FY11-ROE56-Fin-Full

              State of Illinois
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
FINANCIAL AUDIT
(In Accordance with the Single Audit Act
and OMB Circular A-133)
For the Year Ended June 30, 2011
Performed as Special Assistant Auditors
For the Office of the Auditor General
WILL COUNTY
REGIONAL OFFICE OF EDUCATION#56
TABLE OF CONTENTS
JUNE 30,2011
TABLE OF CONTENTS
Officials .
Compliance Report Summary .
Financial Statement Report Summary .
FINANCIAL SECTION
Independent Auditor's Report .
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters ,Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
Independent Auditor's Report on Compliance with Requirements That Could
Have a Direct and Material Effect on Each Major Program and on Internal
Control Over Compliance in Accordance with OMB Circular A-133 .
Schedule of Findings and Questioned Costs
Section I - Summary of Auditor's Results .
Section II - Financial Statement Findings .
Section III - Findings and Questioned Costs for Federal Awards .
Corrective Action Plan for Current Year Audit Findings .
Summary Schedule of Prior Audit Findings .
Management's Discussion and Analysis .
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement ofNet Assets .
Statement of Activities .
Fund Financial Statements
Balance Sheet - Governmental Funds .
Reconciliation ofthe Governmental Funds Balance Sheet
to the Statement ofNet Assets - Governmental Funds .
PAGE
1
2-3
4
5-6
7-8
9-10
11
12a-12d
13
14a-14b
15
16a-16f
17
18
19
20
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
TABLE OF CONTENTS
JUNE 30,2011
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 ofNet Assets - Proprietary Funds...................................................... 23
Statement of Revenues, Expenses and Changes in
Fund Net Assets - Proprietary Funds............................................................... 24
Statement of Cash Flow - Proprietary Funds...................................................... 25
Statement of Fiduciary Net Assets - Fiduciary Funds 26
Notes to the Financial Statements 27-50
REQUIRED SUPPLEMENTAL INFORMATION
Illinois Municipal Retirement Fund Schedule of Funding Progress .
OTHER SUPPLEMENTAL INFORMATION
51
Combining Schedule of Accounts
General Fund 52
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - General Fund Accounts 53
Combining Schedule of Accounts
Education Fund................................................................................................ 54-55
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - Education Fund Accounts..................................................... 56-57
Budgetary Comparison Schedules
Education Fund Accounts
ARRA - McKinney Education for Homeless Children............................ 58
McKinney Education for Homeless Children 59
Regional Safe Schools........... 60
Title IV - 21st Century Community Learning Centers - 08 61
Title IV - 21 st Century Community Learning Centers - 10 .. 62
Truants Alternative/Optional Education.......... 63
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
TABLE OF CONTENTS
JUNE 30,2011
Combining Schedule of Accounts
Professional Development Alliance Fund....... 64-65
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - Professional Development Alliance Fund Accounts........... 66-67
Budgetary Comparison Schedules
Professional Development Alliance Fund Accounts
ROE/ISC Operations 68
Technology for Success............................................................................. 69
Will County Gifted Education................................................................... 70
Grundy/Kendall County Gifted Education................................................ 71
Will County Title I - Reading First Part B SEA.. 72
Grundy/Kendall County Title I - Reading First Part B SEA 73
Title I - School Improvement and Accountability
(Coordination and Services)................................................................. 74
ARRA - Title I - School Improvement and Accountability 75
Combining Balance Sheet
Nonmajor Special Revenue Funds 76
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue Funds....................................... 77
Combining Statement of Fiduciary Net Assets
Agency Funds 78
Combining Statement of Changes in Assets and Liabilities
Agency Funds............... 79
FEDERAL COMPLIANCE SECTION
Schedule of Expenditures of Federal Awards 80
Notes to the Schedule of Expenditures of Federal Awards................................ 81-82
WILL COUNTY
REGIONAL OFFICE OF EDUCATION#56
OFFICIALS
Regional Superintendent
(Current and During the Audit Period)
Assistant Regional Superintendent
(Current and During the Audit Period)
Office is located at:
702 West Maple Street
New Lenox, Illinois 60451
1
Dr. Jennifer Bertino-Tarrant
Mr. Shawn T. Walsh
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMPLIANCE REPORT SUMMARY
The compliance audit testing performed in this audit was conducted in accordance with Government
Auditing Standards and in accordance with the Illinois State Auditing Act.
AUDITOR'S REPORTS
The auditor's reports on compliance and on internal controls contain scope limitations, disclaimers, or
other significant non-standard language.
SUMMARY OF AUDIT FINDINGS
Number of
Audit findings
Repeated audit findings
Prior recommendations implemented
or not repeated
This Audit
2
2
o
Prior Audit
2
o
o
An additional matter, which is less than a significant deficiency or material weakness, but more than
inconsequential, has been reported in a Management Letter of Comments to the Regional
Superintendent. In prior years, these issues may have been included as immaterial findings in the
auditor's reports.
SUMMARY OF FINDINGS AND QUESTIONED COSTS
Item No. Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-01
11-02
12a
12c
Controls over Financial
Statement Preparation
Departure from Generally
Accepted Accounting Principle
Material Weakness
Material Weakness
None
FINDINGS AND QUESTIONED COSTS (FEDERAL COMPLIANCE)
2
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMPLIANCE REPORT SUMMARY (Concluded)
PRIOR FINDINGS NOT REPEATED (GOVERNMENT AUDITING STANDARDS)
None
PRIOR FINDINGS NOT REPEATED (FEDERAL COMPLIANCE)
None
EXIT CONFERENCE
The findings and recommendations appearing in this report were discussed with Agency personnel at an
informal exit conference on October 7, 2011. Attending were Jennifer Bertino-Tarrant, Regional
Superintendent, Donna Hettman, Bookkeeper, and Tami Knight, Partner, Kemper CPA Group LLP.
Responses to the recommendations were provided by Jennifer Bertino-Tarrant, Regional Superintendent.
3
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
FINANCIAL STATEMENT REPORT SUMMARY
The audit of the accompanying basic financial statements of the Will County Regional Office of
Education #56 was performed by Kemper CPA Group LLP.
Based on their audit, the auditors expressed a qualified opinion on the Will County Regional Office of
Education #56's basic financial statements.
4
LLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable William G. Holland
State of Illinois
for the year ended June 30, 2011, which collectively comprise the County Regional of
Education #56's basic financial statements as listed in the table of contents. These financial statements
are the responsibility of the Will County Regional Office of Education #56's management. Our
responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
The Will County Regional Office of Education #56 did not recognize and disclose postemployment
benefits other than pensions (OPEB) as required by Governmental Accounting Standards Board (GASB)
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits
Other Than Pensions in their financial statements. In our opinion, disclosure of that information is
required to conform with accounting principles generally accepted in the United States of America. The
effect of this departure from United States generally accepted accounting principles on the financial
statements of the Will County Regional Office of Education #56 is not reasonably determinable.
In our opinion, except for the effects of not recognizing a liability for postemployment benefits other
than pensions in the Statement of Assets and the Statement of Activities as described in the
preceding paragraph, financial referred to above present respects, the
respective financial position of the governmental activities, the business-type activities, fund,
and the aggregate remaining fund information of the Will County Regional Office of Education #56, as
of June 30, 2011, and the respective changes in financial position and flows,
thereof for
of
5
1413 Wabash
234-8801
Mattoon, 61938
234-8803
The Will County Regional Office of Education #56 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 Will County Regional Office
of Education #56's governmental funds' assets or liabilities nor was there any effect to the total amount
of any of Will County Regional Office of Education #56's governmental fund balances as of and for the
year ended June 30, 2011.
In accordance with Government Auditing Standards, we have also issued a report dated March 19, 2012,
on our consideration of the Will County Regional Office of Education #56'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-16f and 51 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 Will County Regional Office of Education #56's basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparison schedules
are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes
of additional analysis as required by the US. Office ofManagement and Budget Circular A-133, Audits
ofStates, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic
financial statements. The combining and individual nonmajor fund financial statements, budgetary
comparison schedules, and the Schedule of Expenditures of Federal Awards have been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly
stated, in all material respects, in relation to the basic financial statements taken as a whole.
Certified Public Accountants
and Consultants
Mattoon, Illinois
March 19, 2012
6
LLP
Certified Public Accountants and Consultants
STATE11ENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
Auditor General
As Special Assistant Auditors for the Auditor General, we have "W"..a..l"'''''''~
............. JUI. ......,""...... "'q""'... activities, business-type activities, each major fund,
information of the Will County Regional Office of Education #56, as of and for the year ended June 30,
2011, which collectively comprise the Will County Regional Office of Education #56's basic financial
statements and have issued our report thereon dated March 19, 2012. The report on governmental and
business-type activities was qualified because the Will County Regional Office of Education #56 did not
recognize and disclose postemployment benefits other than pensions (OPEB) in their financial
statements as required by Governmental Accounting Standards Board (GASB) Statement No. 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions.
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 Will County Regional Office of Education #56 is responsible for establishing and
maintaining effective internal control over financial reporting. planning and performing our audit, we
considered the Will County Regional Office of Education #56'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 Will County
Regional Office of Education #56's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the Will County Regional Office of Education #56'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 over we to
7
3 Wabash Avenue Mattoon, 61938
234-8801 234-8803
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 and 11-02 in the accompanying Schedule of Findings and
Questioned Costs to be a material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Will County Regional Office of Education
#56's financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. However, providing
an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do
not express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
We also noted a certain matter which we have reported to management of the Will County Regional Office
of Education #56 in a separate letter dated March 19, 2012.
Will County Regional Office of Education #56's response to the finding identified in our audit is described
in the accompanying Schedule of Findings and Questioned Costs. We did not audit the Will County
Regional Office of Education #56's response and, accordingly, express no opinion on it.
This report is intended solely for the information and use of the Auditor General, the General Assembly, the
Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois State
Board of Education, federal awarding agencies and pass-through entities and is not intended to be and should
not be used by anyone other than these specified parties.
Certified Public Accountants
and Consultants
Mattoon, Illinois
March 19, 2012
8
d LLP
Certified Public Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT ON CONIPLIANCE WITH REQUIREMENTS THAT COULD
HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL
CONTROL OVER CONIPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Honorable William G. Holland
Auditor General
Compliance
We have audited the Will County Regional Office of Education #56's compliance with the types of
compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a
direct and material effect on each of the Will County Regional Office of Education #56's major federal
programs for the year ended June 30, 2011. The Will County Regional Office of Education #56' 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 Will County Regional
Office of Education #56's management. Our responsibility is to express an opinion on the Will County
Regional Office of Education #56's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and material effect on a
major federal program occurred. An audit includes examining, on a test basis, evidence about the Will
County Regional Office of Education #56'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 Will County
Regional Office of Education #56's compliance with those requirements.
