmental Accounting Standards Board
(GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, GASB
Statement No. 59, Financial Instruments Omnibus, and GASB Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. The Regional Office of Education #32 implemented these standards during the current
year; however, GASB Statements No. 59 and 62 had no impact on the financial statements. The
implementation of GASB Statement No. 54 changed fund balance reporting for governmental funds by
adding some additional fund balance classifications, clarifying governmental fund type definitions, and
providing additional disclosures on how fund balance constraints are imposed and may be modified or
eliminated.
A. Date of Management’s Review
Management has evaluated subsequent events through March 21, 2012, the date when the financial
statements were available to be issued.
B. Financial Reporting Entity
The Regional Superintendent is responsible for supervision and control of school districts within the
Regional Office of Education #32. This includes all aspects of supervision, reports and financial accounting
of districts which are considered by State law to be in the Service Region. In addition, the Regional
Superintendent is charged with responsibility for registration of the names of applicants for scholarships to
State controlled universities; examinations and related duties; visitation of public schools; direction of
teachers and school officers; to serve as the official advisor and assistant of school officers and teachers; to
conduct teachers institutes as well as to aid and encourage the formation of other teachers’ meetings and
assist in their management; evaluate the schools in the region; examine evidence of indebtedness; file and
keep the returns of elections required to be returned to the Regional Superintendent’s office; and file and
keep the reports and statements returned by school treasurers and trustees.
The Regional Superintendent is also charged with the responsibilities of conducting a special census, when
required; providing notice of money distributed to treasurers, board presidents, clerks, and secretaries of the
school districts on or before each September 30; maintenance of a map and numbering of the Regional
Office of Education #32’s districts; providing township treasurers with a list of district treasurers; to inspect
and approve building plans which comply with State law; to perform and report on annual building
inspections; investigate bus drivers for valid bus driver permits and take related action as may be required;
to maintain a list of unfilled teaching positions and to carry out other related duties required or permitted by
law.
27
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Financial Reporting Entity (Concluded)
The Regional Superintendent is responsible for inspection and approval or rejection of school treasurer’s
bonds. The Regional Superintendent is also required to provide the State Board of Education with an
affidavit showing that the treasurers of school districts under her control are properly bonded.
The Regional Superintendent is also responsible for apportionment and payment of funds received from the
State for the districts in the Regional Office of Education #32, or see that no payments are made unless the
treasurer has filed or renewed appropriate bonds and that the district has certified publication of the annual
financial report. The Regional Superintendent is required to provide opinions and advice related to
controversies under school law.
For the period ended June 30, 2011, the Regional Office of Education #32 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 #32. Such activities are reported as a single
major special revenue fund (Education Fund).
C. Scope of Reporting Entity
The Regional Office of Education #32’s reporting entity includes all related organizations for which they
exercise oversight responsibility.
The Regional Office of Education #32 has developed criteria to determine whether outside agencies with
activities which benefit the citizens of the Iroquois and Kankakee Counties, 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 #32 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 #32 does not control the assets, operations, or management of the districts or joint agreements. In
addition, the Regional Office of Education #32 is not aware of any entity, which would exercise such
oversight as to result in the Regional Office of Education #32 being considered a component unit of the
entity.
28
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Government-Wide and Fund Financial Statements
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 #32’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 #32’s government-wide financial statements include a Statement of Net
Assets and a Statement of Activities. These statements present summaries of governmental and business-type
activities for the Regional Office of Education #32 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 #32’s assets and liabilities, including capital assets, are included in
the accompanying Statement of Net Assets. The Statement of Activities demonstrates the degree to which
the direct expenses of a given function are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function. Program revenues include (1) charges for services, and (2)
grants and contributions that are restricted to meeting operational or capital requirements of a particular
function.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and proprietary funds are reported as separate columns in the fund financial statements.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, such as, payables, receivables and transfers. Interfund activities between governmental funds and
between governmental funds and proprietary funds appear as due to/due from on the governmental fund
Balance Sheet and proprietary fund Statement of Net Assets and as other sources and other uses on the
governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances and the proprietary
fund Statement of Revenues, Expenses, and Changes in Fund Net Assets. All interfund transactions
between governmental funds are eliminated on the government-wide financial statements. Interfund
activities between governmental funds and business-type funds remain as due to/due from on the
government-wide financial statements.
