State Agency: Illinois Student Assistance Commission (ISAC)
Federal Agency: U.S. Department of Education (USDE)
Program Name: Federal Family Education Loans – Guaranty Agencies
ALN and Program Expenditures: 84.032G ($2,171,012,437)
Federal Award Numbers: None
Federal Award Year: July 1, 2021 to June 30, 2022
Questioned Costs: None
Compliance Requirement: Reporting
Special Tests and Provisions - All
Finding 2022-002: Inability to Implement Dear Colleague Letter
Type of Finding: Disclaimer of opinion and material weaknessCondition Found:
ISAC was unable to implement all required elements of the Dear Colleague Letter GEN-21-03 for loans
serviced under the Federal Family Education Loans – Guaranty Agencies (FFEL) program due to system
limitations.
On May 12, 2021, USDE issued Dear Colleague Letter (DCL) GEN-21-03, with an update on May 24,
2021 titled “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty
Agencies.” The purpose of DCL GEN-21-03 was to help borrowers burdened by debt during the COVID-
19 emergency. DCL GEN-21-03 had a significant impact on guaranty agency operations, including the
following:
• Interest was required to be retroactively reduced to zero percent back to March 13, 2020 through May
1, 2022.
• Guaranty agencies were not allowed to charge and retain collection cost for loan rehabilitation, and for
those rehabilitations which occurred during the period, the guarantor was required to make adjustments
on the account before it was transferred to the new holder for interest and collection cost charged.
• Guaranty agencies were allowed to charge 2.8% collection cost to borrowers for consolidation loans,
which represented a change from 18.5%, and any previous charges were required to be refunded to the
Direct Loan consolidating servicer to adjust the borrower accounts.
• Guaranty agencies were required to make adjustments to interest and involuntary payments to loans
which defaulted on/after March 13, 2020; these loans were required to be transferred to USDE under
Special Mandatory Assignment.
• Guaranty agencies may transfer funds from the Federal Fund to the Operating Fund without prior
permission from USDE to reimburse themselves for lost revenue and to make refunds to borrowers.
Guaranty agencies who received additional funds from USDE were required to report that activity on
their Annual Report.As a direct result of the requirements established upon issuance of the DCL GEN-21-03, on July 29, 2021,
ISAC notified USDE of its request to terminate its operations as a guaranty agency of the FFEL program.
On September 22, 2021, USDE approved ISAC’s request for termination as a guaranty agency of FFEL,
and also informed ISAC of its decision to designate an unrelated third party to act as the guarantor for the
State of Illinois. Effective May 1, 2022, the FFEL loan portfolio was transitioned to the third party loan
servicer.
Although the loan portfolio was transitioned to a third party to act as guaranty agency, ISAC was
responsible to service the outstanding FFEL loan portfolio and maintain compliance with USDE
requirements through the May 1, 2022 transition date. Through discussions with ISAC officials, given the
limitations of its legacy guaranty system, ISAC was unable to set interest rates for outstanding loans to 0%
as required by the DCL.
Further, given the loan portfolio was transferred to the third party servicer on May 1, 2022, we were unable
to test ISAC’s compliance with requirements that are direct and material to the FFEL program.
The outstanding FFEL loan balance at July 1, 2021 for which ISAC was required to service and maintain
compliance during the State fiscal year ended June 30, 2022 was $2,035,226,000.
Criteria or Requirement:
Dear Colleague Letter GEN-21-03 imposes certain requirements that Guaranty Agencies were to implement
into their operations, including actions on borrower communications, interest rates, involuntary collections,
voluntary payments, collection attempts, loan rehabilitation and eligibility reinstatement, credit reporting,
default aversion and default claims, National Student Loan Data System (NSLDS) reporting, mandatory
assignment, consolidations, order of transactions, reimbursement of lost revenue, and waivers.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure all elements
of the Dear Colleague Letter GEN-21-03 are implemented.
Cause:
In discussing these conditions with ISAC officials, they stated certain requirements of the DCL were not
implemented due to limitations with its legacy guaranty system.
Possible Asserted Effect:
ISAC’s inability to implement all the requirements of the Dear Colleague Letter GEN-21-03 prior to the
transition date results in noncompliance with USDE requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-002)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample. Recommendation:
With the transition of the loan portfolio to a third party guaranty agency, we recommend ISAC work with
USDE to finalize closeout of the FFEL program.
Views of ISAC Officials:
ISAC converted its FFEL loan population to a new guarantor. As part of the conversion, all remedies
required by the DCL were identified and completed either prior to the loans being transferred or once they
were uploaded by the new guarantor. ISAC and the successor guarantor scrubbed the data and the successor
guarantor ensured that on May 1, 2022 all balances were correct. The US Department of Education was
involved in all the bi-weekly meetings with ISAC and the successor guarantor and upon conversion agreed
that all steps were correctly handled.
The final federal reporting was completed and all reconciliations accepted by the US Department of
Education as of May 11, 2023. ISAC received the approval to transfer close the federal fund back and
transfer the balance to the US Treasury to officially exit the FFEL program. No further action was required.
State Agency: Illinois Department of Revenue (IDOR)
Federal Agency: U.S. Department of Treasury (Treasury)
Program Name: COVID-19 – Homeowner Assistance Fund
ALN and Program Expenditures: 21.026 ($209,795,189)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Cash Management
Finding 2022-003: Failure to Monitor Subrecipient Cash Draws
Type of Finding: Adverse opinion and material weaknessCondition Found:
IDOR passed through most of the advance drawn funds to its subrecipient while reporting no activity had
occurred for the COVID–19 – Homeowner Assistance Fund (HAF) program in the special report prepared
during fiscal year 2022.
The State designated IDOR as the State agency responsible for fiscal activities of the COVID-19 – HAF
program. IDOR passed funding through to the Illinois Housing Development Authority (IHDA) (a
component unit of the State) who works directly with program beneficiaries (eligible homeowners or
subrecipients).
During our audit procedures, we noted the State received $211,309,688 of COVID-19 – HAF program
funding from the U.S. Treasury in January 2022. At the time of the January 2022 cash receipt, we noted
IDOR had passed through $32,886,765 to IHDA. During our review of subrecipient payments (totaling
$209,795,189) made to IHDA during the year ended June 30, 2022, we noted IHDA had only reported
expenditures of $6,901,019 during the year ended June 30, 2022. Accordingly, IDOR had provided HAF
program advances totaling $202,894,170 during the year ended June 30, 2022. IDOR did not have
procedures in place to monitor whether IHDA had incurred or would be incurring program expenditures
to minimize federal cash on hand.
Additionally, the State prepared and submitted a one-time special report (Interim Report 1505-0269)
that covered the reporting period beginning on the date of the COVID-19 – HAF program award (May
3, 2021) through January 31, 2022. The key line items in the special report included the following:
• Number of unique Homeowners that received HAF assistance and subset(s) that are classified as
Socially Disadvantaged and 100 percent Area Median Income (AMI) or less
• Homeowners that received HAF assistance disaggregated by Program Design Element
• Amount of assistance provided to Homeowners disaggregated by Program Design Element
During our testing of the COVID-19 – HAF program special report, we noted the State did not report
activity data for any of the key line items.
Total subrecipient expenditures for the HAF program administered by the State were $209,795,189
during the year end June 30, 2022.Criteria or Requirement:
Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time
elapsing between the transfer of federal funds to the subrecipient and their disbursement for program
purposes is minimized as required by the applicable cash management requirements in the federal
award to the recipient (2 CFR section 200.305(b)(1)).
In addition, 2 CFR 200.303 requires non-federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations,
and program compliance requirements. Effective internal controls should include establishing
procedures to minimize the time elapsing between the transfer of funds to subrecipients and the
subrecipient’s actual cash outlay for program costs.
Cause:
The State’s relationship with IHDA is a multi-agency initiative. IDOR’s role has historically been
statutorily limited to funding agent. This role does not include expenditure monitoring or reporting
responsibilities. There was confusion in fiscal year 2022 regarding which state agency would perform
these tasks for the COVID grant money awarded to IHDA.
Possible Asserted Effect:
Failure to monitor whether subrecipients minimize the time between the receipt of federal funds and
expenditure for program purposes may result in advance funding in excess of immediate cash needs.
Additionally, failure to properly report program activities in required special reports inhibits the U.S.
Treasury from properly monitoring program activities and progress.
Repeat Finding:
A similar finding was not reported in a prior year audit. (Finding Code No. 2022-003)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOR implement procedures to monitor subrecipients to ensure funds are requested
only for expenditures which have been incurred or will be incurred within a reasonable time period to
minimize federal cash on hand. Additionally, the State should implement procedures to ensure the
COVID-19 – HAF program special report completely and accurately describes required program
activities.
Views of IDOR Officials:
The IHDA Act was updated to allow IDOR to disburse COVID money. However, the language for
the tasks to be performed by the funding agent was left unchanged. This ambiguity along with the
reporting IHDA does to other agencies contributed to confusion regarding which agency was
responsible for the grant expenditure monitoring and reporting. IDOR pursued legislative
clarification. This resulted in the decision to transition the funding agent role to DHS.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of the Treasury (Treasury)
Program Name: COVID-19 – Homeowner Assistance Fund
ALN and Program Expenditures: 21.026 ($209,795,189)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-004: Failure to Establish Subrecipient Monitoring Procedures
Type of Finding: Adverse opinion and material weaknessCondition Found:
IDHS did not perform a risk assessment or subrecipient monitoring procedures for the subrecipient of the
COVID-19 – Homeowner Assistance Fund (HAF) program for the year ended June 30, 2022.
The State designated IDHS as the State agency responsible for monitoring of the HAF program
subrecipient, Illinois Housing Development Authority (IHDA), a discretely presented component unit of
the State.