In our opinion, the Will County Regional Office of Education #56 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.
9
1413 Wabash Avenue Mattoon, IL 61938
234-8801 234-8803
Internal Control over Compliance
Management of the Will County Regional Office of Education #56 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 Will
County Regional Office of Education #56's internal control over compliance with requirements that could
have a direct and material effect on a major federal program in order to determine our 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-I33, 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 Will County Regional Office of Education #56's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above.
This report is intended solely for the information and use of the Auditor General, the General Assembly,
the Legislative Audit Commission, the Governor, agency management, others within the entity, Illinois
State Board of Education, federal awarding agencies and pass-through entities and is not intended to be
and should not be used by anyone other than these specified parties.
Certified Public Accountants
and Consultants
Mattoon, Illinois
March 19,2012
10
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued:
Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deficiency(ies) identified that are not considered to
be material weakness(es)?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major programs:
Qualified
Yes
No
No
• Material weakness(es) identified? No
• Significant deficiency(ies) identified that are not considered to No
be material weakness(es)?
Type of auditor's report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in accordance with
OMB Circular A-133, Section 510(a)? No
Identification of major programs:
CFDA Number(s)
84.010A
84.389A
84.410A
Name of Federal Program or Cluster
Title I - Grants to Local Educational Agencies
Title I - Grants to Local Educational Agencies,
Recovery Act
Education Jobs Fund
Dollar threshold used to distinguish between Type A and Type B programs: $300,000
Auditee qualified as a low-risk auditee?
11
No
WILL COUNTY
OFFICE OF EDUCATION #56
OF FINDINGS AND QUESTIONED COSTS
YEAR JUNE 30, 2011
over
The Regional Office of Education #56 is required to maintain a system of controls
over preparation of financial statements in accordance with generally accepted
...... rrll~_,n. Office's over
financial reporting should include adequately trained personnel with the knowledge
O"'lT'1"O'1""T-lIClO to 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 #56 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:
• The Regional Office's financial information required numerous adjusting
entries to present the financial statements in accordance with generally
accepted accounting principles.
• The Regional Office did not have adequate controls over the maintenance of
complete records of accounts receivable, accounts payable, or deferred
revenue. While the Regional Office did maintain records to indicate the
balances of accounts payable, accounts receivable, and deferred revenue, no
entries were provided to reconcile the Regional Office of Education #56's
grant activity, such as posting grant receivables and deferred revenue.
Management or employees in the normal course of performing their assigned
functions may not prevent or detect financial statement misstatements and
disclosure omissions in a timely manner.
......... _.L..............,........ funding levels are not adequate to hire and/or train accounting personnel in
order to comply these requirements.
12a
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2011
As part of its internal control over the preparation of its financial statements,
including disclosures, the Regional of Education #56 should implement a
_tJ"'~..L_"'..&.'-'..L.A. and/or procedure to ensure that the financial
statements, including disclosures, are complete and accurate. Such procedures
IIJ-......... "V' ....................-- by a properly trained individual(s) possessing a thorough
understanding of applicable generally accepted accounting principles, GASB
pronouncements, and knowledge of the Regional Office of Education's activities
and operations.
Management's Response:
The Regional Office of Education #56 accepts the degree of risk associated with
this condition because the additional expense to seek outside accounting expertise
to prepare and/or review financial statements would take away from the funds
available to provide educational services for the schools in the region. The Regional
Office of Education #56 will review, approve, and accept responsibility for the
audit adjustments, financial statements and related notes provided by the auditors.
The Regional Office of Education #56 will continue to work with the other
Regional Offices of Education to determine the most effective method of ensuring
that our employees possess the knowledge required to compile the necessary
GAAP-based financial statements.
12b
COUNTY
REGIONAL OF EDUCATION #56
OF FINDINGS AND QUESTIONED COSTS
FOR ENDED JUNE 30, 2011
The Illinois Administrative Code (74 Ill. Adm. 420.320 (c) (1) and (2)) requires that
each Regional of Education maintain accounting records necessary to
statements
principles (GAAP).
Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting
and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions (OPEB), requires that employers recognize and disclose OPEB expense.
Net OPEB obligations, if any, should be reported as liabilities (or assets if
overfunded) in the financial statements. For financial reporting purposes, an actuarial
valuation is required to measure and disclose the annual OPEB cost. In certain
circumstances, an alternative measurement method can be applied instead of
obtaining an actuarial valuation.
Condition:
The Regional Office of Education #56 participates in a defined benefit OPEB plan
that provides postemployment benefits other than pensions to its employees in
exchange for employee services rendered. Under accrual accounting, the cost of
OPEB, and any related OPEB liability, should generally be recorded in the period
when the exchange for the employees' services occurs, rather than when the benefits
are paid. Currently, the Regional Office of Education #56's OPEB plan is financed
on a pay-as-you-go basis, and as such, the financial statements do not report the
financial effects of OPEB until the promised benefits are paid. During fiscal year
2011, the Regional Office of Education #56 had an average of 13 active employees
and contributions to the OPEB plan totaled $168,799. The Regional Office of
Education #56 did not obtain an actuarial valuation of its postemployment benefits
other than pension liability, or apply the alternative measurement method in order to
be in compliance with GASB Statement No. 45.
the absence of the actuarial valuation, or the application of the alternative
measurement method, the auditors could not reasonably determine the amount by
which this departure would affect the liabilities, fund balances, and expenditures of
the Regional Office of Education #56 as of June 30, 2011.
12c
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2011
Failure to apply the accounting and reporting requirements of GASB Statement No.
45 could result in misstatements of the Regional Office of Education #56's financial
statements. also incomplete disclosure of
OPEB plan description, the funding policy, and the annual OPEB and net OPEB
Cause:
According to Regional Office management, noncompliance with GASB Statement
No. 45 was due to budget constraints and the overall complexity of the
pronouncement.
Auditors' Recommendation:
We recommend the Regional Office of Education #56 obtain or perform an actuarial
valuation of its other postemployment benefit liability to be in compliance with
GASB Statement No. 45 and include all disclosures required by the Statement in its
financial statements.
Management's Response:
Due to the complexity of the pronouncement, the Regional Office of Education #56
received an actuarial valuation which was based on "like" entities, not an actuarial
valuation for the Regional Office of Education #56. The Regional Office of
Education #56 will obtain an actuarial valuation of its other postemployment benefit
liability to be in compliance with GASB Statement No. 45, and will include the
disclosures required by the Statement where applicable in our financial statements.
12d
WILL COUNTY
REGIONAL OF EDUCATION #56
OF FINDINGS AND QUESTIONED COSTS
FOR ENDED JUNE 30, 2011
NONE
13
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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 #56 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:
• The Regional Office's financial information required numerous adjusting
entries to present the financial statements in accordance with generally
accepted accounting principles.
• The Regional Office did not have adequate controls over the maintenance of
complete records of accounts receivable, accounts payable, or deferred
revenue. While the Regional Office did maintain records to indicate the
balances of accounts payable, accounts receivable, and deferred revenue, no
entries were provided to reconcile the Regional Office of Education #56's
grant activity, such as posting grant receivables and deferred revenue.
Plan:
The Regional Office of Education #56 accepts the degree of risk associated with this
condition because the added expense of seeking additional accounting expertise to
prepare and/or review financial statements would take away from the funds available
to provide educational services for the schools in the region.
The Regional Office will continue to send personnel to various trainings to assist
them in gaining a better understanding of accrual accounting and reporting under
generally accepted accounting principles (GAAP).
Anticipated Date of Completion:
Not Applicable
Contact Person Responsible for Corrective Action:
Ms. Jennifer Bertino-Tarrant, Regional Superintendent
14a
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
CORRECTIVE ACTION PLAN FOR CURRENT-YEAR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Finding No. 11-02 - Departure from Generally Accepted Accounting Principle
Condition:
The Regional Office of Education #56 participates in a defined benefit OPEB plan
that provides postemployment benefits other than pensions to its employees in
exchange for employee services rendered. Under accrual accounting, the cost of
OPEB, and any related OPEB liability, should generally be recorded in the period
when the exchange for the employees' services occurs, rather than when the benefits
are paid. Currently, the Regional Office of Education #56's OPEB plan is financed
on a pay-as-you-go basis, and as such, the financial statements do not report the
financial effects of OPEB until the promised benefits are paid. During fiscal year
2011, the Regional Office of Education #56 had an average of 13 active employees
and contributions to the OPEB plan totaled $168,799. The Regional Office of
Education #56 did not obtain an actuarial valuation of its postemployment benefits
other than pension liability, or apply the alternative measurement method in order to
be in compliance with GASB Statement No. 45.
In the absence of the actuarial valuation, or the application of the alternative
measurement method, the auditors could not reasonably determine the amount by
which this departure would affect the liabilities, fund balances, and expenditures of
the Regional Office of Education #56 as of June 30, 2011.
Plan:
The Regional Office of Education #56 will obtain an actuarial valuation of its other
postemployment benefit liability to be in compliance with GASB Statement No. 45,
and will include the disclosures required by the Statement where applicable in our
financial statements.
Anticipated Date of Completion:
June 30, 2012
Contact Person Responsible for Corrective Action:
Ms. Jennifer Bertino-Tarrant, Regional Superintendent
14b
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2011
Finding
No.
10-01
10-02
Condition
Controls over Financial Statement Preparation
Departure from Generally Accepted Accounting
Principle
15
Current Status
Repeated as Finding 11-01
Repeated as Finding 11-02
MANAGEMENT DISCUSSION AND ANALYSIS
COUNTY REGIONAL OFFICE OF EDUCATION #56
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Will County Regional Office Education #56 (ROE #56) 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 #56's financial statements that follow.
II During fiscal year 2011 the Regional Office of Education #56 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 14 to the financial statements. Because of these reclassifications the governmental
fund analysis is not comparable between fiscal year 2010 and fiscal year 2011.
II The Enterprise Fund revenues increased by $31,718 (2%) from $1,272,694 in FY 2010 to
$1,304,412 in FY 2011. The Enterprise Fund expenditures increased by $74,353 (6%)
from $1,305,625 in FY 2010 to $1,379,978 in FY 2011.
Using This Report
This report consists of a series of financial statements and other information, as follows:
II Management's Discussion and Analysis introduces financial statements and provides an
analytical overview ofthe ROE #56's financial activities.
II 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 #56
as a whole and present an overall view of the Office's finances.
II Fund financial statements report the ROE #56's operations in more detail than the
government-wide statements by providing information about the most significant funds.
II Notes to the financial statements provide additional information that is needed for a full
understanding of the data provided in the basic financial statements.