The purpose of interfund borrowing and permanent transfers is to cover temporary or permanent shortfalls in
cash flow within grant programs and funds.
E. Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues, Expenses
and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary fund and
nonmajor funds aggregated.
29
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Proprietary Fund Financial Statements (Concluded)
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual
basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on
the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Fund Net Assets present
increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the period
in which the liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary
operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are
those expenses that are essential to the primary operations of the fund. All other expenses are reported as
non-operating expenses.
F. Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund
balances and changes in fund balances as presented in these statements to the net assets and changes in net
assets presented in the government-wide financial statements.
The governmental fund financial statements have been prepared in accordance with generally accepted
accounting principles on the modified accrual basis. Under modified accrual basis of accounting, revenues
are recorded when susceptible to accrual i.e., both measurable and available. Available means collectible
within the current period or soon enough thereafter to be used to pay liabilities of the current period.
Revenues received more than 60 days after the end of the current period are deferred in the governmental
fund financial statements but are recognized as current revenues in the government-wide financial
statements. Expenditures are recognized in the accounting period in which the fund liability is incurred, if
measurable, except expenditures for prepaid expenses and other long-term obligations, which are recognized
when paid.
G. Measurement Focus and Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized
as revenue as soon as all eligibility requirements imposed by the grantor have been met.
30
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Measurement Focus and Basis of Accounting (Concluded)
The governmental funds financial statements focus on the measurement of spending or "financial flow" and
the determination of changes in financial position, rather than upon net income determination. This means
that only current assets and current liabilities are generally included on their balance sheets. Their reported
fund balance (net current assets) is considered a measure of "available spendable resources." Governmental
fund operating statements present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they are said to present a
summary of sources and uses of "available spendable resources" during a period.
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual
requirements of the numerous individual programs are used as guidance. There are however, essentially two
types of these revenues. In one, monies must be expended on the specific purpose or project before any
amounts will be paid to the Regional Office of Education #32; therefore, revenues are recognized based
upon the expenditures recorded. In the other, monies are virtually unrestricted as to purpose of expenditure
and are usually recoverable only for failure to comply with prescribed compliance requirements. These
resources are reflected as revenues at the time of receipt or earlier if the susceptible to accrual criteria are
met.
Under the terms of grant agreements, Regional Office of Education #32 funds certain programs by a
combination of specific cost-reimbursement grants and general revenues. Thus, when program expenses are
incurred, there are both restricted and unrestricted resources available to finance the program. It is Regional
Office of Education #32’s policy to first apply restricted funds, then unrestricted. For unrestricted funds,
committed funds are used first, then assigned funds, then unassigned if any.
H. Fund Accounting
The Regional Office of Education #32 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 #32 uses governmental, proprietary, and fiduciary funds.
Governmental funds are those through which most governmental functions of the Regional Office of
Education #32 are typically 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
a fund balance.
31
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds
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 #32 has presented all major funds that met the above qualifications.
The Regional Office of Education #32 reports the following major governmental funds:
General Fund - The General Fund is the general operating fund of the Regional Office of Education #32. It is
used to account for all financial resources, which benefit all school districts in the region except those
required to be accounted for and reported in another fund. General funds include the following:
General Operations – This fund accounts for monies received for, and payment of expenditures in
connection with general administration activities.
General State Aid - This fund accounts for grant monies received for and payment of expenditures for
the regional learning supplements.