As a pass-through entity, IDHS was responsible for:
• Identifying the award and applicable requirements,
• Evaluating IHDA’s risk of noncompliance for purposes of determining the appropriate monitoring
procedures related to the subaward,
• Monitoring the activities of IHDA as necessary to ensure the subaward is used for authorized purposes,
IHDA complies with the terms and conditions of the subaward, and IHDA achieves performance goals,
and
• Issuing a management decision for audit findings pertaining to the federal award provided to IHDA, if
applicable.
During our testing, we noted IDHS did not perform any subrecipient monitoring procedures over IHDA
with respect to the HAF program during the year ended June 30, 2022. Amounts passed through to IHDA
totaled $209,795,189 for the year ended June 30, 2022.
Criteria or Requirement:
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of
subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance
with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are
achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicableaudit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4)
requires pass through entities to resolve audit findings through corrective action plans (CAP).
In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include establishing and performing
monitoring procedures in accordance with Uniform Guidance and program requirements.
Cause:
In discussing these conditions with IDHS officials, management stated this program is administered in
collaboration with the Illinois Department of Revenue, the Illinois Emergency Management Agency
(IEMA), the Governor’s Office of Management and Budget, and the Illinois Housing Development
Authority (a component unit of the State). Delays encountered in launching the program resulted in a delay
in executing interagency agreements to establish roles and responsibilities for the program.
Possible Asserted Effect:
Failure to perform required risk assessments and to adequately monitor subrecipients may result in the
subrecipient not properly administering the federal program in accordance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-004)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS implement subrecipient monitoring procedures in accordance with federal
regulations.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS has subrecipient monitoring procedures and has kicked off
subrecipient monitoring with IHDA on the Homeowners Assistance Fund program.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Matching, Level of Effort, Earmarking
Finding 2022-006: Failure to Provide Adequate Documentation for the SAPT MOE Requirement
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS was unable to provide adequate documentation to substantiate the maintenance of effort (MOE)
requirements were met for the Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
program for award year 2020 that closed during State fiscal year 2022.
As a condition of receiving federal funding under the SAPT program, USDHHS requires the State to
maintain the level of State and locally funded expenditures for substance abuse prevention and treatment
activities at an amount that is at least equal to the average level of these same amounts for the prior two
years.
During the current fiscal year, we noted IDHS was required to maintain aggregate State expenditures for
State fiscal year June 30, 2020 (SFY20) of $128,854,228. IDHS reported actual aggregate State
expenditures for State fiscal year June 30, 2020 of $159,761,708. However, included in the total MOE
reported expenditures were $94,207,294 of managed care organization (MCO) billings in SFY20. The
MCO billings represented MCO encounter data amounts, and IDHS could not provide evidence or reconcile
MCO encounter data to actual State paid expenditures. Accordingly, these expenditures are not allowable
for purposes of meeting the maintenance of effort requirement. IDHS appears to be approximately $63
million short of the $129 million MOE requirement.
Criteria or Requirement:
According to 45 CFR 96.30(a), the fiscal control and accounting procedures of the State must be sufficient
to permit tracing funds to a level of expenditure adequate to establish that such funds have not been used
in violation of the restrictions and prohibitions of the statute authorizing the block grant. Further, 45 CFR
96.134(a) states with respect to the principal agency of a State for carrying out authorized activities, the
agency shall for each fiscal year maintain aggregate State expenditures by the principal agency for
authorized activities at a level that is not less than the average level of such expenditures maintained by the
State for the two-year period preceding the fiscal year for which the State is applying for the grant.
In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain
internal control designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include establishing procedures to ensure MOE
requirements are achieved with allowable expenditures.Cause:
In discussing these conditions with IDHS officials, management stated IDHS believed its methodology was
compliant and was awaiting a decision from USDHHS on this matter.
Possible Asserted Effect:
Failure to maintain required State expenditure levels for MOE and maintain adequate supporting
documentation to support expenditures used to meet the MOE requirements results in noncompliance with
program requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-012. (Finding Code 2022-
006, 2021-012, 2020-012, 2019-009, 2018-007, 2017-008, 2016-008, 2015-009, 2014-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its process for identifying allowable expenditures to achieve the SAPT MOE,
including receiving input from the Substance Abuse and Mental Health Services Administration
(SAMHSA) regarding the applicability of MCO encounter data expenditures.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS received confirmation on November 8, 2023, that they may not
continue to use Encounter Data to meet the MOE requirement unless they can demonstrate that they can
trace the use of those funds to the level of expenditure and ensure the use of those funds do not violate the
restrictions and prohibitions of the statute authorizing the block grant. IDHS will seek SAMHSA approval
of an alternate MOE methodology that does not include encounter data. IDHS will confirm the process for
amending previous MOE numbers reported and submit any required waivers to SAMHSA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Matching, Level of Effort, Earmarking
Finding 2022-006: Failure to Provide Adequate Documentation for the SAPT MOE Requirement
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS was unable to provide adequate documentation to substantiate the maintenance of effort (MOE)
requirements were met for the Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
program for award year 2020 that closed during State fiscal year 2022.
As a condition of receiving federal funding under the SAPT program, USDHHS requires the State to
maintain the level of State and locally funded expenditures for substance abuse prevention and treatment
activities at an amount that is at least equal to the average level of these same amounts for the prior two
years.
During the current fiscal year, we noted IDHS was required to maintain aggregate State expenditures for
State fiscal year June 30, 2020 (SFY20) of $128,854,228. IDHS reported actual aggregate State
expenditures for State fiscal year June 30, 2020 of $159,761,708. However, included in the total MOE
reported expenditures were $94,207,294 of managed care organization (MCO) billings in SFY20. The
MCO billings represented MCO encounter data amounts, and IDHS could not provide evidence or reconcile
MCO encounter data to actual State paid expenditures. Accordingly, these expenditures are not allowable
for purposes of meeting the maintenance of effort requirement. IDHS appears to be approximately $63
million short of the $129 million MOE requirement.
Criteria or Requirement:
According to 45 CFR 96.30(a), the fiscal control and accounting procedures of the State must be sufficient
to permit tracing funds to a level of expenditure adequate to establish that such funds have not been used
in violation of the restrictions and prohibitions of the statute authorizing the block grant. Further, 45 CFR
96.134(a) states with respect to the principal agency of a State for carrying out authorized activities, the
agency shall for each fiscal year maintain aggregate State expenditures by the principal agency for
authorized activities at a level that is not less than the average level of such expenditures maintained by the
State for the two-year period preceding the fiscal year for which the State is applying for the grant.
In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain
internal control designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include establishing procedures to ensure MOE
requirements are achieved with allowable expenditures.Cause:
In discussing these conditions with IDHS officials, management stated IDHS believed its methodology was
compliant and was awaiting a decision from USDHHS on this matter.
Possible Asserted Effect:
Failure to maintain required State expenditure levels for MOE and maintain adequate supporting
documentation to support expenditures used to meet the MOE requirements results in noncompliance with
program requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-012. (Finding Code 2022-
006, 2021-012, 2020-012, 2019-009, 2018-007, 2017-008, 2016-008, 2015-009, 2014-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its process for identifying allowable expenditures to achieve the SAPT MOE,
including receiving input from the Substance Abuse and Mental Health Services Administration
(SAMHSA) regarding the applicability of MCO encounter data expenditures.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS received confirmation on November 8, 2023, that they may not
continue to use Encounter Data to meet the MOE requirement unless they can demonstrate that they can
trace the use of those funds to the level of expenditure and ensure the use of those funds do not violate the
restrictions and prohibitions of the statute authorizing the block grant. IDHS will seek SAMHSA approval
of an alternate MOE methodology that does not include encounter data. IDHS will confirm the process for
amending previous MOE numbers reported and submit any required waivers to SAMHSA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: CCDF Cluster
ALN and Program Expenditures: 93.575/93.596 ($941,280,574)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $7,699,780
Compliance Requirement: Special Tests and Provisions – Child Care Provider Eligibility for
American Rescue Plan Act Stabilization Funds
Finding 2022-009: Failure to Obtain Required Certifications for Child Care Providers Receiving
American Rescue Plan Act Stabilization Funds
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not obtain the required certifications at the time of application for certain providers of the CCDF
(Child Care) Cluster receiving American Rescue Plan (ARP) Act stabilization funds.
Child care providers must provide the following certifications to receive ARP Act stabilization funding
under the Child Care Cluster:
1. The provider will, when open and providing services, implement policies in line with guidance and
orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent
possible, implement policies in line with guidance from the Centers for Disease Control (CDC).
2. For each employee, the provider must pay at least the same amount in weekly wages and maintain the
same benefits for the duration of stabilization funding.
3. The provider will provide relief from copayments and tuition payments for families enrolled in the
provider’s program, to the extent possible, and prioritize such relief for families struggling to make
either type of payment.
During our test work over 40 child care providers receiving ARP Act stabilization funds (totaling
$545,843,265), we noted IDHS could not provide the required certifications for ARP Act stabilization funds
for 39 providers who are noted as ‘license-exempt’ providers by IDHS. Upon further review, we noted
IDHS did not obtain certifications for any ‘license-exempt’ providers. Child Care ARP Act Stabilization
funds passed through to license-exempt providers totaled $7,699,780 during the year ended June 30, 2022.
IDHS passed through a total of $553,500,145 of Child Care ARP Act stabilization funds for the year ended
June 30, 2022.
Criteria or Requirement:
ARP Act Section 2202(d)(2)(D) requires the State to make available on its website an application for
qualified child care providers that includes the certifications above.
Additionally, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring child care providers
who receive ARP Act stabilization funds meet the eligibility criteria and provide all required certifications
at the time of application.
Cause:
In discussing these conditions with IDHS officials, management stated the reason certifications /attestations
were not collected for these providers was because they are License-Exempt Family Child Care providers
who receive scheduled health and safety monitoring and procedures were not established to obtain
certifications from child care providers receiving ARP Act stabilization funds.