II Required supplementary information further explains and supports the financial
statements and supplementary information provides detailed information about the non­major
funds.
16a
COUNTY REGIONAL OFFICE OF EDUCATION #56
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
as a
It is important to note that many grants are a cooperative effort of the ROE #56 and the
Grundy/Kendall Regional Office of Education #24. Therefore, these figures may reflect grants
that are intended to serve Will County only and grants that serve Will, Grundy, and Kendall
Counties.
The Statement of Net Assets and the Statement of Activities
Government-wide Financial Statements
The Government-wide financial statements report information about the ROE #56 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 health or position.
II Over time, increases or decreases in the net assets can be an indicator of whether financial
position is improving or deteriorating, respectively.
II To assess the Regional Office's overall health, additional non-financial factors, such as new
laws, rules, regulations, and actions by officials at the State level need to be considered.
Fund Financial Statements
The fund financial statements provide detailed information about the ROE #56'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 #56 established other
funds to control and manage money for particular purposes.
The Office has three kinds of funds:
(1) Governmental funds account for those funds through which most governmental functions of
the Office are financed. 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 required governmental funds
financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and
Changes in Fund Balances.
16b
WILL COUNTY REGIONAL OFFICE OF EDUCATION #56
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
(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. required proprietary funds 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.
(3) Fiduciary funds are used to account for assets held by the ROE #56 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
required fiduciary funds financial statements include a Statement of Fiduciary Net Assets.
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 #56. The net assets at the end of FY 2011 and FY 2010 totaled $5,230,772
and $3,861,938, respectively. The analysis that follows provides a summary of the ROE #56's
net assets as of June 30, 2011 and 2010.
CONDENSED STATEMENT OF NET ASSETS
CONDENSED STATEMENT OF NET ASSETS
Governmental Activities Business-Type Activities Total
2011 2010 2011 2010 2011 2010
Current assets $ 5,691,057 $ 3,981,408 $ 1,276,972 $ 1,312,927 $ 6,968,029 $ 5,294,335
Capital assets, net
Total assets
1,800
5,692,857
3,240
3,984,648
1,216
1,278,188
4,864
1,317,791
3,016
6,971,045
8,104
5,302,439
Current liabilities
Total liabilities
1,649,136
1,649,136
1,385,327
1,385,327
91,137
91,137
55,174
55,174
1,740,273
1,740,273
1,440,501
1,440,501
Net assets:
8,104
589,116
3,264,718
3,861,938
3,016
776,871
4,450,885
5,230,772 $ ==============
4,864
1,257,753
1,262,617 $
1,216
1,187,051 $
1,185,835
3,240
2,599,321 $
589,116
2,006,965
1,800
4,043,721 $
776,871
3,265,050
$
Invested in capital assets
Restricted for educational
purposes
Unrestricted, restated
Total net assets
The ROE #56's net assets increased by $1,368,834 (35%) from FY 2010.
16c
WILL COUNTY REGIONAL OFFICE OF EDUCATION #56
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
CHANGES IN NET ASSETS
The following analysis shows the changes in net assets for the years ended June 30, 2011 and
2010.
CHANGES IN NET ASSETS
212,401
2,770,231
934,805
7,725,022
230,642
2,331,891
$ 7,969,379 $
2010
$
Business-Type Activities
313,068
212,401
2,770,231
934,805
7,725,022 $
738,722
304,546
230,642
2,331,891
Governmental Activities
738,722
304,546 313,068
1,303,173 1,272,164 1,303,173 1,272,164
1,198 15,819 1,239 530 2,437 16,349
11,576,378 __1_1--.,9_71..;.,.,3_4_6 __....;.1,3_0_4..;....,4_12 --.;;.1,2_7_2,,;...,6_94_ ___12....;.,_88_0..;....,7_90 1_3--.,2_44..;.,.,0_4_0
$ 7,969,379 $
Revenues:
Program revenues:
Operating grants
and contributions
General revenues:
Local sources
State sources
Federal sources
On-behalfpayments - local
On-behalfpayments - state
Charges for services
Interest
Total revenues
Expenses:
Programs expenses:
Salaries and benefits
Purchased services
Supplies and materials
Other objects
Payments to other
governments
Capital outlay
Depreciation
Administrative expenses:
On-behalfpayments - local
On-behalfpayments - state
Total expenses
1,510,635
1,637,140
146,281
25,532
5,767,682
1,440
738,722
304,546
10,131,978
1,377,237
1,975,954
171,978
17,294
6,594,759
1,869
313,068
10,452,159
541,035
692,517
124,096
18,682
3,648
1,379,978
570,183
611,279
107,514
11,111
5,538
1,305,625
2,051,670
2,329,657
270,377
44,214
5,767,682
5,088
738,722
304,546
11,511,956
1,947,420
2,587,233
279,492
28,405
6,594,759
7,407
313,068
11,757,784
Changes in net assets 1,444,400 1,519,187 (75,566) (32,931) 1,368,834 1,486,256
Net assets, beginning ofyear 2,599,321 1,080,134 1,262,617 1,295,548 3,861,938 2,375,682
2,599,321 $ 1,187,051 $ 1,262,617 $ 5,230,772 $ 3,861,938
========== Net assets, end of year $ 4,043,721 $
Governmental Activities
Revenues for governmental activities were $11,576,378 and expenses were $10,131,978.
The decrease in program revenues was due to the reduction in State-funded programs.
16d
WILL COUNTY REGIONAL OFFICE OF EDUCATION #56
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Business-Type Activities
Revenues for business-type activities were $1,304,412 and expenditures were $1,379,978.
The increase in revenues is attributed to the increase in workshop attendance for the Master's
and Doctoral programs conducted in FY 2011. The increase in expenditures is attributed to
paying expenses in the current year that were paid out of the ROE/ISC in prior years due to
decrease State-funded program.
Financial Analysis of the ROE #56 Funds
As previously noted, the ROE #56 uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. The Agency's Governmental Funds
reported combined fund balances amounting to $3,974,123.
Governmental Fund Highlights
II State funding of Regional Offices of Education has continued to decrease compared to
the previous year.
II The dollar return on investments (certificate of deposit, short-term investments and
interest earned on float) did not increase due to low interest rates.
II County support for the ROE #56 decreased from the previous year's funding level.
Proprietary Fund Highlights
Total proprietary fund net assets decreased by $75,566. The decrease in the proprietary fund net
assets is due mainly to the decrease in workshop participation by the school districts from FY
2010, and the reduction of State funding sources noted above.
Budgetary Highlights
The ROE #56 annually adopts budgets for several funds. The Professional Development
Alliance (PDA) Budget is prepared by the Executive Director of the PDA and approved by a
joint Governing Board representing Will, Grundy, & Kendall Counties. The Regional Safe
Schools Budget is approved by a similar board. The Education-To-Careers Executive Board
approves the budgets for the ETC Partnership and the 21 st Century Grant. The Regional
Superintendent annually prepares an Office Operations Budget and submits it to the County
Board for their approval. The Office Operations Budget covers a fiscal year which runs from
December 1 to November 30. All grant budgets are prepared by the Regional Office of
Education #56 and submitted to the granting agency for approval. Amendments must be
submitted under guidelines established by the granting agency.
16e
COUNTY REGIONAL OFFICE OF EDUCATION #56
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
'-"-IV... .,I1....... Assets
ROE #56's capital assets include office equipment, computers, audio-visual equipment, and
building improvements. ROE #56 maintains an inventory of capital assets which have been
accumulated over time. For FY 2011, there were no additions of capital assets. Fully
depreciated equipment with an original cost of $6,210 was disposed of. Depreciation expense for
2011 0 was $5,088 $7,407, respectively.
EC~On()m]IC Factors Year's Budget
At the time these financial statements were prepared and audited, the Will County Regional
Office of Education #56 was aware of several existing circumstances that could affect its
financial condition in the future:
II County board support for ROE #56 is expected to continue to decrease from the FY 2011
funding level.
II Several federal grants are expected to be received in FY 2012 in the form of general State aid
and competitive grants in an effort to reduce the impact of the State's current fiscal deficit on
the school district operations.
II The growth in the region is stable. Student population for 2012 remains steady, with a slight
decrease of 464 students, based on fall housing reports.
Contacting the Regional Office's Financial Management
This financial report is designed to provide the ROE #56's citizens, taxpayers, clients, and
other constituents with a general overview of its finances and to demonstrate the
accountability for the money it receives. If the reader has questions concerning this report or
needs additional financial information, please contact the Regional Superintendent of
Schools, Will County Regional Office of Education #56, 702 West Maple Street, New
Lenox, Illinois 60451.
16f
BASIC FINANCIAL STATEMENTS
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF NET ASSETS
JUNE 30, 2011
Primary Government
Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets:
Cash and cash equivalents $ 4,909,852 $ 889,835 $ 5,799,687
Accounts receivable 4,994 79,453 84,447
Due (to) from other funds (306,228) 306,228
Due from other governments:
Local 1,456 1,456
State 841,579 841,579
Federal 240,860 240,860
Total Current Assets 5,691,057 1,276,972 6,968,029
Noncurrent Assets:
Capital assets, being depreciated, net 1,800 1,216 3,016
Total Noncurrent Assets 1,800 1,216 3,016
TOTAL ASSETS 5,692,857 1,278,188 6,971,045
LIABILITIES
Current Liabilities:
Accounts payable 1,503,136 86,547 1,589,683
Due to other governments:
Local 126,492 126,492
Unearned revenue 19,508 4,590 24,098
Total Current Liabilities 1,649,136 91,137 1,740,273
NET ASSETS
Invested in capital assets 1,800 1,216 3,016
Restricted for educational purposes 776,871 776,871
Unrestricted 3,265,050 1,185,835 4,450,885
TOTAL NET ASSETS $ 4,043,721 $ 1,187,051 $ 5,230,772
The notes to the financial statements are an integral part of this statement.
17
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Program Revenues
Net (Expense) Revenue and
Changes in Net Assets
$ 1,510,635 $ - $ 1,510,635 $ - $ - $
1,637,140 - 1,551,839 (85,301) - (85,301)
146,281 - 130,570 (15,711) - (15,711)
25,532 - - (25,532) - (25,532)
1,440 - - (1,440) - (1,440)
5,767,682 - 4,776,335 (991,347) - (991,347)
738,722 - - (738,722) - (738,722)
304,546 - - (304,546) - (304,546)
10,131,978 -- 7,969,379 (2,162,599) - (2,162,599)
1,379,978 1,303,173 - - (76,805) (76,805)
1,379,978 1,303,173 - - (76,805) (76,805)
$ 11,511,956 $ 1,303,173 $ 7,969,379 (2,162,599) (76,805) (2,239,404)
GENERAL REVENUES:
Local sources 230,642 - 230,642
State sources 2,331,891 - 2,331,891
On-behalf payments - Local 738,722 - 738,722
On-behalf payments - State 304,546 - 304,546
Interest 1,198 1,239 2,437
Total General Revenues 3,606,999 1,239 3,608,238
CHANGE IN NET ASSETS 1,444,400 (75,566) 1,368,834
NET ASSETS - BEGINNING 2,599,321 1,262,617 3,861,938
NET ASSETS - ENDING $ 4,043,721 $ 1,187,051 $ 5,230,772
The notes to the fmancial statements are an integral part of this statement.