Major Special Revenue Funds - Special Revenue Funds are used to account for and report the proceeds of
specific revenue sources that are restricted to expenditures for specified purposes other than debt services or
capital projects. Major special revenue funds include the following:
Education - This fund is used to account for various grant and educational enhancement programs
including the following:
Addiction Prevention Comprehensive - This fund accounts for the federal, State, and local revenue
received and expended under the drug prevention program developed and funded by the State Board
of Education and the Illinois Department of Human Services. The school-based program focuses on
prevention and coordination of school policies, curriculum, family support, and community
activities to provide comprehensive addiction prevention efforts.
American Recovery and Reinvestment Act (ARRA) –Education Jobs Fund – This fund provides
assistance in saving or creating education jobs during the 2010-2011 school year.
32
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds (Continued)
ARRA McKinney Education for Homeless Children - This fund provides educational services and
strives to heighten community awareness of the need to serve the homeless population and is funded
by the American Reinvestment and Recovery Act.
ARRA – Title I – School Improvement and Accountability - The purpose of this grant is provide
school improvement support and assistance to schools through analyzing student achievement,
refining school improvement plans and strategies, and providing meaningful professional
development aligned to the schools’ goals and strategies.
Child Protection Data Courts (CPDC) Project – These funds, received from the Administrative
Office of the Illinois Courts (AOIC), are used to perform data collection, on-site visits, local CPDC
meetings, CPDC project networking meetings, data-related activity, and technical assistance.
Gifted Education – This fund accounts for grant money received for and the expenditures incurred
to train and assist school districts in designing programs and coursework for gifted learners.
HUD Supportive Housing Program – This fund accounts for grant money received from the U.S.
Department of Housing and Urban Development for the Supportive Housing grant. Funds are used
to provide case management, information and referral, and transportation services for homeless
families with children, helping the families to meet their basic needs and obtain permanent housing.
Illinois Violence Prevention Authority (IVPA) Family Violence Coordinating Council – This fund
accounts for funds received from IVPA to provide community awareness, coordination and training
to impede family violence.
McKinney Education for Homeless Children - The fund accounts for grant monies associated with a
federal program designed to provide counseling and education support to homeless children and
their families. This program is funded by the Stewart B. McKinney Education for Homeless
Children and Youth grant.
National Board of Professional Teaching Standards Mentoring Program – This fund accounts for
grant monies received for and the payment of expenditures related to professional trainings and
certifications provided to teachers to achieve national board certification.
National School Breakfast – This fund accounts for the proceeds received and expended in the
operations of the free breakfast program.
National School Lunch – This fund accounts for grant monies received and expended in the
operations of the National School Lunch program.
33
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds (Continued)
Preschool for All – This fund accounts for grant monies received to offer high quality, voluntary,
2.5-hour preschool programs to all three- and four-year-old children. The goal of the program is to
ensure all children are well prepared to succeed in school and in life.
Regional Safe Schools - This fund provides instruction services and materials for the alternative
school program for at-risk youth, creating alternative placement for those students into a safe school
program.
Regional Office of Education/ Intermediate Service Centers (ROE/ISC) Operations – This fund
accounts for monies received and payment of expenditures in assisting schools in all areas of school
improvement.
School Breakfast Incentive – This fund accounts for monies received and payment of expenditures
in assisting schools in starting up a school breakfast program.
State Free Lunch and Breakfast – This fund accounts for the proceeds received and expended in the
operations of the free lunch and breakfast program.
Teachers & Administrators Mentoring Program – This fund accounts for grant money received for
and expenditures incurred to support the state-wide new teacher mentoring program that includes
assigning a mentor teacher to each new teacher for a period of at least two years and providing
professional development designed to ensure the growth of the new teachers’ knowledge and skills.
Teen Reach - This fund accounts for grant monies received for and expenditures incurred for the
drug prevention program funded by the State Board of Education and the Illinois Department of
Human Services. The program focuses on improving academic performance, prevent violence and
risky behaviors, encourage parental involvement, and create opportunities for recreation and sports
activities for the youth ages 6-17.
Title I – Reading First Part B SEA Funds - This fund provides comprehensive reading program
training to Reading First coaches in order to facilitate student achievement in reading.