Possible Asserted Effect:
Failure to obtain required certifications for child care providers receiving ARP Act stabilization funds may
result in inadequate documentation of a provider’s eligibility under ARP Act and in federal funds being
awarded to ineligible providers.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures for verifying provider eligibility under ARP Act Stabilization
funds, including ensuring all child care providers provide the required certifications.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures for verifying provider eligibility under
ARP Act Stabilization funds, including ensuring all Child Care providers provide the required certifications.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: CCDF Cluster
ALN and Program Expenditures: 93.575/93.596 ($941,280,574)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $7,699,780
Compliance Requirement: Special Tests and Provisions – Child Care Provider Eligibility for
American Rescue Plan Act Stabilization Funds
Finding 2022-009: Failure to Obtain Required Certifications for Child Care Providers Receiving
American Rescue Plan Act Stabilization Funds
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not obtain the required certifications at the time of application for certain providers of the CCDF
(Child Care) Cluster receiving American Rescue Plan (ARP) Act stabilization funds.
Child care providers must provide the following certifications to receive ARP Act stabilization funding
under the Child Care Cluster:
1. The provider will, when open and providing services, implement policies in line with guidance and
orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent
possible, implement policies in line with guidance from the Centers for Disease Control (CDC).
2. For each employee, the provider must pay at least the same amount in weekly wages and maintain the
same benefits for the duration of stabilization funding.
3. The provider will provide relief from copayments and tuition payments for families enrolled in the
provider’s program, to the extent possible, and prioritize such relief for families struggling to make
either type of payment.
During our test work over 40 child care providers receiving ARP Act stabilization funds (totaling
$545,843,265), we noted IDHS could not provide the required certifications for ARP Act stabilization funds
for 39 providers who are noted as ‘license-exempt’ providers by IDHS. Upon further review, we noted
IDHS did not obtain certifications for any ‘license-exempt’ providers. Child Care ARP Act Stabilization
funds passed through to license-exempt providers totaled $7,699,780 during the year ended June 30, 2022.
IDHS passed through a total of $553,500,145 of Child Care ARP Act stabilization funds for the year ended
June 30, 2022.
Criteria or Requirement:
ARP Act Section 2202(d)(2)(D) requires the State to make available on its website an application for
qualified child care providers that includes the certifications above.
Additionally, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring child care providers
who receive ARP Act stabilization funds meet the eligibility criteria and provide all required certifications
at the time of application.
Cause:
In discussing these conditions with IDHS officials, management stated the reason certifications /attestations
were not collected for these providers was because they are License-Exempt Family Child Care providers
who receive scheduled health and safety monitoring and procedures were not established to obtain
certifications from child care providers receiving ARP Act stabilization funds.
Possible Asserted Effect:
Failure to obtain required certifications for child care providers receiving ARP Act stabilization funds may
result in inadequate documentation of a provider’s eligibility under ARP Act and in federal funds being
awarded to ineligible providers.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures for verifying provider eligibility under ARP Act Stabilization
funds, including ensuring all child care providers provide the required certifications.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures for verifying provider eligibility under
ARP Act Stabilization funds, including ensuring all Child Care providers provide the required certifications.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: CCDF Cluster
ALN and Program Expenditures: 93.575/93.596 ($941,280,574)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $7,699,780
Compliance Requirement: Special Tests and Provisions – Child Care Provider Eligibility for
American Rescue Plan Act Stabilization Funds
Finding 2022-009: Failure to Obtain Required Certifications for Child Care Providers Receiving
American Rescue Plan Act Stabilization Funds
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not obtain the required certifications at the time of application for certain providers of the CCDF
(Child Care) Cluster receiving American Rescue Plan (ARP) Act stabilization funds.
Child care providers must provide the following certifications to receive ARP Act stabilization funding
under the Child Care Cluster:
1. The provider will, when open and providing services, implement policies in line with guidance and
orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent
possible, implement policies in line with guidance from the Centers for Disease Control (CDC).
2. For each employee, the provider must pay at least the same amount in weekly wages and maintain the
same benefits for the duration of stabilization funding.
3. The provider will provide relief from copayments and tuition payments for families enrolled in the
provider’s program, to the extent possible, and prioritize such relief for families struggling to make
either type of payment.
During our test work over 40 child care providers receiving ARP Act stabilization funds (totaling
$545,843,265), we noted IDHS could not provide the required certifications for ARP Act stabilization funds
for 39 providers who are noted as ‘license-exempt’ providers by IDHS. Upon further review, we noted
IDHS did not obtain certifications for any ‘license-exempt’ providers. Child Care ARP Act Stabilization
funds passed through to license-exempt providers totaled $7,699,780 during the year ended June 30, 2022.
IDHS passed through a total of $553,500,145 of Child Care ARP Act stabilization funds for the year ended
June 30, 2022.
Criteria or Requirement:
ARP Act Section 2202(d)(2)(D) requires the State to make available on its website an application for
qualified child care providers that includes the certifications above.
Additionally, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring child care providers
who receive ARP Act stabilization funds meet the eligibility criteria and provide all required certifications
at the time of application.
Cause:
In discussing these conditions with IDHS officials, management stated the reason certifications /attestations
were not collected for these providers was because they are License-Exempt Family Child Care providers
who receive scheduled health and safety monitoring and procedures were not established to obtain
certifications from child care providers receiving ARP Act stabilization funds.
Possible Asserted Effect:
Failure to obtain required certifications for child care providers receiving ARP Act stabilization funds may
result in inadequate documentation of a provider’s eligibility under ARP Act and in federal funds being
awarded to ineligible providers.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures for verifying provider eligibility under ARP Act Stabilization
funds, including ensuring all child care providers provide the required certifications.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures for verifying provider eligibility under
ARP Act Stabilization funds, including ensuring all Child Care providers provide the required certifications.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-011: Inaccurate Financial Report for the SAPT program
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not prepare an accurate financial report for the Block Grants for Prevention and Treatment of
Substance Abuse (SAPT) program.
IDHS is required to prepare a federal financial report (SF-425) for the SAPT program on an annual basis.
During our testwork over the SF-425 report for the federal fiscal year ending September 30, 2021, we noted
IDHS inaccurately reported the following items: Additionally, in considering the reporting process for the SF-425 report, we noted IDHS does not perform
analytical or other procedures during the report preparation process to ensure amounts reported are
reasonable in relation to previously reported information or expectations relative to current program
activities.
Criteria or Requirement:
According to 45 CFR 96.30(a), the State’s fiscal control and accounting procedures must be sufficient to
permit preparation of reports required by the statute authorizing the block grant. In addition, 2 CFR 200.303
requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to
reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.
Effective internal controls should include procedures to ensure expenditures are accurately reported in the
federal financial report.
Cause:
In discussing these conditions with IDHS officials, management stated that the inaccurate financial
reporting for the SAPT Block Grant (Substance Abuse and Treatment) was due to refunds being recorded
in the wrong grant fiscal year. Possible Asserted Effect:
Failure to accurately prepare financial reports prevents the USDHHS from effectively monitoring the SAPT
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-011)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review the process and procedures in place to prepare financial reports required for
the SAPT program and implement procedures necessary to ensure the reports are accurate.
Views of IDHS Officials:
IDHS accepts the recommendation. The process and procedures to prepare financial reports required for
the SAPT program will be reviewed. Necessary steps will be added to ensure that the financial reports are
accurate and that refunds received from SAPT providers have been applied to the correct grant fiscal
year/grant.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-011: Inaccurate Financial Report for the SAPT program
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not prepare an accurate financial report for the Block Grants for Prevention and Treatment of
Substance Abuse (SAPT) program.
IDHS is required to prepare a federal financial report (SF-425) for the SAPT program on an annual basis.
During our testwork over the SF-425 report for the federal fiscal year ending September 30, 2021, we noted
IDHS inaccurately reported the following items: Additionally, in considering the reporting process for the SF-425 report, we noted IDHS does not perform
analytical or other procedures during the report preparation process to ensure amounts reported are
reasonable in relation to previously reported information or expectations relative to current program
activities.
Criteria or Requirement:
According to 45 CFR 96.30(a), the State’s fiscal control and accounting procedures must be sufficient to
permit preparation of reports required by the statute authorizing the block grant. In addition, 2 CFR 200.303
requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to
reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.
Effective internal controls should include procedures to ensure expenditures are accurately reported in the
federal financial report.
Cause:
In discussing these conditions with IDHS officials, management stated that the inaccurate financial
reporting for the SAPT Block Grant (Substance Abuse and Treatment) was due to refunds being recorded
in the wrong grant fiscal year. Possible Asserted Effect:
Failure to accurately prepare financial reports prevents the USDHHS from effectively monitoring the SAPT
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-011)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review the process and procedures in place to prepare financial reports required for
the SAPT program and implement procedures necessary to ensure the reports are accurate.
Views of IDHS Officials:
IDHS accepts the recommendation. The process and procedures to prepare financial reports required for
the SAPT program will be reviewed. Necessary steps will be added to ensure that the financial reports are
accurate and that refunds received from SAPT providers have been applied to the correct grant fiscal
year/grant.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.027 ($4,895,262,395)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-012: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not communicate required federal program information to subrecipients at the time of
disbursement for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program.
During our testing of 43 SLFRF subrecipient payments, we noted IDHS did not communicate the
Assistance Listing Number (ALN) at the time of disbursement for 15 of the subrecipients tested.
Amounts passed through to subrecipients by IDHS under the SLFRF program totaled $60,364,704 during
the year ended June 30, 2022. Amounts passed through to subrecipients by the State under the SLFRF
program totaled $336,176,469 during the year ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDHS officials, management stated some staff were not aware of the
requirement to notify subrecipients of ALNs at the time of disbursement.
Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-012)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS add to their warrant description the ALN for each disbursement made to
subrecipients.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure that the description of the Assistance Listing
Numbers (ALN) is properly communicated to subrecipients at the time of disbursement.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.027 ($4,895,262,395)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-012: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not communicate required federal program information to subrecipients at the time of
disbursement for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program.