18
FUNCTIONSIPROGRAMS
Primary Government:
Governmental Activities:
Instructional Services
Salaries and benefits
Purchased services
Supplies and materials
Other objects
Depreciation expense
Payments to other governments
Administrative:
On-behalf payments - Local
On-behalf payments - State
Total Governmental Activities
Business-Type Activities:
Fees for services
Total Business-Type Activities
TOTAL PRIMARY GOVERNMENT
Expenses
Charges for
Services
Operating
Grants and
Contributions
Primary Government
Governmental Business-Type
Activities Activities Total
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2011
Professional Total
General Institute Education Development Non-Major Governmental
Fund Fund Fund Alliance Funds Eliminations Funds
ASSETS
Cash and cash equivalents $ 2,821,539 $ 663,670 $ 185,467 $ 1,127,845 $ 111,331 $ - $ 4,909,852
Due from other funds 570,003 - - - - (570,003)
Due from other governments:
State - - 627,730 213,849 - - 841,579
Federal - - 50,864 189,996 - - 240,860
Accounts receivable - - - - 4,994 - 4,994
TOTAL ASSETS $ 3,391,542 $ 663,670 $ 864,061 $ 1,531,690 $ 116,325 $ (570,003) $ 5,997,285
LIABILITIES
Accounts payable $ - $ 1,433 $ 274,550 $ 1,225,462 $ 1,691 $ - $ 1,503,136
Due to other funds - - 570,003 306,228 - (570,003) 306,228
Due to other governments:
Local 126,492 - - - - - 126,492
Unearned revenue - - 62,092 25,214 - - 87,306
Total Liabilities 126,492 1,433 906,645 1,556,904 1,691 (570,003) 2,023,162
FUND BALANCE (DEFICIT)
Restricted - 662,237 - - 114,634 - 776,871
Unassigned 3,265,050 - (42,584) (25,214) - - 3,197,252
Total Fund Balance (Deficit) 3,265,050 662,237 (42,584) (25,214) 114,634 - 3,974,123
TOTAL LIABILITIES AND
FUND BALANCE (DEFICIT) $ 3,391,542 $ 663,670 $ 864,061 $ 1,531,690 $ 116,325 $ (570,003) $ 5,997,285
The notes to the fmancial statements are an integral part of this statement.
19
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
JUNE 30, 2011
TOTAL FUND BALANCE - GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement ofNet Assets are
different because:
Capital assets used in governmental activities are not
fmancial resources and, therefore, are not reported in the funds.
Some revenues will not be collected for several months after the Regional Office
fiscal year ends; they are therefore not considered "available" revenues and are
deferred in the governmental funds.
FY11 revenue deferred
NET ASSETS OF GOVERNMENTAL ACTIVITIES
The notes to the fmancial statements are an integral part of this statement.
20
$ 3,974,123
1,800
67,798
$ 4,043,721
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Professional Total
General Institute Education Development Non-Major Governmental
Fund Fund Fund Alliance Funds Eliminations Funds
REVENUES
Local sources $ 28,067 $ 114,052 $ - $ - $ 88,523 $ - $ 230,642
On-behalf payments - Local 738,722 - - - - - 738,722
State sources 2,329,922 - 992,902 650,144 3,246 - 3,976,214
On-behalfpayments - State 304,546 - - - - - 304,546
Federal sources - - 2,078,362 4,749,738 - - 6,828,100
Total Revenues 3,401,257 114,052 3,071,264 5,399,882 91,769 - 12,078,224
EXPENDITURES
Instructional Services:
Salaries and benefits - - 801,747 708,888 - 1,510,635
Purchased services 14,813 21,223 743,727 808,112 49,265 - 1,637,140
Supplies and materials 3,594 3,737 27,862 102,708 8,380 - 146,281
Other objects 8,397 16,375 - - 760 - 25,532
Payments to other governments 991,347 - 1,134,033 3,642,302 - - 5,767,682
On-behalf payments 1,043,268 - - - - - 1,043,268
Total Expenditures 2,061,419 41,335 2,707,369 5,262,010 58,405 - 10,130,538
EXCESS OF REVENUES
OVER EXPENDITURES 1,339,838 72,717 363,895 137,872 33,364 - 1,947,686
OTHER FINANCING SOURCES:
Interest 791 404 - - 3 - 1,198
Total Other Financing Sources 791 404 - - 3 - 1,198
NET CHANGE IN FUND BALANCE 1,340,629 73,121 363,895 137,872 33,367 - 1,948,884
FUND BALANCE (DEFICIT), RESTATED
-BEGINNING 1,924,421 589,116 (406,479) (163,086) 81,267 - - 2,025,239
FUND BALANCE (DEFICIT) - ENDING $ 3,265,050 $ 662,237 $ (42,584) $ (25,214) $ 114,634 $ - $ 3,974,123
The notes to the fmancial statements are an integral part of this statement.
21
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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 BALANCE - GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement ofActivities are
different because:
Governmental funds report capital outlays as expenditures. However, in the
Statement ofActivities, the cost ofthose assets is allocated over their estimated
useful lives and reported as depreciation expense.
Depreciation expense
$ 1,948,884
(1,440)
Some revenues will not be collected for several months after the Regional Office
fiscal year ends; they are therefore not considered "available" revenues and are
deferred in the governmental funds.
FY10 deferred revenue recognized in FY11
FY11 revenue deferred
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
The notes to the financial statements are an integral part ofthis statement.
22
(570,842)
67,798
(503,044)
$ 1,444,400
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2011
Business Type Activities -
Enterprise Fund
Criminal
Local Background
PDAFunds Investigation Total
ASSETS
Cash and cash equivalents $ 869,055 $ 20,780 $ 889,835
Accounts receivable 79,453 79,453
Due from other funds 306,228 306,228
Due from other governments:
Local 1,456 1,456
Total current assets 1,254,736 22,236 1,276,972
Noncurrent assets:
Capital assets, being depreciated, net 1,216 1,216
Total noncurrent assets 1,216 1,216
TOTAL ASSETS 1,255,952 22,236 1,278,188
LIABILITIES
Accounts payable 80,343 6,204 86,547
Unearned revenue 4,590 4,590
Total current liabilities 84,933 6,204 91,137
TOTAL LIABILITIES 84,933 6,204 91,137
NET ASSETS
Invested in capital assets 1,216 1,216
Unrestricted 1,169,803 16,032 1,185,835
TOTAL NET ASSETS $ 1,171,019 $ 16,032 $ 1,187,051
The notes to the financial statements are an integral part ofthis statement.
23
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Business Type Activities -
Enterprise Fund
Criminal
Local Background
PDAFunds Investigation Total
OPERATING REVENUES
Fees for services $ 1,232,087 $ 71,086 $ 1,303,173
Total Operating Revenues 1,232,087 71,086 1,303,173
OPERATING EXPENSES
Salaries and benefits 541,035 541,035
Purchased services 621,445 71,072 692,517
Supplies and materials 124,096 124,096
Other objects 18,633 49 18,682
Depreciation 3,648 3,648
Total Operating Expenses 1,308,857 71,121 1,379,978
OPERATING LOSS (76,770) (35) (76,805)
NONOPERATING REVENUE
Interest 1,238 1 1,239
Total Nonoperating Revenue 1,238 1 1,239
CHANGE IN NET ASSETS (75,532) (34) (75,566)
TOTAL NET ASSETS - BEGINNING 1,246,551 16,066 1,262,617
TOTAL NET ASSETS - ENDING $ 1,171,019 $ 16,032 $ 1,187,051
The notes to the financial statememts are an integral part ofthis statement.
24
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2011
Business Type Activities -
Enterprise Funds
Criminal
Local Background
PDAFunds Investigation Totals
Cash Flows from Operating Activities:
Receipts from customers $ 1,193,204 $ 75,430 $ 1,268,634
Payments to suppliers and providers of goods
and services (723,098) (69,579) (792,677)
Payments to employees (541,035) (541,035)
Net Cash Provided by (Used for) Operating Activities (70,929) 5,851 (65,078)
Cash Flows from Noncapital Financing Activities:
Payments for interfund borrowing, net (66,708) (66,708)
Net Cash Used for Noncapital Financing Activities (66,708) (66,708)
Cash Flows from Investing Activities:
Interest earned 1,238 1,239
Net Cash Provided by Investing Activities 1,238 1,239
Net Increase (Decrease) in Cash (136,399) 5,852 (130,547)
Cash and cash equivalents - Beginning 1,005,454 14,928 1,020,382
Cash and cash equivalents - Ending $ 869,055 $ 20,780 $ 889,835
Reconciliation of Operating Loss to Net Cash
Provided by (Used for) Operating Activities:
Operating Loss $ (76,770) $ (35) $ (76,805)
Adjustments to Reconcile Operating Loss to Net Cash
Provided by (Used for) Operating Activities:
Depreciation 3,648 3,648
Increase in accounts receivable (32,228) (32,228)
Decrease in due from other governments 4,344 4,344
Decrease in deferred revenue (6,655) (6,655)
Increase in accounts payable 41,076 1,542 42,618
Net Cash Provided by (Used for) Operating Activities $ (70,929) $ 5,851 $ (65,078)
The notes to the financial statements are an integral part ofthis statement.
25
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUND
JUNE 30,2011
ASSETS
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
Due to other governments
TOTAL LIABILITIES
$
$
$
$
Agency
Funds
32,595
32,595
32,595
32,595
The notes to the financial statements are an integral part of this statement.
26
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Will County Regional Office of Education #56 was created by Illinois Public Act 76-735, as
amended effective August 8, 1995, to develop and maintain education service for the school districts
in Will County. The Will County Regional Office of Education #56 services 176 public schools and
46 private schools in the 30 districts within the county.
In 2011, the Regional Office of Education #56 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 ofAccounting and Financial Reporting Guidance Contained in Pre-November 30, 1989
FASB and AICPA Pronouncements. The Regional Office of Education #56 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
Regional Office of Education #56 has evaluated subsequent events through March 19, 2012, the date
when the financial statements were available to be issued.