Title I School Improvement and Accountability System of Support – This fund supports the
improvement of basic programs operated by the Regional Office of Education #32 by providing
professional development for data analysis, school improvement plan/development, standards-aligned
curriculum/instruction, and classroom assessment to System of Support status schools on the
Academic Early Warning and Watch.
34
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Governmental Funds (Concluded)
Title II Teacher Quality – This fund accounts for federal grant money received and expenditures
incurred for improvement of instruction in the classroom.
Title II Teacher Quality – Leadership Grant – This fund accounts for grant money received for and
expenditures incurred in providing training and professional development for the improvement of
teacher preparation programs.
Title II Teacher Quality Leadership Grant System of Support – This fund provides professional
development to assist teachers in becoming better instructional leaders.
Truants’ Alternative Program – This fund provides alternative educational program services to
truant students referred from local schools to the Regional Office of Education #32.
Truancy Review Board – This fund accounts for grant money received and expenditures incurred to
develop and maintain a functioning Truancy Review Board (TRB). The Board will develop overall
policies and procedures for identifying, reviewing, and accepting truancy cases.
Nonmajor Special Revenue Funds - Special Revenue Funds are used to account for and report the proceeds
of specific revenue sources that are restricted to expenditures for specified purposes other than debt service
or capital projects. Nonmajor special revenue funds include the following:
Bus Driver Training - This fund accounts for State and local receipts and expenses as a result of training
school district bus drivers.
General Education Development - This fund accounts for proceeds earned from students who participate
in the high school equivalence program. These proceeds are used to pay the administrative expenses
incurred to administer the GED program.
Institute - This fund accounts for teacher certificate registration, issuance and evaluation fees for
processing certificates, and expenses of meetings of a professional nature. The Regional Superintendent
uses these proceeds to pay administration expenses incurred on behalf of the teachers’ institute
certificates, workshops, and general meetings. All funds generated remain restricted until expended
only on the aforementioned activities.
Project Care Healthy Decision – This fund accounts for revenue received and expenditures incurred in
providing a suicide hotline for students.
35
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Proprietary Funds
Proprietary funds are those in which revenues and expenses related to services provided to organizations
inside the Regional Office of Education #32 on a cost reimbursement basis are reported.
Major Proprietary Funds – The Regional Office of Education #32 reports the following proprietary funds as
major funds:
Life Education – Local – This fund accounts for local revenues received and related disbursements for
the Life Education program.
Safe Schools – Local – This fund accounts for local revenues and disbursements related to the Safe
School program.
Truant – Local – This fund accounts for local revenues and disbursements related to the Truant
programs.
Nonmajor Proprietary Funds – The Regional Office of Education #32 reports the following nonmajor
proprietary funds:
Administrator’s Academy – Local – This fund accounts for local revenues and disbursements related to
the Administrators Academy Program.
Career Awareness and Development Workshop – This fund accounts for local revenues and
disbursements related to the Career Awareness and Development workshop.
Children and Adolescent Local Area Network System – This fund accounts for money received by the
Regional Office of Education #32 upon the closure of the local organization, C &A LANS. This fund is
used to service at-risk youth.
Criminal Background Investigation – This fund accounts for the assessments received from the school
districts to pay for the processing of fingerprinting the substitute teachers and expenditures incurred
providing this service to the school districts.
Family Violence Coordinating Councils - This fund accounts for funds received to provide community
awareness, coordination and training to impede family violence.
Fluoride Fund – This fund accounts for revenues and expenses of the Fluoride Program. The objective
of this program is to prevent tooth decay among students.
36
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Continued)
Proprietary Funds (Continued)
Gifted Education Workshop – This fund accounts for revenues and expenses of the Gifted Education
teacher development workshops.
Internet Connectivity – This fund accounts for local revenues and disbursements for the Internet
Connectivity Program.
Local Induction Mentoring Training Fees – This fund accounts for local revenues and disbursements for
Induction/ Mentoring Training programs.