During our testing of 43 SLFRF subrecipient payments, we noted IDHS did not communicate the
Assistance Listing Number (ALN) at the time of disbursement for 15 of the subrecipients tested.
Amounts passed through to subrecipients by IDHS under the SLFRF program totaled $60,364,704 during
the year ended June 30, 2022. Amounts passed through to subrecipients by the State under the SLFRF
program totaled $336,176,469 during the year ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDHS officials, management stated some staff were not aware of the
requirement to notify subrecipients of ALNs at the time of disbursement.
Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-012)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS add to their warrant description the ALN for each disbursement made to
subrecipients.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure that the description of the Assistance Listing
Numbers (ALN) is properly communicated to subrecipients at the time of disbursement.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $3,218,270
Compliance Requirement: Eligibility
Finding 2022-016: Failure to Discontinue CHIP Benefits for Ineligible Individuals
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS improperly continued providing benefits under the Children’s Health Insurance Program (CHIP)
program to individuals who were over the age of 19 prior to the start of the Public Health Emergency
(PHE) on March 13, 2020.
The CHIP program provides benefits to children under the age of 19 at an enhanced federal participation
(FFP) rate. CHIP benefits should be discontinued when a beneficiary turns 19; however, if they meet all
other eligibility criteria, these beneficiaries are allowed to transition to benefits under the Medicaid Cluster
program.
During our testing of payments (totaling $351,494) made on behalf of 60 CHIP beneficiaries, we
identified three beneficiaries(with sampled medical payments of $3,246) who were over the age of 19 on
or before March 13, 2020 (the beginning of the PHE). The total medical payments made on behalf of these
three beneficiaries during the year ended June 30, 2022, were $264,418. DHFS performed a review of
medical payments made during the year ended June 30, 2022 and identified a total of 1,330 CHIP
beneficiaries who attained the age of 19 prior to the beginning of the PHE for whom medical payments
totaling $3,218,270 were made during the year ended June 30, 2022.
We also noted DHFS has not established adequate controls to identify and remove individuals over the
age of 19 (who did not meet the eligibility requirements for the CHIP program) prior to the PHE to
determine if they were eligible for the Medicaid Cluster program.
Medical payments made on behalf of CHIP beneficiaries during the year ended June 30, 2022, totaled
$528,680,095.
Criteria or Requirement:
In accordance with 42 CFR 435.10 and the OMB Compliance Supplement, dated May 2022, the State is
required to determine client eligibility in accordance with eligibility requirements defined in the approved
State Plans for the CHIP program. Specifically, 42 CFR 457.320(a) requires the State CHIP agency to
provide benefits for groups of children up to, but not including the age 19 in addition to other eligibility criteria. State Plan Amendment IL-14-0009 includes general eligibility considerations which allows
benefits to be provided for children up to the age of 19 which is consistent with 42 CFR 457.320(a).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include establishing and maintaining
adequate controls over processes to perform and document beneficiary eligibility determinations.
Cause:
In discussing these conditions with DHFS officials, they stated the benefits were provided due to untimely
processing of redeterminations prior to the COVID-19 pandemic. After the pandemic, DHFS officials
believed they had to continue providing benefits to these individuals under the CHIP program.
Possible Asserted Effect:
Failure to properly perform eligibility determinations in accordance with State Plans may result in federal
funds being awarded to ineligible beneficiaries, which are unallowable costs.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-016)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS review its current process for performing eligibility decisions and consider changes
necessary to ensure all initial and redetermination decisions are performed in accordance with guidelines
set forth by the State Plan and temporary guidance set forth by COVID-19 waivers and announcements.
Views of DHFS Officials:
DHFS accepts the recommendation. In accordance with Federal CMS’ directive, DHFS resumed normal
operations regarding eligibility and redeterminations as of April 1, 2023. States can now terminate
individuals no longer eligible; Federal CMS has given states up to 14 months to return to normal eligibility
operations.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $3,218,270
Compliance Requirement: Eligibility
Finding 2022-016: Failure to Discontinue CHIP Benefits for Ineligible Individuals
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS improperly continued providing benefits under the Children’s Health Insurance Program (CHIP)
program to individuals who were over the age of 19 prior to the start of the Public Health Emergency
(PHE) on March 13, 2020.
The CHIP program provides benefits to children under the age of 19 at an enhanced federal participation
(FFP) rate. CHIP benefits should be discontinued when a beneficiary turns 19; however, if they meet all
other eligibility criteria, these beneficiaries are allowed to transition to benefits under the Medicaid Cluster
program.
During our testing of payments (totaling $351,494) made on behalf of 60 CHIP beneficiaries, we
identified three beneficiaries(with sampled medical payments of $3,246) who were over the age of 19 on
or before March 13, 2020 (the beginning of the PHE). The total medical payments made on behalf of these
three beneficiaries during the year ended June 30, 2022, were $264,418. DHFS performed a review of
medical payments made during the year ended June 30, 2022 and identified a total of 1,330 CHIP
beneficiaries who attained the age of 19 prior to the beginning of the PHE for whom medical payments
totaling $3,218,270 were made during the year ended June 30, 2022.
We also noted DHFS has not established adequate controls to identify and remove individuals over the
age of 19 (who did not meet the eligibility requirements for the CHIP program) prior to the PHE to
determine if they were eligible for the Medicaid Cluster program.
Medical payments made on behalf of CHIP beneficiaries during the year ended June 30, 2022, totaled
$528,680,095.
Criteria or Requirement:
In accordance with 42 CFR 435.10 and the OMB Compliance Supplement, dated May 2022, the State is
required to determine client eligibility in accordance with eligibility requirements defined in the approved
State Plans for the CHIP program. Specifically, 42 CFR 457.320(a) requires the State CHIP agency to
provide benefits for groups of children up to, but not including the age 19 in addition to other eligibility criteria. State Plan Amendment IL-14-0009 includes general eligibility considerations which allows
benefits to be provided for children up to the age of 19 which is consistent with 42 CFR 457.320(a).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include establishing and maintaining
adequate controls over processes to perform and document beneficiary eligibility determinations.
Cause:
In discussing these conditions with DHFS officials, they stated the benefits were provided due to untimely
processing of redeterminations prior to the COVID-19 pandemic. After the pandemic, DHFS officials
believed they had to continue providing benefits to these individuals under the CHIP program.
Possible Asserted Effect:
Failure to properly perform eligibility determinations in accordance with State Plans may result in federal
funds being awarded to ineligible beneficiaries, which are unallowable costs.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-016)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS review its current process for performing eligibility decisions and consider changes
necessary to ensure all initial and redetermination decisions are performed in accordance with guidelines
set forth by the State Plan and temporary guidance set forth by COVID-19 waivers and announcements.
Views of DHFS Officials:
DHFS accepts the recommendation. In accordance with Federal CMS’ directive, DHFS resumed normal
operations regarding eligibility and redeterminations as of April 1, 2023. States can now terminate
individuals no longer eligible; Federal CMS has given states up to 14 months to return to normal eligibility
operations.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Children and Family Services (DCFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Adoption Assistance
ALN and Program Expenditures: 93.659 ($95,153,644)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility
Finding 2022-019: Inadequate Procedures to Reasonably Ensure Children are in the Continued Care
of Their Adoptive Parent
Type of Finding: Noncompliance and material weakness Condition Found:
DCFS does not have adequate procedures to reasonably ensure adoptive children for which adoption assistance
subsidies are paid are in the continued care of their adoptive parent(s).
The Adoption Assistance program provides funds to states to support the payment of subsidies and nonrecurring
expenses on behalf of eligible children with special needs. A child’s eligibility for the program
is determined initially at the time of adoption proceedings. However, it is the State’s responsibility to
establish a process to ensure that children on behalf of whom the State is making subsidy payments are in
the continued care of their adoptive parent(s).
Prior to fiscal year 2019, the State sent a recertification form to the adoptive parent(s) of a child on behalf
of whom the parent is receiving adoption subsidy payments on an annual basis. The form contained a
series of questions concerning the parents’ legal and financial responsibility for the child. The adoptive
parent(s) were required to answer the questions and then sign and return the form to DCFS to demonstrate
their continued legal and financial responsibility for the adopted child. Effective January 29, 2018, the
State amended DCFS’s policy guide to eliminate the requirement for the adoptive parent to complete the
recertification form. DCFS has not implemented new procedures or controls since the elimination of the
requirement to address the continued care eligibility requirement. While adoptive parents are told they
should inform DCFS of any change in the child’s care, DCFS does not have a process or control to validate
that all children remain in the care of their adoptive parents.
Adoption subsidies paid during the year ended June 30, 2022 totaled $71,769,651.
Criteria or Requirement:
According to 42 USC 673(a)(4), payments are discontinued when the state determines that the adoptive
parents are no longer legally responsible for the support of the child. Parents must keep the state agency
informed of circumstances that would make the child ineligible for adoption assistance payments or eligible
for assistance payments in a different amount. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include establishing procedures to monitor and validate
whether an adoptive child is in the continued care of their adoptive parent.
Cause:
In discussing these conditions with DCFS officials, they stated DCFS officials misinterpreted the federal
guidelines as well as the prior auditor recommendation when eliminating the completion of the
recertification form, which led to an incomplete solution to the control issues identified.
Possible Asserted Effect:
Failure to establish adequate procedures to identify and validate changes in the care of adoptive children
could result payments for ineligible beneficiaries which are unallowable costs.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-002. (Finding Code 2022-019,
2021-002, 2020-003, 2019-029, 2018-031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DCFS implement a process and controls to ensure payments made to adoptive parents are
only on behalf of eligible children in the continued care of their adoptive parents.