B. FINANCIAL REPORTING ENTITY
The Regional Superintendent is charged with responsibility for township fund lands; registration of
the names of applicants for scholarships to State controlled universities; examinations and related
duties; visitation of public schools; direction of teachers and school officers; to serve as the official
advisor and assistant of school officers and teachers; to conduct teacher institutes as well as to aid
and encourage the formation of other teacher 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 Will County Regional Office of Education #56'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
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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
treasurers' bonds. The Regional Superintendent is also required to provide the State Board of
Education with an affidavit showing that the treasurers of school districts 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 Will County Regional Office of Education #56, or see that no
payments are made unless the treasurer has filed or renewed appropriate bond and that the district
has certified publication of the annual financial report. The Regional Superintendent is required to
provide opinions and advice related to controversies under school law.
For the period ended June 30,2011, the Will County Regional Office of Education #56 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 Will County Regional Office of Education #56.
Such activities are reported as a single special revenue fund (Education Fund).
C. SCOPE OF THE REPORTING ENTITY
The Will County Regional Office of Education #56 reporting entity includes all related organizations
for which they exercise oversight responsibility.
The Will County Regional Office of Education #56 has developed criteria to determine whether
outside agencies with activities which benefit the citizens of the Will County Regional Office of
Education #56, 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 Will County Regional Office of Education #56 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.
Effective August 7, 1995, the Regional Office of Education #56 entered into an intergovernmental
agreement with Grundy/Kendall Regional Office of Education #24 to establish the ROE Professional
Development Alliance (PDA), the purpose of which is to provide professional development services
to the local school districts of Will, Grundy, and Kendall Counties. The governing board consists of
the Regional Superintendents of the Regional Offices of Education #s 56 and 24. The Regional
Office of Education #56 was designated as the administrative agent and has reported the activity of
this agreement in their financial statements.
28
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. SCOPE OF THE REPORTING ENTITY (Concluded)
Other 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 Will County Regional Office of Education #56 does not control their assets, operations, or
management. In addition, the Regional Office of Education #56 is not aware of any entity which
would exercise such oversight as to result in the Regional Office of Education #56 being considered
a component unit ofthe entity.
D. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Statement of Net Assets and the Statement of Activities are government-wide financial
statements. They report information on all of the Will County Regional Office of Education #56'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 Will
County Regional Office of Education #56 has two business-type activities; Local Professional
Development Alliance (PDA) Funds and the Criminal Background Investigation. The Local PDA
Fund accounts for the revenues and expenditures associated with workshops put on by the Regional
Office. The Criminal Background Investigation 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.
The Will County Regional Office of Education #56'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 Will County Regional Office of Education #56
accompanied by a total column. These statements are presented on an "economic resources"
measurement as prescribed by GASB Statement No. 34. All of the Will County Regional Office of
Education #56's assets and liabilities, including capital assets, are included in the accompanying
Statement of Net Assets. The Statement of Activities demonstrates the degree to which the direct
expenses of a given function are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function. Program revenues include 1) charges for services, and
2) grants and contributions that are restricted to meeting operational or capital requirements of a
particular function.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds are reported as separate columns in the fund financial statements.
29
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE ~ARENDED JUNE 30, 2011
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (Concluded)
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 proprietary funds appear as due to/due from on the governmental fund
Balance Sheet and proprietary fund Statement ofNet Assets and as other resources and other uses on
the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances and on
the proprietary fund Statement of Revenues, Expenses and Changes in Fund Net Assets. All
interfund transactions between governmental funds are eliminated on the government-wide financial
statements. Interfund activities between governmental funds and business-type funds remain as due
to/due from on the government-wide financial statements.
All internal balances in the Statement of Net Assets have been eliminated except those representing
balances between the governmental activities and the business-type activities.
The purpose of interfund borrowing and permanent transfers is to cover temporary or permanent
short falls in cash flow within grant programs and funds.
E. PROPRIETARY FUND FINANCIAL STATEMENTS
Proprietary fund financial statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major
proprietary fund and nonmajor funds aggregated.
Proprietary funds are accounted for using the "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are
included on the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in
Fund Net Assets present increases (revenues) and decreases (expenses) in total net assets. Under the
accrual basis of accounting, revenues are recognized in the period in which they are earned while
expenses are recognized in the period in which the liability is incurred.
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.
30
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
F. GOVERNMENTAL FUND FINANCIAL STATEMENTS
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balances for all major governmental funds and nonmajor funds
aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund
balances and changes in fund balances as presented in these statements to the net assets and changes
in net assets presented in the government-wide financial statements.
The governmental fund financial statements have been prepared in accordance with generally
accepted accounting principles on the modified accrual basis. Under modified accrual basis of
accounting, revenues are recorded when susceptible to accrual, Le., 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.
Revenue received after the Regional Office's availability period are reported as deferred revenue in
the fund statements and are reported as current revenue in the Statement of Activities.
G. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and
similar items are recognized as revenue as soon as all eligibility requirements imposed by the grantor
have been met.
The governmental funds financial statements focus on the measurement of spending or "financial
flow" and the determination of changes in financial position, rather than upon net income
determination. This means that only current assets and current liabilities are generally included on
their balance sheets. Their reported fund balance (net current assets) is considered a measure of
"available spendable resources." Governmental fund operating statements present increases
(revenues and other financing sources) and decreases (expenditures and other financing uses) in net
current assets. Accordingly, they are said to present a summary of sources and uses of "available
spendable resources" during a period.
31
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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)
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 Will County Regional Office of Education
#56; 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, Will County Regional Office of Education #56 funds certain
programs by a combination of specific cost-reimbursement grants and general revenues. Thus, when
program expenses are incurred, there are both restricted and unrestricted funding resources available
to finance the program. It is Regional Office of Education #56's policy to first apply restricted funds
to such programs, and then unrestricted funds. For unrestricted funds, committed funds are used first,
then assigned funds, then unassigned funds if any.
H. FUND ACCOUNTING
The Will County Regional Office of Education #56 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 Will County Regional Office of Education #56 uses governmental, proprietary, and
fiduciary funds.
GOVERNMENTAL FUNDS
Governmental funds are those through which most governmental functions typically are reported.
Governmental funds reporting focuses on the sources, uses and balances of current financial
resources. Expendable assets are assigned to the various governmental funds according to the
purpose for which they mayor must be used. Current liabilities are assigned to the fund from which
they will be paid. The difference between governmental fund assets and liabilities is reported as a
fund balance.
32
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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)
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 Will County Regional Office of
Education #56 has presented all major funds that met the above qualifications. The Will County
Regional Office of Education #56 reports the following major governmental funds:
General Fund - The General Fund is used to account for resources traditionally associated with
government which are not required, legally or by sound financial management, to be accounted for
in another fund. The General Fund is always considered a major fund. The following accounts are
included in the General Fund:
General Operations - Accounts for monies received for, and payment of, expenditures in
connection with general administrative activities.
General State Aid - Accounts for grant monies received for, and payment of, expenditures for
regionalleaming academy supplements.
Major Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of
specific revenue sources (other than fiduciary) that are restricted to expenditures for specified
purposes. Major special revenue funds include the following:
Institute - Accounts for registration and renewal fees related to the teachers' certificates. Funds
collected from registration and renewal fees are expended to defray costs incidental to the
teachers' institutes, conferences, and workshops. All funds generated remain restricted until
expended only on the aforementioned activities.
33
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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)
Education - This fund is used to account for and report the proceeds of specific revenue sources
that are restricted by grant agreements or contracts to expenditures for specified purposes
supporting education enhancement programs as follows:
American Recovery and Reinvestment CARRA) - Education Jobs - Accounts for the federal
funding provided to LEAs to save or create education jobs for school year 2010­2011.
American Recovery and Reinvestment CARRA) - McKinney Education for Homeless
Children - Accounts for the American Recovery and Reinvestment Act (ARRA)
grant monies received for and payment of, expenditures associated with a Federal
program designed to provide counseling and educational support to homeless
children and their families.
McKinney Education for Homeless Children - Accounts for grant monies received for and
payment of, expenditures associated with a Federal program designed to provide
counseling and educational support to homeless children and their families. The
programs are funded by a Federal Steward B. McKinney Education for Homeless
Children and Youth Grant administered through the Illinois State Board of
Education.
Regional Safe Schools - Accounts for the administration of monies to be used for the
Regional Safe Schools Program Fund received from the Illinois State Board of
Education.
Title IV - 21 st Century Community Learning Centers - 08/10 - Accounts for monies received
for, and payment of, expenditures of the 21 st Century Learning Centers Grant. The
purpose of this grant is to create community learning centers that provide academic
enrichment opportunities for children, particularly students who attend high-poverty
and low performing schools.
Truants Alternative/Optional Education - Accounts for grant monies received for, and
payment of, expenses of the Truants Alternative and Optional Education Program.
34
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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)
Professional Development Alliance (PDA) - Accounts for State, and federal funded programs
designed to meet the indentified needs of the school districts within Will, Grundy, and Kendall
Counties. These services are designed to improve the educational opportunities provided to
students within these counties. Professional Development Alliance Funds include:
ROE/ISC Operations - Accounts for grant monies received for, and payment of, expenditures
of the ROE/ISC Operations Fund.
Technology For Success (Formerly Learning Technology Center) - Accounts for monies
from State of Illinois for expenditures incurred to create and support ongoing
learning teams focused on alignment of classroom level assessment and instruction.
Gifted Education (Will County and GundylKendall County) - This program accounts for the
proceeds from a grant from the Illinois State Board of Education to be used toward
the development of a diversity guide and training program for teachers to identify and
serve gifted students' needs in the classroom.
Title I - Reading First Part B SEA (Will County and GundylKendall County) - This program
supports reading initiatives for students in kindergarten through third grade.
Title I - School Improvement and Accountability (Coordination and Services) - Accounts for
grant monies received for, and payment of, expenditures of the Title I - School
Improvement and Accountability Fund. This grant provides school districts with
funds to carry out their school improvement and corrective action responsibilities
under Section 1116 (c) of Title I while offering students in schools identified for
improvement and corrective action the opportunity to transfer to another higher
performing school, including a public charter school within the district.
American Recovery and Reinvestment (ARRA) - Title I - School Improvement and
Accountability - To account for monies received from the government to support
Title I school improvement services for schools in academic difficulty.
35
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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)
The Will County Regional Office of Education #56 reports the following nonmajor governmental
funds:
Nonmajor Special Revenue Funds - All other special revenue funds not classified under Education
Fund or Professional Development Alliance are grouped under this fund for financial statement
presentation.
General Education Development (GED) - Accounts for the administration of the GED
Testing Program. Revenues consist of fees collected for testing, diplomas, and
materials.
Bus Driver Training - Accounts for bus drivers' permit fees which may be expended for bus
drivers' refresher courses.