Para-Professional Workshop Fees – This fund accounts for local revenues and disbursements related to
the Para-professional Test Preparatory Course program.
RAAC Renaissance Program – This fund accounts for local revenues and disbursements related to the
Regional Alternative Attendance Center Renaissance program.
Reading First Academy Workshops – This fund accounts for local revenues and disbursements related to
the Illinois Reading First Academy.
Regional Alternative Attendance Center (RAAC) – This fund accounts for local revenues and
disbursements related to the RAAC Activity Fund.
ROE Workshops – This fund accounts for local revenues and disbursements related to various
workshops conducted by the Regional Office of Education #32 which are not accounted for in a separate
fund.
SALT Activity – This fund accounts for local revenues and disbursements related to activities under the
Students All Learning Together program.
School Crisis Assistance Team (SCAT) Donations – This fund accounts for donations and related
disbursements for the School Crisis Assistance Team.
School Lunch Student Payments – This fund accounts for local revenues and disbursements for the
Students School Lunch program.
Services Provided HUD – This fund accounts for local revenues and disbursements in providing
supplemental education for students from low-income families.
Supplemental Educational Services – This fund accounts for local revenues and disbursements in
providing supplemental education for students from low-income families.
37
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Fund Accounting (Concluded)
Proprietary Funds (Concluded)
Teen Reach Local Program – This fund accounts for local revenues and disbursements related to the
Teen Reach program.
Title I Workshops – This fund accounts for local revenues and disbursements for workshops related to
the Title I School Improvement & Accountability program.
Fiduciary Funds
Agency Funds - Agency Funds are used to account for assets held by the Regional Office of Education #32
in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or
other funds. These funds are custodial in nature (assets equal liabilities) and do not involve measurement of
results of operations. Agency funds include the following:
Distributive Fund - This fund distributes federal and State funds to school districts and other entities
under the oversight of the Regional Superintendent. Interest revenue earned on the custodial funds
collected is part of the overall revenue of the General Fund. This treatment is in accordance with an
agreement between the Regional Office of Education #32 and all the school boards within the Iroquois
and Kankakee Counties Regional Office of Education #32.
Petitions and Detachment – This fund accounts for the receipts and disbursements related to petitions
filed for annexation or detachment of school district boundaries.
Scholarship – This fund accounts for receipts and disbursement of scholarship awards to selected
individuals.
School Expansion Fees – This fund accounts for revenues and expenses incurred for fees levied by the
County for school district applications for new developments within the area/city limits.
I. Governmental Fund Balances
Fund balance is the difference between assets and liabilities in a governmental fund. The following types of
fund balances may be presented in the Governmental Funds Balance Sheet and Governmental Funds
Combining Schedule of Accounts:
Nonspendable Fund Balance – The portion of a governmental fund’s net assets that are not available to
be spent, either short term or long term, in either form or through legal restrictions. The Regional Office
of Education #32 has no nonspendable fund balances.
38
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Governmental Fund Balances (Concluded)
Restricted Fund Balance – The portion of a governmental fund’s net assets that are subject to external
enforceable legal restrictions. The following Nonmajor Special Revenue Funds are restricted by Illinois
Statute: Bus Driver Training, General Education Development, and Institute. The Project Care Healthy
Decision funds are restricted by its grantor. The following Education Fund accounts are restricted by
the grantor: National School Breakfast, National School Lunch, and State Free Lunch and Breakfast.
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 #32 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. There are no accounts that have an assigned fund
balance.
Unassigned Fund Balance – Available expendable financial resources in a governmental fund that are
not designated for a specific purpose. The following General Fund accounts have unassigned fund
balances: General Operations and General State Aid. The following Education Fund accounts have
unassigned fund balances: Regional Safe Schools, Teen Reach, and Truants’ Alternative Program.
J. Net Assets
Equity is classified as net assets and displayed in three components:
Invested in capital assets - Consists of capital assets, net of accumulated depreciation.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or
"invested in capital assets."
K. Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit. The Regional Office of Education #32 considers all
liquid investments with a maturity of three months or less when purchased to be cash equivalents.
39
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
L. Capital Assets
Capital assets purchased or acquired with an original cost of $5,000 or more and estimated useful lives of
greater than 1 year are reported at historical cost or estimated historical cost. Contributed assets are
recorded at fair market value as of the date received. Additions, improvements and other capital outlays that
significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. Capital assets are depreciated using the straight-line method over the
following estimated useful lives:
Office Equipment and Furniture 5-10 years
Computer Equipment 3 - 5 years
Other Equipment 5-20 years
M. Interfund Receivables and Payables
The recordings of due from and due to other funds are a result of various borrowings between funds during
the year.
N. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
O. Budget Information
The Regional Office of Education #32 acts as the administrative agent for certain grant programs that are
accounted for within the General Fund and the Education Fund. These programs have separate budgets and
are required to be reported to the Illinois State Board of Education and other granting agencies; however,
none of the annual budgets have been legally adopted, nor are they required to do so. Certain programs
within the General Fund and the Special Revenue Fund do not have separate budgets. Comparisons of
budgeted and actual results for the following programs are presented as supplementary information:
Addiction Prevention Comprehensive, ARRA McKinney Education for Homeless Children, ARRA Title I
School Improvement and Accountability, CPDC Project, Gifted Education, IVPA Family Violence
Coordinating Council, McKinney Education for Homeless Children, National Board of Professional
Teaching Standards Mentoring Program, Preschool for All, Regional Safe Schools, ROE/ISC Operations,
Teachers and Administrators Mentoring Program, Teen Reach, Title I Reading First Part B SEA Funds, Title
I School Improvement & Accountability System of Support, Title II Teacher Quality, Title II Teacher
Quality Leadership Grant, Title II Teacher Leadership Grant System of Support, and Truants’ Alternative
Program.
40
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)
P. Long-Term Obligations
Long-term liabilities are reported only on the Statement of Net Assets and consist of other postemployment
benefits as discussed further in Note 5.
Q. Compensated Absences
The Regional Office of Education #32 provides paid vacation time for its full-time employees who work all
twelve months of the year. Unused vacation time does not accumulate and carryover to future calendar
years. Sick pay may accumulate for full-time employees of the In-Touch Program up to a maximum of 180
days. Unused sick pay for these employees may be certified in writing to the next employer at the request of
the employee at the time of re-employment elsewhere. Unused sick pay for those employees may be used as
service credits toward the employee’s retirement fund when the employee retires. Employees of all other
programs may not accumulate and carryover unused sick pay to future years. There are no material
accumulations of sick pay or vacation pay at June 30, 2011.
NOTE 2: CASH AND CASH EQUIVALENTS
The Regional Office of Education #32 does not have a formal investment policy. The Regional Office of
Education #32 is allowed to invest in securities as authorized by 30 ILCS-235/2 and 6 and 105 ILCS-5/8-7.
A. Cash Deposits
At June 30, 2011, the carrying amount of the Regional Office of Education #32’s government-wide and
fiduciary fund deposits were $2,845,310 and $1,958 respectively, and the bank balances were $3,061,085
and $1,958, respectively.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the Regional Office of Education’s
deposits may not be returned to it. The Regional Office of Education #32’s deposit and investment policy
states that in order to protect its deposits, depository institutions are to maintain collateral pledges on the
Regional Office of Education #32’s deposits during the term of the deposit. Collateral is required as
security whenever deposits exceed the insured limits of the FDIC.
At June 30, 2011, $344,562 of the Regional Office of Education #32’s cash deposits was insured by the
Federal Deposit Insurance Corporation. Another $2,710,183 was collateralized by securities pledged by the
Regional Office of Education #32’s financial institution in the name of the Regional Office.