View of DCFS Officials:
DCFS agrees with the auditors’ recommendation. DCFS is currently working with USDHHS’ Childrens’
Bureau (CB) on a Program Improvement Plan (PIP) related to Adoption Assistance subsidy payments.
The PIP requires significant changes to Policy that are still being vetted by CB and DCFS management,
which will have a significant impact on how this program is carried out. As soon as the Policy changes
are completed, DCFS will finalize procedures consistent with Policy, the Social Security Act and Title
IV-E. These procedures will include controls to ensure payments made are appropriate per the subsidy
agreements with the adoptive parents and federal requirements.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers.
Federal Award Year: Various – see table of award numbers.
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-020: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDPH failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Epidemiology and Laboratory Capacity for Infectious
Diseases (ELC) program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDPH did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the ELC program for the period
July 1, 2021, through June 30, 2022. Of the information required to be reported, the following key data
elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that a new procedure was developed by the
previous CFO but required staffing to fully implement.
Possible Asserted Effect:
Failure to identify award subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-021. (Finding Code 2022-
020, 2021-021)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDPH Officials:
We agree with the recommendations of the auditor.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers.
Federal Award Year: Various – see table of award numbers.
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-020: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDPH failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Epidemiology and Laboratory Capacity for Infectious
Diseases (ELC) program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDPH did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the ELC program for the period
July 1, 2021, through June 30, 2022. Of the information required to be reported, the following key data
elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that a new procedure was developed by the
previous CFO but required staffing to fully implement.
Possible Asserted Effect:
Failure to identify award subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-021. (Finding Code 2022-
020, 2021-021)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDPH Officials:
We agree with the recommendations of the auditor.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-021: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDPH did not communicate required federal program information to subrecipients at the time of
disbursement for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program.
During our testing of 46 ELC subrecipient payments (totaling $18,040,567), we noted IDPH did not
communicate the Assistance Listing Number (ALN) at the time of disbursement for 7 of the subrecipient
payments tested (totaling $2,284,855). Further, we noted IDPH did not have effective controls to ensure
the ALN number was communicated at the time of payment.
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that once the deficiency was brought to
their attention in November of 2021, the corrective action was implemented, but the payments noted above
were before the deficiency was identified. Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement may inhibit the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-022. (Finding Code 2022-
021, 2021-022)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH add the ALN to the warrant description for each subrecipient disbursement made.
We also recommend IDPH implement additional control procedures necessary to ensure subrecipients are
provided information in accordance with Uniform Guidance requirements.
Views of IDPH Officials:
We agree with the auditor’s recommendation and have implemented the recommendations during the audit
period under review.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-021: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDPH did not communicate required federal program information to subrecipients at the time of
disbursement for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program.
During our testing of 46 ELC subrecipient payments (totaling $18,040,567), we noted IDPH did not
communicate the Assistance Listing Number (ALN) at the time of disbursement for 7 of the subrecipient
payments tested (totaling $2,284,855). Further, we noted IDPH did not have effective controls to ensure
the ALN number was communicated at the time of payment.
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that once the deficiency was brought to
their attention in November of 2021, the corrective action was implemented, but the payments noted above
were before the deficiency was identified. Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement may inhibit the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-022. (Finding Code 2022-
021, 2021-022)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH add the ALN to the warrant description for each subrecipient disbursement made.
We also recommend IDPH implement additional control procedures necessary to ensure subrecipients are
provided information in accordance with Uniform Guidance requirements.
Views of IDPH Officials:
We agree with the auditor’s recommendation and have implemented the recommendations during the audit
period under review.
State Agency: Illinois Criminal Justice Information Authority (ICJIA)
Federal Agency: U.S. Department of Justice (USDOJ)
Program Name: Crime Victim Assistance
ALN and Program Expenditures: 16.575 ($86,803,479)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-022: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
ICJIA failed to report subaward amendment information required by the Federal Funding Accountability
and Transparency Act (FFATA) for awards granted to subrecipients of the Crime Victim Assistance (CVA)
program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
During State fiscal year 2022, ICJIA did not have adequate controls in place to identify and report subaward
amendment information required by FFATA. For 16 FFATA reports tested, six had amendments that were
required to be reported. ICJIA did not report the correct amounts for two amendments tested. ICJIA was
unable to identify the number of contract amendments made during the year ended June 30, 2022.
ICJIA passed through approximately $83,376,000 to subrecipients of the CVA program during the year
ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a public
facing, OMB-designated, governmentwide website and follow OMB guidance to support Transparency
Act implementation. Consistent with the Federal Acquisition Regulation (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include implementing procedures to ensure all FFATA
reports are accurately prepared and submitted in accordance with federal regulations.
Cause:
In discussing these conditions with ICJIA officials, they stated they did not have a policy in place to report
amendment to subawards until October 2022.
Possible Asserted Effect:
Failure to report subaward amendments in accordance with FFATA results in noncompliance with federal
requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-028. (Finding Code 2022-
022, 2021-028)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend ICJIA establish procedures and controls to identify awards and amendments subject to
FFATA reporting requirements and report required subaward information in accordance with FFATA.
Views of ICJIA Officials:
ICJIA accepts the recommendation. Prior to receipt of this finding, in calendar year 2022, ICJIA developed
a new internal procedure that assisted agency personnel in identifying awards and amendments subject to
FFATA reporting requirements and report required subaward information in accordance with FFATA.
State Agency: Illinois Criminal Justice Information Authority (ICJIA)
Federal Agency: U.S. Department of Justice (USDOJ)
Program Name: Crime Victim Assistance
ALN and Program Expenditures: 16.575 ($86,803,479)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-023: Inaccurate Performance Report
Type of Finding: Noncompliance and material weaknessCondition Found:
ICJIA did not prepare an accurate performance report for the Crime Victim Assistance program.
ICJIA is required to prepare an annual Victims of Crime Act (VOCA) performance report for the Crime
Victim Assistance program. During our testwork over the VOCA report for the federal fiscal year ended
September 30, 2021, we noted the following errors: Additionally, in considering the reporting process for the VOCA performance report, we noted ICJIA did
not perform analytical or other procedures during the report preparation process to ensure amounts
reported were reasonable in relation to previously reported information or expectations relative to current
program activities.
Criteria or Requirement:
The Clarification for Victim Assistance Grantee PMT Reporting guidance from the Office for Victims of
Crime (OVC) in April 2020 communicates that "States should enter the amount of each federal award that
is allocated for administrative and training purposes on the Administration: Federal Award List page.
Administrative and training allocations should be updated at least annually, before the annual report is
submitted via Grant Management System (GMS).” In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure
amounts are accurately reported in the VOCA performance report.
Cause:
In discussing these conditions with ICJIA officials, they stated the administrative expenditures for each
award are tracked in their grants management system, however, none were reported in the annual
performance report.
Possible Asserted Effect:
Failure to accurately prepare the annual performance report prevents the USDOJ from effectively
monitoring the Crime Victim Assistance Program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend ICJIA accurately report data and information in its VOCA performance report.
Additionally, we recommend ICJIA review the process and procedures in place to prepare the annual
VOCA performance report required for the Crime Victim Assistance program and implement procedures
necessary to ensure the report is accurate.
Views of ICJIA Officials:
ICJIA accepts the recommendation. ICJIA will review its processes and procedures for the preparation of
the annual VOCA performance report and will update the processes and procedures to ensure accurate
reporting.
State Agency: Illinois Criminal Justice Information Authority (ICJIA)
Federal Agency: U.S. Department of Justice (USDOJ)
Program Name: Crime Victim Assistance
ALN and Program Expenditures: 16.575 ($86,803,479)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-024: Inadequate Controls over the Communication of Subrecipient Monitoring Results
Type of Finding: Significant deficiency Condition Found:
ICJIA did not consistently document supervisory reviews of the communication of on-site monitoring
review results in accordance with ICJIA’s control procedures.
ICJIA internal control procedures require a supervisory review and approval of program site visit reports
prior to providing the results to subrecipients. During our testing of 7 on-site reviews, we noted ICJIA
could not provide evidence a supervisory review of the site visit reports or communications of on-site
monitoring results to subrecipients had been performed for 3 on-site reviews tested in accordance with
ICJIA’s policies.
ICJIA passed through approximately $83,376,000 to subrecipients of the CVA program during the year
ended June 30, 2022.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include ensuring supervisory reviews of on-site
monitoring results and communications are performed.
Cause:
In discussing these conditions with ICJIA officials, they stated there was a timing issue between the report
approvals and sending of the follow up letters due to oversight.
Possible Asserted Effect:
Failure to properly review and approve monitoring reports may result inaccurate monitoring information
and results being communicated to subrecipients. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-024)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend ICJIA review its current process for ensuring on-site monitoring results and
communications are properly reviewed and approved before they are sent to the subrecipients.
Views of ICJIA Officials:
ICJIA accepts the recommendation. The ICJIA Site Visit Policy requires approval of the site visit report by
the program supervisor prior to submission of a follow-up letter to subrecipients. ICJIA will review the Site
Visit Policy to ensure the language describing the timing of submissions is clear and will train staff on the
current policy, or any updates identified as part of the agency’s review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Transportation (IDOT)
Federal Agency: U.S. Department of Transportation (USDOT)
Program Name: COVID-19 – Airport Improvement Program
ALN and Program Expenditures: 20.106 ($96,389,802)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-029: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOT failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Airport Improvement Program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOT did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Airport Improvement
Program for the period July 1, 2021 through May 1, 2022 and the following information was not submitted:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
IDOT passed through approximately $95,044,000 to subrecipients of the COVID-19 – Airport
Improvement Program during the year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Regulation (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOT officials, IDOT stated missing FFATA reporting was due to
staffing transition combined with a lack of appropriate staffing resources.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subaward in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-036. (Finding Code 2022-029, 2021-
036)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOT establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOT Officials:
IDOT agrees with the finding and recommendation.