Supervisory - Accounts for State funding used to pay expenses for supervision of school
districts in the jurisdiction.
Lambert - Accounts for private donations which are donor restricted for the support health,
welfare and education of worthy poor children residing within Will County.
PROPRIETARY FUNDS
Proprietary Fund - The Proprietary Fund accounts for revenue and expenses related to services
provided to organizations inside the Regional Office of Education #56 on a cost-reimbursement
basis. The Regional Office of Education #56 reports the following proprietary funds:
Local Professional Development Alliance (PDA) Funds - Accounts for the revenues and
expenditures associated with workshops put on by the Will County Regional Office
of Education #56.
Criminal Background Investigation - 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.
FIDUCIARY FUNDS
Agency Funds - Agency Funds are used to account for assets held by the Regional Office of
Education #56 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:
36
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. FUND ACCOUNTING (Concluded)
FIDUCIARY FUNDS (Concluded)
Agency Funds (Concluded)
Will County Area Career Cluster - Accounts for flow-through funding to develop programs
designed to align the courses offered through the Perkins grant with actual jobs or
high education opportunities.
Statewide Independent Living Council - Accounts for funds received from the Statewide
Independent Living Council (SILC) which are disbursed for educational and outreach
programs for persons with disabilities.
I. GOVERNMENTAL FUND BALANCES
Fund balance is the difference between assets and liabilities in a governmental fund. The following
types of fund balances may be presented in the Governmental Funds Balance Sheet and
Governmental Funds Combining Schedule of Accounts:
Nonspendable Fund Balance - The portion of a governmental fund's net assets that are not
available to be spent, either short term or long term, due to either their form or legal
restrictions. The Regional Office of Education #56 has no nonspendable fund balances.
Restricted Fund Balance - The portion of a governmental fund's net assets that are subject to
external enforceable legal restrictions. The following fund is restricted by a donor agreement:
Lambert Fund. The following funds are restricted by Illinois Statute: General Education
Development Fund, Bus Driver Training Fund, and the Institute Fund.
Committed Fund Balance - The portion of a governmental fund's net assets with self-imposed
constraints or limitations that have been placed at the highest level of decision making. The
Regional Office of Education #56 has no committed fund balances.
Assigned Fund Balance - The portion of a governmental fund's net assets for which an intended
use of resources has been denoted. The accounts presented with assigned fund balances are
specified for a particular purpose by the Regional Superintendent. The Regional Office of
Education #56 has no assigned fund balances.
37
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
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)
Unassigned Fund Balance - Available expendable financial resources in a governmental fund
that are not designated for a specific purpose. The Regional Office of Education #56 has
unassigned fund balances in the General Fund's General Operations and General State Aid
accounts, the Education Fund's Regional Safe School account, and the Professional
Development Alliance Fund's ROE/ISC Operations account.
J. NET ASSETS
Equity is classified as net assets and displayed in three components:
Invested in capital assets - Consists of capital assets, net of accumulated depreciation.
Restricted net assets - Consists of net assets with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or
"invested in capital assets."
K. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists of cash on deposit. The Will County Regional Office of
Education #56 considers all liquid investments with a maturity of three months or less when
purchased to be cash equivalents.
L. INVENTORY
Inventory is not recorded. The cost is recorded as an expenditure at the time individual inventory
items are purchased.
M. CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical
cost or estimated historical cost. Contributed assets are reported at fair market value as of the date
received.
38
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)
M. CAPITAL ASSETS (Concluded)
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.
Depreciation on all assets is provided on the straight-line basis over the estimated useful lives (three
to five years) of the respective assets.
N. COMPENSATED ABSENCES
The employees of the Regional Office earn vacation days based on the number of full-time years
worked as follows: 10 days for full-time staff employed 5 years or less; 15 days for full-time staff
employed more than 5 years; 20 days for full-time consultants. Vacation days do not accumulate;
therefore, no liability is accrued.
The Executive Director ofPDA receives 25 sick days annually. All other eligible employees receive
up to 15 sick days annually. There is no limit on the amount of sick days carried forward. Employee
sick leave is recorded when paid. Upon termination, employees do not receive any accumulated sick
leave pay, and therefore, no liability is accrued.
O. 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.
P. BUDGET INFORMATION
The Will County Regional Office of Education #56 acts as the administrative agent for certain grant
programs that are accounted for in the General and Education Fund. Certain programs have separate
budgets and are required to report to the Illinois State Board of Education, however, none of the
annual budgets have been legally adopted nor are they required to do so. Comparisons of budgeted
and actual results are presented as supplemental information.
Budgetary comparison schedules have been provided in supplementary schedules for the following
funds: ARRA - McKinney Education for Homeless Children, McKinney Education for Homeless
Children, Regional Safe Schools, Title IV - 21 st Century Community Learning Centers - 08/10,
Truants Alternative/Optional Education, ROE/ISC Operations, Technology for Success, Will County
Gifted Education, Grundy/Kendall County Gifted Education, Will County Title I - Reading First
Part B SEA, Grundy/Kendall County Title I - Reading First Part B SEA, Title I - School
Improvement and Accountability (Coordination and Services), and ARRA - Title I - School
Improvement and Accountability.
39
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 2 - DEPOSITS AND INVESTMENTS
The Illinois Compiled Statutes authorize the Will County Regional Office of Education #56 to make
deposits and invest in U.S. Government, State of Illinois and municipal securities, certificates of deposit
or time savings deposits insured by the FDIC, mortgage notes, bonds, or debentures issued by the Federal
Housing Administration, bonds and other obligations of the Federal National Mortgage Association,
commercial paper rated within the three highest classifications by at least two standard rating services,
credit union shares, and the Illinois Public Treasurer's Investment Pool.
A. DEPOSITS
At June 30, 2011, the carrying amount of the Will County Regional Office of Education #56's
government-wide and Agency fund deposits were $5,799,687 and $32,595, respectively, and the bank
balances were $6,163,726 and $32,349, respectively. Of the total bank balances as of June 30, 2011,
$105,113 was secured by federal depository insurance, $996,996 was invested in the Illinois Funds
Money Market Fund, and $5,093,966 was secured by repurchase agreements, commercial paper, and U.S.
government bonds.
B. INVESTMENTS
The Will County Regional Office of Education #56 does not have a formal investment policy but requires
that funds be invested solely in investments authorized by the Public Funds Investment Act, 30 ILCS
235/2. As noted above, as of June 30, 2011, the Will County Regional Office of Education #56 had
investments with a carrying and fair value of $996,996 invested in the Illinois Funds Money Market and
$5,093,966 was secured by repurchase agreements, commercial paper, and U.S. government bonds.
CREDIT RISK
At June 30, 2011, the Illinois Funds Money Market Fund had a Standard and Poor's AAAm rating. The
pool is audited annually by an outside independent auditor and copies of the report are distributed to
participants. Although not subject to direct regulatory oversight, the fund is administered by the Illinois
State Treasurer in accordance with the provisions of the Illinois Public Funds Investments Act, 30 ILCS
235. All investments are fully collateralized.
The PNC Municipal Investment Fund had a Standard and Poor's AAAm rating. This fund is authorized
for public entities and political subdivisions of the State of Illinois. It invests in U.S. Treasury securities,
commercial paper rated A2 or above, certificates of deposit and interest-bearing savings accounts, and
any other investments permissible under 30 ILCS 235/2.
INTEREST RATE RISK
The Illinois Funds Money Market Fund, created by the Illinois General Assembly, enables custodians of
public funds an investment option with a competitive rate of return on fully collateralized investments
and immediate access to the funds. The investment policy of the Illinois Funds Money Market Funds
states that unless authorized specifically by the Treasurer, a minimum of 75% of its investments shall
have less than one-year maturity and no investment shall exceed two years maturity.
40
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 2 - DEPOSITS AND INVESTMENTS (Concluded)
CONCENTRATION OF CREDIT RISK
Unless specifically authorized by the Treasurer, the Illinois Funds Money Market Fund's investment
policy limits investment categories to not exceed 25% of the portfolio, with the exception of cash
equivalents and U.S. Treasury securities. Further, certificates of deposits cannot exceed 10% of any
single financial institution's total deposits.
NOTE 3 - DEFINED BENEFIT PENSION PLAN
Plan Description. The Regional Office of Education #56'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 #56'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 online at www.imrf.org.
Funding Policy. As set by statute, the Will County Regional Office of Education #56's Regular plan
members are required to contribute 4.50 percent of their annual covered salary. The statutes require
employers to contribute the amount necessary, in addition to member contributions, to finance the
retirement coverage of its own employees. The employer contribution rate for calendar year 2010
was 9.71 percent of annual covered payroll. The Will County Regional Office of Education #56 also
contributes for disability benefits, death benefits and supplemental retirement benefits, all of which
are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF
Board of Trustees, while the supplemental retirement benefits rate is set by statute.
Annual Pension Cost. The required contribution for calendar year 2010 was $64,795.
A. TREND INFORMATION
Calendar
Year
Ending
12/31/10
12/31/09
12/31/08
Annual
Pension
Cost (APC)
$64,795
79,341
70,259
41
Percentage
ofAPC
Contributed
100%
100%
100%
Net
Pension
Obligation
$0
oo
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 3 - DEFINED BENEFIT PENSION PLAN (Concluded)
The required contribution for 2010 was determined as part of the December 31, 2008, actuarial
valuation using the entry age normal actuarial cost method. The actuarial assumptions at December
31, 2008, included a) 7.5 percent investment rate of return (net of administrative and direct
investment expenses), b) projected salary increases of 4.00% a year, attributable to inflation, c)
additional projected salary increases ranging from 0.4% to 10% per year depending on age and
service, attributable to seniority/merit, and d) post retirement benefit increases of 3% annually. The
actuarial value of your employer Regular plan assets was determined using techniques that spread
the effects of short-term volatility in the market value of investments over a five-year period with a
20% corridor between the actuarial and market value of assets. The Will County Regional Office of
Education #56'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 80.00 percent funded. The actuarial accrued liability for
benefits was $978,744 and the actuarial value of assets was $782,961, resulting in an underfunded
actuarial accrued liability (VAAL) of $195,783. The covered payroll for calendar year 2010 (annual
payroll of active employees covered by the plan) was $667,306 and the ratio of the VAAL to the
covered payroll was 29 percent.
The schedule of funding progress, presented as RSI following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS
The Will County Regional Office of Education #56 participates in the Teachers' Retirement System
of the State of Illinois (TRS). TRS is a cost-sharing multiple-employer defined benefit pension plan
that was created by the Illinois legislature for the benefit of Illinois public school teachers employed
outside the city of Chicago.