B. Investments
The Regional Office of Education #32’s established investment policy follows the State of Illinois Public
41
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 2: CASH AND CASH EQUIVALENTS (CONCLUDED)
B. Investments (Concluded)
Funds Investment Act which authorizes the Regional Office of Education #32 to purchase certain obligations of
the U.S. Treasury, federal agencies and instrumentalities; certificates of deposit and time deposits covered by
Federal depository insurance; commercial paper of U.S. corporations with assets exceeding $50,000,000 if such
paper is rated at the highest classification established by at least two standard rating services; money market funds;
and the Illinois Funds.
The Regional Office of Education #32 has pooled its investments. As of June 30, 2011, the Regional Office of
Education #32 had investments with carrying and fair values of $8,298 invested in the Illinois Funds Money
Market Fund.
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. 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.
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 Fund 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.
Concentration of Credit Risk
Unless specifically authorized by the Treasurer, the Illinois Funds Money Market Fund’s investment policy limits
investment categories to not exceed 25% of the portfolio with the exception of cash equivalents and U.S. Treasury
securities. Further certificates of deposit cannot exceed 10% of any single financial institution’s total deposits.
NOTE 3: DEFINED BENEFIT PENSION PLAN
Plan Description. The Regional Office of Education #32’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 #32’s plan is affiliated with the Illinois Municipal Retirement
Fund (IMRF), an agent multiple-employer plan. Benefit provisions are established by statute and may only be
changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that
includes financial statements and required supplementary information. That report may be obtained on line at
www.imrf.org.
42
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 3: DEFINED BENEFIT PENSION PLAN (CONCLUDED)
Funding Policy. As set by statute, the Regional Office of Education #32’s Regular plan members are
required to contribute 4.50% of their annual covered salary. The statute requires employers to contribute the
amount necessary, in addition to member contributions, to finance the retirement coverage of its own
employees. The employer contribution rate for calendar year 2010 was 8.49% of annual covered payroll.
The employer annual required contribution rate for calendar year 2010 was 10.68%. The Regional Office of
Education #32 also contributes for disability benefits, death benefits and supplemental retirement benefits,
all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the
IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute.
Annual Pension Cost. For calendar year ending December 31, 2010, the Regional Office of Education
#32’s actual contributions for pension cost for the Regular plan were $61,369. Its required contribution for
calendar year 2010 was $77,199.
THREE YEAR TREND INFORMATION
Actuarial
Valuation
Date
Annual
Pension
Cost (APC)
Percentage
of APC
Contributed
Net
Pension
Obligation
12/31/10 $ 77,199 79% $ 0
12/31/09 54,258 100% 0
12/31/08 80,270 100% 0
The required contribution for 2010 was determined as part of the December 31, 2008, actuarial valuation
using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2008, included
a) 7.5% investment rate of return (net of administrative and direct investment expenses), b) projected salary
increases of 4.00% a year, attributable to inflation, c) additional projected salary increases ranging from
0.4% to 10% per year depending on age and service, attributable to seniority/merit, and d) post retirement
benefit increases of 3% annually. The actuarial value of the Regional Office of Education #32’s Regular
plan assets was determined using techniques that spread the effects of short-term volatility in the market
value of investments over a five-year period with a 20% corridor between the actuarial and market value of
assets. The Regional Office of Education #32’s Regular plan’s unfunded actuarial accrued liability at
December 31, 2008 is being amortized as a level percentage of projected payroll on an open 10 year basis.
Funded Status and Funding Progress. As of December 31, 2010, the most recent actuarial valuation date,
the Regular plan was 87.86% funded. The actuarial accrued liability for benefits was $1,763,990 and the
actuarial value of assets was $1,549,887, resulting in an unfunded actuarial accrued liability (UAAL) of
$214,103. The covered payroll for calendar year 2010 (annual payroll of active employees covered by the
plan) was $722,838 and the ratio of the UAAL to the covered payroll was 30%.
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.
43
REGIONAL OFFICE OF EDUCATION #32
IROQUOIS AND KANKAKEE COUNTIES
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended June 30, 2011
NOTE 4: TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
The Regional Office of Education #32 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% of creditable earnings. The same contribution