State Agency: Illinois Department of Transportation (IDOT)
Federal Agency: U.S. Department of Transportation (USDOT)
Program Name: COVID-19 – Airport Improvement Program
ALN and Program Expenditures: 20.106 ($96,389,802)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-029: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOT failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Airport Improvement Program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOT did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Airport Improvement
Program for the period July 1, 2021 through May 1, 2022 and the following information was not submitted:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
IDOT passed through approximately $95,044,000 to subrecipients of the COVID-19 – Airport
Improvement Program during the year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Regulation (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOT officials, IDOT stated missing FFATA reporting was due to
staffing transition combined with a lack of appropriate staffing resources.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subaward in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-036. (Finding Code 2022-029, 2021-
036)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOT establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOT Officials:
IDOT agrees with the finding and recommendation.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department of Corrections (DOC)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.019 ($190,168,889)
21.027 ($4,895,262,395)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: $219,695
Compliance Requirement: Allowable Costs/Cost Principles and Period of Performance
Finding 2022-033: Unallowable Costs Charged to the Coronavirus Relief Fund Program
Type of Finding: Material noncompliance and material weakness (CRF)
Material weakness (SLFRF) Condition Found:
DOC charged subrecipient expenditures to the Coronavirus Relief Fund (CRF) program which were
incurred prior to the period of performance.
The CRF program was enacted by Congress to provide direct payments to state, territorial, tribal, and certain
eligible local governments to cover: (1) necessary expenditures incurred due to the public health emergency
with respect to COVID-19; (2) costs that were not accounted for in the governments approved budget as of
March 27, 2020; and (3) costs that were incurred during the period from March 1, 2020 through December
31, 2021. During our testing of 19 expenditures (totaling $3,869,083) charged to the CRF program during
the year ended June 30, 2022, we noted two expenditures for payments to subrecipients (totaling $219,695)
for which the underlying expenditures submitted to the DOC for reimbursement pertained to expenditures
incurred by the subrecipient prior to March 1, 2020. As these expenditures were incurred prior to the
beginning of the period of performance for the CRF program, they are not allowable costs.
Additionally, we noted seven CRF expenditures (totaling $2,007,224) from the 19 tested that were not paid
by the State until after June 30, 2022, but were included in the 2022 Schedule of Expenditures of Federal
Awards (SEFA). As the State prepares its SEFA using the cash basis of accounting, these expenditures
were erroneously reported on the 2022 SEFA. Further, in review of the expenditures claimed under the
CRF program by DOC, we noted 69 expenditures (totaling $18,080,783) that were not paid by the State
until after June 30, 2022. The State’s 2022 SEFA was not corrected for this error.
Further, we noted DOC has not established supervisory review controls over expenditures for the CRF and
SLFRF programs at an adequate level of precision to ensure: (1) expenditures reimbursed to subrecipients
are within the period of performance or (2) expenditures reported on the SEFA are reported in accordance
with the cash basis of accounting. DOC expenditures for the CRF program and SLFRF program totaled $128,426,203 and $304,791,247,
respectively, during the year ended June 30, 2022.
Criteria or Requirement:
The Federal Register Volume 86, Number 10 (dated January 15, 2021) states “the CARES Act provides
that payments from the Fund may only be used to cover costs that:
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of
enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021.”
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which
must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure: (1) expenditures are
reimbursed by the State are within the period of performance and (2) are reported on the SEFA in
accordance with cash basis of accounting.
Cause:
In discussing these conditions with DOC officials, they stated that when the expenses were selected for
reimbursement, the posting date of the transaction was inadvertently reviewed and used. All posting dates
fell on or before June 30, 2022. As noted in the finding, the actual warrant date should have been reviewed
and used for cash basis.
Possible Asserted Effect:
Failure to ensure payments to subrecipients are only for expenditures incurred during the period of
performance results in noncompliance and unallowable costs. Additionally, failure to report expenditures
in accordance with the cash basis of accounting inhibits the auditors ability to properly determine major
programs in accordance with the Uniform Guidance.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-033)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DOC implement procedures to properly review detail expenditures at the appropriate level
of precision to ensure federal expenditures: (1) are within the period of performance and (2) are reported
on the State’s SEFA in accordance with the cash basis of accounting. Views of DOC Officials:
DOC agrees with the recommendation. DOC will ensure appropriate reviews are completed prior to
submission of information related to expenditures of Federal Awards.
State Agency: Illinois Department of Corrections (DOC)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.019 ($190,168,889)
21.027 ($4,895,262,395)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: $219,695
Compliance Requirement: Allowable Costs/Cost Principles and Period of Performance
Finding 2022-033: Unallowable Costs Charged to the Coronavirus Relief Fund Program
Type of Finding: Material noncompliance and material weakness (CRF)
Material weakness (SLFRF) Condition Found:
DOC charged subrecipient expenditures to the Coronavirus Relief Fund (CRF) program which were
incurred prior to the period of performance.
The CRF program was enacted by Congress to provide direct payments to state, territorial, tribal, and certain
eligible local governments to cover: (1) necessary expenditures incurred due to the public health emergency
with respect to COVID-19; (2) costs that were not accounted for in the governments approved budget as of
March 27, 2020; and (3) costs that were incurred during the period from March 1, 2020 through December
31, 2021. During our testing of 19 expenditures (totaling $3,869,083) charged to the CRF program during
the year ended June 30, 2022, we noted two expenditures for payments to subrecipients (totaling $219,695)
for which the underlying expenditures submitted to the DOC for reimbursement pertained to expenditures
incurred by the subrecipient prior to March 1, 2020. As these expenditures were incurred prior to the
beginning of the period of performance for the CRF program, they are not allowable costs.
Additionally, we noted seven CRF expenditures (totaling $2,007,224) from the 19 tested that were not paid
by the State until after June 30, 2022, but were included in the 2022 Schedule of Expenditures of Federal
Awards (SEFA). As the State prepares its SEFA using the cash basis of accounting, these expenditures
were erroneously reported on the 2022 SEFA. Further, in review of the expenditures claimed under the
CRF program by DOC, we noted 69 expenditures (totaling $18,080,783) that were not paid by the State
until after June 30, 2022. The State’s 2022 SEFA was not corrected for this error.
Further, we noted DOC has not established supervisory review controls over expenditures for the CRF and
SLFRF programs at an adequate level of precision to ensure: (1) expenditures reimbursed to subrecipients
are within the period of performance or (2) expenditures reported on the SEFA are reported in accordance
with the cash basis of accounting. DOC expenditures for the CRF program and SLFRF program totaled $128,426,203 and $304,791,247,
respectively, during the year ended June 30, 2022.
Criteria or Requirement:
The Federal Register Volume 86, Number 10 (dated January 15, 2021) states “the CARES Act provides
that payments from the Fund may only be used to cover costs that:
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of
enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021.”
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which
must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure: (1) expenditures are
reimbursed by the State are within the period of performance and (2) are reported on the SEFA in
accordance with cash basis of accounting.
Cause:
In discussing these conditions with DOC officials, they stated that when the expenses were selected for
reimbursement, the posting date of the transaction was inadvertently reviewed and used. All posting dates
fell on or before June 30, 2022. As noted in the finding, the actual warrant date should have been reviewed
and used for cash basis.
Possible Asserted Effect:
Failure to ensure payments to subrecipients are only for expenditures incurred during the period of
performance results in noncompliance and unallowable costs. Additionally, failure to report expenditures
in accordance with the cash basis of accounting inhibits the auditors ability to properly determine major
programs in accordance with the Uniform Guidance.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-033)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DOC implement procedures to properly review detail expenditures at the appropriate level
of precision to ensure federal expenditures: (1) are within the period of performance and (2) are reported
on the State’s SEFA in accordance with the cash basis of accounting. Views of DOC Officials:
DOC agrees with the recommendation. DOC will ensure appropriate reviews are completed prior to
submission of information related to expenditures of Federal Awards.
State Agency: Illinois Department of Corrections (DOC)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.019 ($190,168,889)
21.027 ($4,895,262,395)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: $219,695
Compliance Requirement: Allowable Costs/Cost Principles and Period of Performance
Finding 2022-033: Unallowable Costs Charged to the Coronavirus Relief Fund Program
Type of Finding: Material noncompliance and material weakness (CRF)
Material weakness (SLFRF) Condition Found:
DOC charged subrecipient expenditures to the Coronavirus Relief Fund (CRF) program which were
incurred prior to the period of performance.
The CRF program was enacted by Congress to provide direct payments to state, territorial, tribal, and certain
eligible local governments to cover: (1) necessary expenditures incurred due to the public health emergency
with respect to COVID-19; (2) costs that were not accounted for in the governments approved budget as of
March 27, 2020; and (3) costs that were incurred during the period from March 1, 2020 through December
31, 2021. During our testing of 19 expenditures (totaling $3,869,083) charged to the CRF program during
the year ended June 30, 2022, we noted two expenditures for payments to subrecipients (totaling $219,695)
for which the underlying expenditures submitted to the DOC for reimbursement pertained to expenditures
incurred by the subrecipient prior to March 1, 2020. As these expenditures were incurred prior to the
beginning of the period of performance for the CRF program, they are not allowable costs.
Additionally, we noted seven CRF expenditures (totaling $2,007,224) from the 19 tested that were not paid
by the State until after June 30, 2022, but were included in the 2022 Schedule of Expenditures of Federal
Awards (SEFA). As the State prepares its SEFA using the cash basis of accounting, these expenditures
were erroneously reported on the 2022 SEFA. Further, in review of the expenditures claimed under the
CRF program by DOC, we noted 69 expenditures (totaling $18,080,783) that were not paid by the State
until after June 30, 2022. The State’s 2022 SEFA was not corrected for this error.
Further, we noted DOC has not established supervisory review controls over expenditures for the CRF and
SLFRF programs at an adequate level of precision to ensure: (1) expenditures reimbursed to subrecipients
are within the period of performance or (2) expenditures reported on the SEFA are reported in accordance
with the cash basis of accounting. DOC expenditures for the CRF program and SLFRF program totaled $128,426,203 and $304,791,247,
respectively, during the year ended June 30, 2022.