The Illinois Pension Code outlines the benefit provisions of TRS, and amendments to the plan can be
made only by legislative action with the Governor's approval. The State of Illinois maintains
primary responsibility for funding of the plan, but contributions from participating employers and
members are also required. The TRS Board of Trustees is responsible for the system's
administration.
42
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Continued)
TRS members include all active non-annuitants who are employed by a TRS-covered employer to
provide services for which teacher certification is required. The active member contribution rate for
the year ended June 30, 2011, was 9.4 percent of creditable earnings. The same contribution rate
applies to members whose first contributing service is on or after January 1, 2011, the effective date
of the benefit changes contained in Public Act 96-0889. These contributions, which may be paid on
behalf of employees by the employer, are submitted to TRS by the employer. The active member
contribution rate was also 9.4 percent for the years ended June 30, 2010 and 2009.
The State of Illinois makes contributions directly to TRS on behalf of the Will County Regional
Office of Education #56's TRS-covered employees.
On behalf contributions. The State of Illinois makes employer pension contributions on behalf of
the Will ,County Regional Office of Education #56. For the year ended June 30, 2011, State of
Illinois contributions were based on 23.10 percent of creditable earnings not paid from federal funds
and the Will County Regional Office of Education #56 recognized revenue and expenditures of
$80,228 in pension contributions that the State of Illinois paid directly to TRS. For the years ended
June 30,2010 and June 30, 2009, the State of Illinois contribution rates as percentages of creditable
earnings not paid from federal funds were 23.38 percent ($90,934) and 17.08 percent ($57,597),
respectively.
The Will County Regional Office of Education #56 makes other types of employer contributions
directly to TRS.
2.2 formula contributions. Employers contribute 0.58 percent of creditable earnings for the 2.2
formula change. This rate is specified by statute. Contributions for the year ended June 30, 2011
were $1,296. Contributions for the years ending June 30, 2010 and June 30,2009, were $1,705 and
$1,969, respectively.
Federal and special trust fund contributions. When TRS members are paid from federal and
special trust funds administered by the Will County Regional Office of Education #56, there is a
statutory requirement for the Will County Regional Office of Education #56 to pay an employer
pension contribution from those funds. Under a policy adopted by the TRS Board of Trustees that
was first effective in the fiscal year ended June 30, 2006, employer contributions for employees paid
from federal and special trust funds will be the same as the State contribution rate to TRS.
For the year ended June 30, 2011, the employer pension contribution was 23.10 percent of salaries
paid from federal and special trust funds. For the years ended June 30, 2010 and 2009, the employer
pension contribution was 23.38 and 17.08 percent of salaries paid from federal and special trust
funds, respectively. For the year ended June 30, 2011 salaries totaling $67,489 were paid from
federal and special trust funds that required employer contributions of $15,590. For the years ended
June 30, 2010 and June 30, 2009, required Will County Regional Office of Education #56
contributions were $22,559 and $15,018, respectively.
43
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 4 - TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS (Concluded)
Early Retirement Option. The Will County Regional Office of Education #56 is also required to
make one-time employer contributions to TRS for members retiring under the Early Retirement
Option (ERO). The payments vary depending on the age and salary ofthe member.
The maximum employer ERO contribution is 117.5 percent and applies when the member is age 55
at retirement.
For the year ended June 30, 2011, the Regional Office of Education #56 paid no contributions to the
ERO program. For the years ended, June 30, 2009 and June 30, 2008, the Regional Office of
Education #56 paid no employer ERO contributions.
Salary increases over 6 percent and excess sick leave. If the Will County Regional Office of
Education #56 grants salary increases over 6 percent and those salaries are used to calculate a
retiree's final average salary, the Will County Regional Office of Education #56 makes a
contribution to TRS. The contribution will cover the difference in actuarial cost of the benefit based
on actual salary increases and the benefit based on salary increase of up to 6 percent.
For the years ended June 30, 2011, the Regional Office of Education #56 paid $8,804 to TRS for
employer contributions due on salary increases in excess of 6 percent. For the years ended June 30,
2010, and 2009 the Will County Regional Office of Education #56 paid no employer contributions to
TRS for employer contributions due on salary increases in excess of 6 percent.
If the Will County Regional Office of Education #56 grants sick leave days in excess of the normal
annual allotment and those days are used as TRS service credit, the Will County Regional Office of
Education #56 makes a contribution to TRS. The contribution is based on the number of excess sick
leave days used as service credit, the highest salary used to calculate final average salary, and the
TRS total normal cost rate (18.03 percent of salary during the year ended June 30, 2011, as
recertified pursuant to Public Act 96-1511).
For the years ended June 30, 2011, 2010, and 2009 the Will County Regional Office of Education
#56 paid no employer contributions to TRS for sick leave days granted in the excess of the normal
annual allotment.
TRS financial information, an explanation of TRS benefits, and descriptions of member, employer
and State funding requirements can be found in the TRS Comprehensive Annual Financial Report
for year ended June 30, 2010. The report for the year ended June 30, 2011, is expected to be
available in late 2011. The reports may be obtained by writing to the Teachers' Retirement System
of the State of Illinois, 2815 West Washington Street, P.O. Box 19253, Springfield, Illinois 62794­9253.
The most current report is also available on the TRS Web site at trs.illinois.gov.
44
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 5 - TEACHERS' HEALTH INSURANCE SECURITY FUND
The Regional Office of Education #56 participates in the Teacher Health Insurance Security (THIS)
Fund, a cost-sharing, multiple-employer defined benefit postemployment healthcare plan that was
established by the Illinois legislature for the benefit of Illinois public school teachers employed outside
the city of Chicago. The THIS Fund provides medical, prescription, and behavioral health benefits, but
does not provide vision, dental, or life insurance benefits to annuitants of the Teachers' Retirement
System (TRS). Annuitants may participate in the State administered participating provider option plan or
choose from several managed care options.
The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines the benefit provisions of THIS
Fund and amendments to the plan can be made only by legislative action with the Governor's approval.
The Illinois Department of Healthcare and Family Services (HFS) and the Illinois Department of Central
Management Services (CMS) administer the plan with the cooperation of TRS. The director of HFS
determines the rates and premiums for annuitants and dependent beneficiaries and establishes the cost­sharing
parameters. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active
contributors to the TRS who are not employees ofthe State make a contribution to THIS Fund.
The percentage of employer required contributions in the future will be determined by the director of
HFS and will not exceed 105 percent of the percentage of salary actually required to be paid in the
previous fiscal year.
On behalf contributions. The State of Illinois makes employer retiree health insurance contributions on
behalf of Regional Office of Education #56. State contributions are intended to match contributions to
THIS Fund from active members which were 0.88 percent of pay during the year ended June 30, 2011.
State of Illinois contributions were $1,965, and Regional Office of Education #56 recognized revenue
and expenditures of this amount during the year.
State contributions intended to match active member contributions during the year ended June 30, 2010,
was 0.84 percent of pay. State contributions on behalf of the Regional Office of Education #56
employees were $2,469.
Had the Regional Office of Education #56 recognized revenue and expenditures for State contributions
intended to match active member contributions during the year ended June 30, 2009 under the current
standards, the contribution match would have been 0.84 percent of pay or $2,138.
Employer contributions to THIS Fund. The Regional Office of Education #56 also makes
contributions to THIS Fund. The employer THIS Fund contribution was 0.66 percent during the years
ended June 30, 2011, and 0.63 percent during the years ended June 30, 2010, and June 30, 2009. For the
year ended June 30, 2011, the Regional Office of Education #56 paid $1,474 to the THIS Fund. For the
years ended June 30, 2010 and 2009, the Regional Office of Education #56 paid $1,852 and $2,138 to
THIS Fund, respectively, which was 100 percent of the required contribution.
Further information on THIS Fund. The publicly available financial report of the THIS Fund may be
obtained by writing to the Department of Healthcare and Family Services, 201 S. Grand Ave.,
Springfield, IL 62763-3838.
45
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 6 - INTERFUND ACTIVITY
DUE TOIFROM OTHER FUNDS
Interfund due to/from other fund balances at June 30, 2011 consist of the following individual due
to/from other funds in the governmental funds balance sheet. The balances between governmental
funds were eliminated in the government-wide Statement ofNet Assets.
Due From Due To
Other Funds Other Funds
Education Fund $ $ 570,003
General Fund 570,003
Professional Development Alliance 306,228
Proprietary Fund 306,228
Total $ 876,231 $ 876,231
NOTE 7 - RISK MANAGEMENT
The Will County Regional Office of Education #56 is exposed to various risks of loss related to torts;
theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. The Will County Regional Office of Education #56 has purchased commercial
insurance to cover these risks. No losses have been incurred in excess of the amounts covered by
insurance over the past three years.
NOTE 8 - OPERATING LEASE
Will County Regional Office of Education #56 rents office space from Professional Development
Alliance Fund operations. The lease agreement, which originally commenced in June 1, 1995 will
expire in May 2012. Rental expense for the year ended June 30,2011 was $96,000.
The future minimum lease payments under this agreement are as follows:
Fiscal Year
2012 $
Amount
88,000
46
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 9 - CAPITAL ASSET ACTIVITY
In accordance with GASB Statement No. 34, the Will County Regional Office of Education #56 has
reported capital assets in the government-wide Statement of Net Assets. Purchases are reported as
capital outlay in the governmental fund statements. Purchases of business-type activities are
capitalized when purchased. The Regional Office's assets are composed offumiture and equipment.
The following table provides a summary of changes in total assets, accumulated depreciation, and
investment in capital assets for the year ended June 30, 2011:
Balance
July 1, 2010 Additions Deletions
Balance
June 30, 2011
Governmental Activities:
Equipment $
Building Improvements
Governmental Activities Total Assets
60,976
90,439
151,415
$ $ 6,210
6,210
$ 54,766
90,439
145,205
Less Accumulated Depreciation
Total Accumulated Depreciation
148,175
148,175
1,440
1,440
(6,210)
(6,210)
143,405
143,405
$
Governmental Activities
Investment in Capital Assets, Net 3,240 $ 1,440 $ $ 1,800
===== ==== ======
36,292
36,292
37,508
$ $ 37,508
3,648
32,644 3,648
32,644
37,508
$ 37,508 $
Business-type Activities:
Equipment
Business-type Activities Total Assets
Less Accumulated Depreciation
Total Accumulated Depreciation
Business-type Activities
Investment in Capital Assets, Net $ 4,864 $ 3,648 $ $ 1,216
======= ==== ======
Capital assets are depreciated using the straight-line method over the estimated useful lives of the
assets. Depreciation expense for the year ended June 30, 2011 of $1,440 and $3,648 was charged to
the governmental activities and the business-type activities, respectively, on the government-wide
Statement of Activities. Investment in capital assets is the component of net assets that reports
capital assets net of accumulated depreciation.