Criteria or Requirement:
The Federal Register Volume 86, Number 10 (dated January 15, 2021) states “the CARES Act provides
that payments from the Fund may only be used to cover costs that:
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of
enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021.”
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which
must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure: (1) expenditures are
reimbursed by the State are within the period of performance and (2) are reported on the SEFA in
accordance with cash basis of accounting.
Cause:
In discussing these conditions with DOC officials, they stated that when the expenses were selected for
reimbursement, the posting date of the transaction was inadvertently reviewed and used. All posting dates
fell on or before June 30, 2022. As noted in the finding, the actual warrant date should have been reviewed
and used for cash basis.
Possible Asserted Effect:
Failure to ensure payments to subrecipients are only for expenditures incurred during the period of
performance results in noncompliance and unallowable costs. Additionally, failure to report expenditures
in accordance with the cash basis of accounting inhibits the auditors ability to properly determine major
programs in accordance with the Uniform Guidance.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-033)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DOC implement procedures to properly review detail expenditures at the appropriate level
of precision to ensure federal expenditures: (1) are within the period of performance and (2) are reported
on the State’s SEFA in accordance with the cash basis of accounting. Views of DOC Officials:
DOC agrees with the recommendation. DOC will ensure appropriate reviews are completed prior to
submission of information related to expenditures of Federal Awards.
State Agency: Illinois Department of Commerce and Economic Opportunity (DCEO)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
ALN and Program Expenditures: 21.019 ($190,168,889)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-034: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Significant deficiency Condition Found:
DCEO did not adequately review single audit reports received from its subrecipients for the Coronavirus
Relief Fund (CRF) program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submit their single
audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for
obtaining the single audit reporting package, verifying the report meets the single audit requirements, and
assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
DCEO staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to DCEO
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for one subrecipient (with expenditures of
$10,180 in the fiscal year) out of 60 tested (with expenditures of $8,356,958), we noted DCEO did not issue
management decision letters to the subrecipient within the required time frame. The delay in issuing this
management decision was 5 days beyond the required timeframe. Further, we noted DCEO has not
established controls over subrecipient single audit reviews at an adequate level of precision to ensure
management decision letters are issued within required timeframes.
DCEO's subrecipient expenditures under the CRF program for the year ended June 30, 2022 were
$18,502,818. Amounts passed through to subrecipients by the State under the CRF program totaled
$24,432,342.
Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required
to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with DCEO officials, they stated the 5 day delay (which includes two
weekend days and a holiday) in issuing the management decision letter was caused by human error.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-034)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DCEO establish procedures to ensure subrecipient single audit report reviews are
completed and documented in a timely manner. Additionally, DCEO should ensure procedures will permit
issuance of management decisions within required timeframes.
Views of DCEO Officials:
DCEO agrees with the auditor’s recommendation. DCEO has a system and procedures in place to
assist with the compliance of 2 CFR 200.332(d)(3) and 2 CFR 200.521. Unfortunately, due to human
error, the automatic reminder for ensuring issuance of the MDL was missed. At the time, the position
responsible for issuing MDLs was vacant and the unit supervisor was completing those responsibilities in
addition to her other duties. The position responsible for issuing MDLs has since been filled (June 2023)
and DCEO does not expect this issue to repeat as now there is a primary person responsible and a backup
person (the supervisor).
State Agency: Illinois Student Assistance Commission (ISAC)
Federal Agency: U.S. Department of Education (USDE)
Program Name: Federal Family Education Loans – Guaranty Agencies
ALN and Program Expenditures: 84.032G ($2,171,012,437)
Federal Award Numbers: None
Federal Award Year: July 1, 2021 to June 30, 2022
Questioned Costs: None
Compliance Requirement: Reporting
Special Tests and Provisions - All
Finding 2022-002: Inability to Implement Dear Colleague Letter
Type of Finding: Disclaimer of opinion and material weaknessCondition Found:
ISAC was unable to implement all required elements of the Dear Colleague Letter GEN-21-03 for loans
serviced under the Federal Family Education Loans – Guaranty Agencies (FFEL) program due to system
limitations.
On May 12, 2021, USDE issued Dear Colleague Letter (DCL) GEN-21-03, with an update on May 24,
2021 titled “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty
Agencies.” The purpose of DCL GEN-21-03 was to help borrowers burdened by debt during the COVID-
19 emergency. DCL GEN-21-03 had a significant impact on guaranty agency operations, including the
following:
• Interest was required to be retroactively reduced to zero percent back to March 13, 2020 through May
1, 2022.
• Guaranty agencies were not allowed to charge and retain collection cost for loan rehabilitation, and for
those rehabilitations which occurred during the period, the guarantor was required to make adjustments
on the account before it was transferred to the new holder for interest and collection cost charged.
• Guaranty agencies were allowed to charge 2.8% collection cost to borrowers for consolidation loans,
which represented a change from 18.5%, and any previous charges were required to be refunded to the
Direct Loan consolidating servicer to adjust the borrower accounts.
• Guaranty agencies were required to make adjustments to interest and involuntary payments to loans
which defaulted on/after March 13, 2020; these loans were required to be transferred to USDE under
Special Mandatory Assignment.
• Guaranty agencies may transfer funds from the Federal Fund to the Operating Fund without prior
permission from USDE to reimburse themselves for lost revenue and to make refunds to borrowers.
Guaranty agencies who received additional funds from USDE were required to report that activity on
their Annual Report.As a direct result of the requirements established upon issuance of the DCL GEN-21-03, on July 29, 2021,
ISAC notified USDE of its request to terminate its operations as a guaranty agency of the FFEL program.
On September 22, 2021, USDE approved ISAC’s request for termination as a guaranty agency of FFEL,
and also informed ISAC of its decision to designate an unrelated third party to act as the guarantor for the
State of Illinois. Effective May 1, 2022, the FFEL loan portfolio was transitioned to the third party loan
servicer.
Although the loan portfolio was transitioned to a third party to act as guaranty agency, ISAC was
responsible to service the outstanding FFEL loan portfolio and maintain compliance with USDE
requirements through the May 1, 2022 transition date. Through discussions with ISAC officials, given the
limitations of its legacy guaranty system, ISAC was unable to set interest rates for outstanding loans to 0%
as required by the DCL.
Further, given the loan portfolio was transferred to the third party servicer on May 1, 2022, we were unable
to test ISAC’s compliance with requirements that are direct and material to the FFEL program.
The outstanding FFEL loan balance at July 1, 2021 for which ISAC was required to service and maintain
compliance during the State fiscal year ended June 30, 2022 was $2,035,226,000.
Criteria or Requirement:
Dear Colleague Letter GEN-21-03 imposes certain requirements that Guaranty Agencies were to implement
into their operations, including actions on borrower communications, interest rates, involuntary collections,
voluntary payments, collection attempts, loan rehabilitation and eligibility reinstatement, credit reporting,
default aversion and default claims, National Student Loan Data System (NSLDS) reporting, mandatory
assignment, consolidations, order of transactions, reimbursement of lost revenue, and waivers.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure all elements
of the Dear Colleague Letter GEN-21-03 are implemented.
Cause:
In discussing these conditions with ISAC officials, they stated certain requirements of the DCL were not
implemented due to limitations with its legacy guaranty system.
Possible Asserted Effect:
ISAC’s inability to implement all the requirements of the Dear Colleague Letter GEN-21-03 prior to the
transition date results in noncompliance with USDE requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-002)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample. Recommendation:
With the transition of the loan portfolio to a third party guaranty agency, we recommend ISAC work with
USDE to finalize closeout of the FFEL program.
Views of ISAC Officials:
ISAC converted its FFEL loan population to a new guarantor. As part of the conversion, all remedies
required by the DCL were identified and completed either prior to the loans being transferred or once they
were uploaded by the new guarantor. ISAC and the successor guarantor scrubbed the data and the successor
guarantor ensured that on May 1, 2022 all balances were correct. The US Department of Education was
involved in all the bi-weekly meetings with ISAC and the successor guarantor and upon conversion agreed
that all steps were correctly handled.
The final federal reporting was completed and all reconciliations accepted by the US Department of
Education as of May 11, 2023. ISAC received the approval to transfer close the federal fund back and
transfer the balance to the US Treasury to officially exit the FFEL program. No further action was required.
State Agency: Illinois Department of Revenue (IDOR)
Federal Agency: U.S. Department of Treasury (Treasury)
Program Name: COVID-19 – Homeowner Assistance Fund
ALN and Program Expenditures: 21.026 ($209,795,189)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Cash Management
Finding 2022-003: Failure to Monitor Subrecipient Cash Draws
Type of Finding: Adverse opinion and material weaknessCondition Found:
IDOR passed through most of the advance drawn funds to its subrecipient while reporting no activity had
occurred for the COVID–19 – Homeowner Assistance Fund (HAF) program in the special report prepared
during fiscal year 2022.
The State designated IDOR as the State agency responsible for fiscal activities of the COVID-19 – HAF
program. IDOR passed funding through to the Illinois Housing Development Authority (IHDA) (a
component unit of the State) who works directly with program beneficiaries (eligible homeowners or
subrecipients).
During our audit procedures, we noted the State received $211,309,688 of COVID-19 – HAF program
funding from the U.S. Treasury in January 2022. At the time of the January 2022 cash receipt, we noted
IDOR had passed through $32,886,765 to IHDA. During our review of subrecipient payments (totaling
$209,795,189) made to IHDA during the year ended June 30, 2022, we noted IHDA had only reported
expenditures of $6,901,019 during the year ended June 30, 2022. Accordingly, IDOR had provided HAF
program advances totaling $202,894,170 during the year ended June 30, 2022. IDOR did not have
procedures in place to monitor whether IHDA had incurred or would be incurring program expenditures
to minimize federal cash on hand.