47
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 10-0N-BEHALFPAYMENTS
Will County pays certain expenditures on behalf of the Regional Office of Education #56. The
expenditures paid by Will County for the year ended June 30, 2011, were as follows:
Salaries and Benefits
Purchased Services
Supplies and Materials
$ 664,034
69,088
5,600
$ 738,722
The State of Illinois paid the following salaries on behalf of the Will County Regional Office of
Education #56:
Regional Superintendent Salary
Assistant Regional Superintendent Salary
Regional Superintendent Fringe Benefit
(Includes State paid insurance)
Assistant Regional Superintendent Fringe Benefit
(Includes State paid insurance)
TRS Pension Contributions
Teachers' Health Insurance Security (THIS)
Fund Contributions
Total
NOTE 11 - DUE TOIFROM OTHER GOVERNMENTS
$ 100,762
90,686
5,898
25,007
80,228
1,965
$ 304,546
The Will County Regional Office of Education #56's Education Fund, General Fund, Nonmajor
Fund, and Proprietary Fund have funds due from/to various other governmental units which consist
of the following:
Due From Other Governments:
Education Fund
Illinois State Board of Education
Professional Development Alliance Fund
Illinois State Board of Education
Proprietary Fund
Local Governments
Total
Due To Other Governments:
General Fund
Local Governments
Fiduciary Fund
Local Governments
Total
48
$ 678,594
403,845
1,456
$ 1,083,895
$ 126,492
32,595
$ 159,087
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 12 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Generally accepted accounting principles require disclosure of certain information concerning
individual funds (which are presented only in combination on the financial statements). Funds
having deficit fund balances/net assets and funds which overexpend appropriations during the year
are required to be disclosed.
Because some revenues from the State of Illinois will not be collected for several months after the
Regional Office's fiscal year ends, they are not considered "available" revenues and are deferred in
the governmental funds. The deferral of the revenues caused deficit fund balances as of June 30,
2011 in the following funds:
Funds with Deficit Fund Balance
ROE/ISC Operations
Regional Safe Schools
Deficit Balance
$ 25,214
42,584
NOTE 13 - DEPARTURE FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The Regional Office of Education #56 did not recognize and disclose postemployment benefits other
than pensions (OPEB) as required by Governmental Accounting Standards Board (GASB) Statement
No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions in their financial statements. In our opinion, disclosure of that information is required to
conform with accounting principles generally accepted in the United States of America.
The Regional Office has continued to account for post-employment benefits other than pensions on
a pay as you go basis and these financial statements therefore exclude a liability for benefits
employees have currently earned that will be paid at retirement.
NOTE 14 - RECLASSIFICATION
As a result of implementing GASB Statement No. 54, Fund Balance Reporting and Governmental
Fund Type Definitions, at June 30, 2011, General State Aid (GSA) funding has been reclassified
from the Education Fund to the General Fund and the ROE/ISC Operations grant has been
reclassified from the General Fund to the Professional Development Alliance Fund.
The Regional Office of Education #56 receives GSA from the Illinois State Board of Education
based on attendance in the Regional Safe School and the Truant Alternative School. This funding
supports the general operations of the Regional Safe School and the Truant Alternative School and
the Regional Office has historically reported this funding in the Education fund with the Regional
Safe School and Truant Alternative/Optional Education grant funding, however, GSA does not meet
the committed or restricted criteria set forth in GASB 54 for special revenue funds. The ROE/ISC
Operations grant which supports the general operations of the Regional Office has historically been
reported in the General Fund, however, because this funding is governed by a grant agreement with
the grantor the funding is restricted and is required to be reported as a special revenue fund.
49
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2011
NOTE 14 - RECLASSIFICATION (Concluded)
The following is the effect of these reclassifications on the beginning fund balances for the General
Fund, Education Fund, and Professional Development Alliance Fund:
General Fund:
Fund Balance - July 1, 2010
Effect of reclassifying General State Aid funding
Effect of reclassifying ROE/ISC Operations grant
Fund Balance, Restated - July 1, 2010
Education Fund:
Fund Balance - July 1, 2010
Effect of reclassifying General State Aid funding
Fund Balance, Restated - July 1, 2010
Professional Development Alliance:
$ (81,738)
1,895,120
111,039
$ 1,924,421
$ 1,488,641
(1,895,120)
$ (406,479)
Fund Balance - July 1, 2010
Effect of reclassifying ROE/ISC Operations grant
Fund Balance, Restated - July 1, 2010
NOTE 15-SUBSEQUENTEVENTS
$
$
(52,047)
(111,039)
(163,086)
For fiscal year 2012, the Governor of Illinois vetoed the appropriation line for the Regional
Superintendent's and Assistant Regional Superintendent's salaries and benefits, as well as the
appropriation line for the Regional Office's general operations grant. The Regional Superintendent's
and Assistant Regional Superintendent's salaries were reinstated in November 2011 for one year
only, to be paid from corporate personal property replacement tax funds, and the general operations
grant has been reinstated but at a lower level. The effect of these funding cuts on the Regional
Office's long-term ability to continue to provide services at their current level is unknown.
50
REQUIRED SUPPLEMENTAL INFORMATION
(Other than Management's Discussion and Analysis)
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF FUNDING PROGRESS
(UNAUDITED)
JUNE 30, 2011
Actuarial Actuarial Accrued Unfunded UAAL as a
Actuarial Value of Liability (AAL) AAL Funded Covered Percentage of
Valuation Assets Entry Age (UAAL) Ratio Payroll Covered Payroll
Date (a) (b) (b-a) (alb) (c) ( (b-a)/c )
12/31/10 782,961 978,744 195,783 80.00% 667,306 29.34%
12/31/09 759,959 923,181 163,222 82.32% 676,395 24.13%
12/31/08 701,024 789,674 88,650 88.77% 627,870 14.12%
On a market value basis, the actuarial value of assets as of December 31, 2010 is $835,051.
On a market basis, the funded ratio would be 85.32%.
51
OTHER SUPPLEMENTAL INFORMATION
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMBINING SCHEDULE OF ACCOUNTS
GENERAL FUND
JUNE 30, 2011
General General
Operations State Aid TOTALS
ASSETS
Cash and cash equivalents $ 33,373 $ 2,788,166 $ 2,821,539
Due from other funds 570,003 570,003
TOTAL ASSETS $ 33,373 $ 3,358,169 $ 3,391,542
LIABILITIES
Due to other governments:
Local $ $ 126,492 $ 126,492
Total Liabilities 126,492 126,492
FUND BALANCE
Unassigned 33,373 3,231,677 3,265,050
Total Fund Balance 33,373 3,231,677 3,265,050
TOTAL LIABILITIES AND
FUND BALANCE $ 33,373 $ 3,358,169 $ 3,391,542
52
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GENERAL FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2011
General General
Operations State Aid TOTALS
REVENUES
Local sources $ 28,067 $ $ 28,067
On-behalfpayments - Local 738,722 738,722
State sources 2,329,922 2,329,922
On-behalfpayments - State 304,546 304,546
Total Revenues 1,071,335 2,329,922 3,401,257
EXPENDITURES
Purchased services 14,675 138 14,813
Supplies and materials 1,172 2,422 3,594
Other objects 8,397 8,397
Payments to governments 991,347 991,347
On-behalfpayments 1,043,268 1,043,268
Total Expenditures 1,067,512 993,907 2,061,419
EXCESS OF REVENUES
OVER EXPENDITURES 3,823 1,336,015 1,339,838
OTHER FINANCING SOURCES
Interest 249 542 791
Total Other Financing Sources 249 542 791
NET CHANGE IN FUND BALANCE 4,072 1,336,557 1,340,629
FUND BALANCE, RESTATED - BEGINNING 29,301 1,895,120 1,924,421
FUND BALANCE - ENDING $ 33,373 $ 3,231,677 $ 3,265,050
53
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMBINING SCHEDULE OF ACCOUNTS
EDUCATION FUND
JUNE 30,2011
ARRA -
McKinney McKinney
ARRA- Education for Education for Regional Safe
Education Jobs Homeless Children Homeless Children Schools --
ASSETS
Cash and cash equivalents $ - $ 2,477 $ 7,724 $
Due from other governments:
State - - - 468,415
Federal 50,864 -
TOTAL ASSETS $ 50,864 $ 2,477 $ 7,724 $ 468,415
LIABILITIES
Accounts payable $ 11,386 $ - $ 386 $ 73,958
Due to other funds 39,478 - - 393,900
Unearned revenue - 2,477 7,338 43,141
Total Liabilities 50,864 2,477 7,724 510,999
FUND BALANCE (DEFICIT)
Unassigned - - - (42,584)
Total Fund Balance (Deficit) - - - (42,584)
TOTAL LIABILITIES AND
FUND BALANCE (DEFICIT) $ 50,864 $ 2,477 $ 7,724 $ 468,415
54
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMBINING SCHEDULE OF ACCOUNTS
EDUCATION FUND
JUNE 30,2011
Title IV - Title IV -
21 st Century 21st Century Truants
Community Community AlternativelOptional
Learning Centers - 08 Learning Centers - 10 Education TOTALS
ASSETS
Cash and cash equivalents $ 91,434 $ 83,832 $ - $ 185,467
Due from other governments:
State - - 159,315 627,730
Federal - - - 50,864
TOTAL ASSETS $ 91,434 $ 83,832 $ 159,315 $ 864,061
LIABILITIES
Accounts payable $ 86,702 $ 79,428 $ 22,690 $ 274,550
Due to other funds - - 136,625 570,003
Unearned revenue 4,732 4,404 - 62,092
Total Liabilities 91,434 83,832 159,315 906,645
FUND BALANCE (DEFICIT)
Unassigned - - - (42,584)
Total Fund Balance (Deficit) - - - (42,584)
TOTAL LIABILITIES AND
FUND BALANCE (DEFICIT) $ 91,434 $ 83,832 $ 159,315 $ 864,061
55
WILL COUNTY
REGIONAL OFFICE OF EDUCATION #56
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
EDUCATION FUND ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2011
ARRA -
McKinney McKinney
ARRA- Education for Education for Regional Safe
Education Jobs Homeless Children Homeless Children Schools
REVENUES
State sources $ - $ - $ - $ 742,063
Federal sources 130,922 10,589 474,863
Total Revenues 130,922 10,589 474,863 742,063
EXPENDITURES
Salaries and benefits
Purchased services - - 166,782
Supplies and materials - - 5,781
Payments to other governments 130,922 10,589 302,300 468,415
Total Expenditures 130,922 10,589 474,863 468,415
EXCESS OF REVENUES
OVER EXPENDITURES - - -