Additionally, the State prepared and submitted a one-time special report (Interim Report 1505-0269)
that covered the reporting period beginning on the date of the COVID-19 – HAF program award (May
3, 2021) through January 31, 2022. The key line items in the special report included the following:
• Number of unique Homeowners that received HAF assistance and subset(s) that are classified as
Socially Disadvantaged and 100 percent Area Median Income (AMI) or less
• Homeowners that received HAF assistance disaggregated by Program Design Element
• Amount of assistance provided to Homeowners disaggregated by Program Design Element
During our testing of the COVID-19 – HAF program special report, we noted the State did not report
activity data for any of the key line items.
Total subrecipient expenditures for the HAF program administered by the State were $209,795,189
during the year end June 30, 2022.Criteria or Requirement:
Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time
elapsing between the transfer of federal funds to the subrecipient and their disbursement for program
purposes is minimized as required by the applicable cash management requirements in the federal
award to the recipient (2 CFR section 200.305(b)(1)).
In addition, 2 CFR 200.303 requires non-federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations,
and program compliance requirements. Effective internal controls should include establishing
procedures to minimize the time elapsing between the transfer of funds to subrecipients and the
subrecipient’s actual cash outlay for program costs.
Cause:
The State’s relationship with IHDA is a multi-agency initiative. IDOR’s role has historically been
statutorily limited to funding agent. This role does not include expenditure monitoring or reporting
responsibilities. There was confusion in fiscal year 2022 regarding which state agency would perform
these tasks for the COVID grant money awarded to IHDA.
Possible Asserted Effect:
Failure to monitor whether subrecipients minimize the time between the receipt of federal funds and
expenditure for program purposes may result in advance funding in excess of immediate cash needs.
Additionally, failure to properly report program activities in required special reports inhibits the U.S.
Treasury from properly monitoring program activities and progress.
Repeat Finding:
A similar finding was not reported in a prior year audit. (Finding Code No. 2022-003)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOR implement procedures to monitor subrecipients to ensure funds are requested
only for expenditures which have been incurred or will be incurred within a reasonable time period to
minimize federal cash on hand. Additionally, the State should implement procedures to ensure the
COVID-19 – HAF program special report completely and accurately describes required program
activities.
Views of IDOR Officials:
The IHDA Act was updated to allow IDOR to disburse COVID money. However, the language for
the tasks to be performed by the funding agent was left unchanged. This ambiguity along with the
reporting IHDA does to other agencies contributed to confusion regarding which agency was
responsible for the grant expenditure monitoring and reporting. IDOR pursued legislative
clarification. This resulted in the decision to transition the funding agent role to DHS.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of the Treasury (Treasury)
Program Name: COVID-19 – Homeowner Assistance Fund
ALN and Program Expenditures: 21.026 ($209,795,189)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-004: Failure to Establish Subrecipient Monitoring Procedures
Type of Finding: Adverse opinion and material weaknessCondition Found:
IDHS did not perform a risk assessment or subrecipient monitoring procedures for the subrecipient of the
COVID-19 – Homeowner Assistance Fund (HAF) program for the year ended June 30, 2022.
The State designated IDHS as the State agency responsible for monitoring of the HAF program
subrecipient, Illinois Housing Development Authority (IHDA), a discretely presented component unit of
the State.
As a pass-through entity, IDHS was responsible for:
• Identifying the award and applicable requirements,
• Evaluating IHDA’s risk of noncompliance for purposes of determining the appropriate monitoring
procedures related to the subaward,
• Monitoring the activities of IHDA as necessary to ensure the subaward is used for authorized purposes,
IHDA complies with the terms and conditions of the subaward, and IHDA achieves performance goals,
and
• Issuing a management decision for audit findings pertaining to the federal award provided to IHDA, if
applicable.
During our testing, we noted IDHS did not perform any subrecipient monitoring procedures over IHDA
with respect to the HAF program during the year ended June 30, 2022. Amounts passed through to IHDA
totaled $209,795,189 for the year ended June 30, 2022.
Criteria or Requirement:
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of
subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance
with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are
achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicableaudit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4)
requires pass through entities to resolve audit findings through corrective action plans (CAP).
In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include establishing and performing
monitoring procedures in accordance with Uniform Guidance and program requirements.
Cause:
In discussing these conditions with IDHS officials, management stated this program is administered in
collaboration with the Illinois Department of Revenue, the Illinois Emergency Management Agency
(IEMA), the Governor’s Office of Management and Budget, and the Illinois Housing Development
Authority (a component unit of the State). Delays encountered in launching the program resulted in a delay
in executing interagency agreements to establish roles and responsibilities for the program.
Possible Asserted Effect:
Failure to perform required risk assessments and to adequately monitor subrecipients may result in the
subrecipient not properly administering the federal program in accordance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-004)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS implement subrecipient monitoring procedures in accordance with federal
regulations.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS has subrecipient monitoring procedures and has kicked off
subrecipient monitoring with IHDA on the Homeowners Assistance Fund program.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: SNAP Cluster
Temporary Assistance for Needy Families
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
93.558 ($606,030,110)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility, Special Tests and Provisions – Child Support Non-
Cooperation, Special Tests and Provisions – Penalty for Refusal to Work,
and Special Tests and Provisions – ADP System for SNAP
Finding 2022-005: Missing Documentation in Beneficiary Files
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS could not locate case file documentation supporting eligibility determinations and special test
requirements for beneficiaries of the SNAP Cluster and/or Temporary Assistance for Needy Families
(TANF) program.
Details of the beneficiary payments selected in our samples for the SNAP and TANF programs are as
follows: During our test work, we selected eligibility files to review for compliance with eligibility requirements of
the related benefits provided. Specifically, in 1 of 50 TANF/SNAP cases (with a payment sampled of
$239), IDHS did not obtain the beneficiary’s assignment of rights to the State. TANF cash assistance paid
to this beneficiary during the year ended June 30, 2022 was $2,656.
During our test work, we also selected Child Support Non-Cooperation (Non-Cooperation) files to review
for compliance with the respective special tests and provisions. We noted in 6 of 40 TANF Non-
Cooperation special test cases, IDHS could not provide evidence that notice for good cause non-cooperation
was obtained, or subsequent timely action on the case was taken once the case was determined noncooperating.
TANF cash assistance paid to these beneficiaries during the year ended June 30, 2022 totaled
$40,670. During our test work, we also selected Penalty for Refusal to Work (Refusal to Work) files to review for
compliance with the respective special tests and provisions. We noted in 9 of 40 TANF Refusal to Work
cases, IDHS could not provide evidence that a responsibility service plan (RSP) was obtained and signed
by the beneficiary. Further we noted that the control to ensure the RSPs are collected (i.e. completeness) in
accordance with policy is not effectively designed. TANF cash assistance paid to these beneficiaries during
the year ended June 30, 2022 totaled $33,881.
Criteria or Requirement:
According to 42 USC 602(a)(1)(B)(iii) (the State Plan for TANF/SNAP), IDHS is required to determine
client eligibility in accordance with eligibility requirements defined in the approved State Plans. The TANF
State Plan amended April 1, 2020, Section L Personal Responsibility, requires all adults and minor parents
applying for or receiving assistance with be required to sign a Responsibility and Services Plan (RSP) and
follow through with its provisions. TANF/SNAP State Plan also required an application to be completed
to apply for assistance.
For non-cooperation, if an individual is not cooperating with the state establishing paternity or enforcing a
support order with respect to a child of the individual, the state much apply a sanction or deny assistance
(45 CFR sections 264.30).
For refusal to work, the State must reduce or terminate the assistance payable to the family if an individual
in a family receiving assistance refuses to work, subject to any good cause or other exemptions established
by the State (42 USC 609(a)(14); 45 CFR sections 261.14, 261.16, and 261.54).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include maintaining adequate controls
over beneficiary eligibility case files to ensure all required documentation is received and appropriate
sanctions applied.
Cause:
In discussing these conditions with IDHS officials, management stated that the exceptions noted were due
to oversight to secure or upload supporting documentation adequately and to follow up on notices of noncooperation
or good cause for refusal to work.
Possible Asserted Effect:
Failure to maintain RSPs, applications, or other eligibility documentation may result in inadequate
documentation of a recipient’s eligibility and in federal funds being awarded to ineligible beneficiaries.
Payments beyond the eligibility period can result in unallowable costs. Inability to demonstrate if a sanction
has been appropriately applied also may result in federal funds being awarded to an ineligible beneficiary.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-011. (Finding Code 2022-005,
2021-011, 2020-010, 2019-005, 2018-004, 2017-004, 2016-004, 2015-004, 2014-004, 2013-004, 12-04,
11-04, 10-06, 09-06, 08-08, 07-19, 06-16, 05-30, 04-18, 03-20, 02-26, 01-15) Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its current process for collecting and maintaining TANF/SNAP eligibility
support and documentation to support the appropriate TANF application of sanctions.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure support for all eligibility items are properly
retained in the record.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Matching, Level of Effort, Earmarking
Finding 2022-006: Failure to Provide Adequate Documentation for the SAPT MOE Requirement
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS was unable to provide adequate documentation to substantiate the maintenance of effort (MOE)
requirements were met for the Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
program for award year 2020 that closed during State fiscal year 2022.
As a condition of receiving federal funding under the SAPT program, USDHHS requires the State to
maintain the level of State and locally funded expenditures for substance abuse prevention and treatment
activities at an amount that is at least equal to the average level of these same amounts for the prior two
years.
During the current fiscal year, we noted IDHS was required to maintain aggregate State expenditures for
State fiscal year June 30, 2020 (SFY20) of $128,854,228. IDHS reported actual aggregate State
expenditures for State fiscal year June 30, 2020 of $159,761,708. However, included in the total MOE
reported expenditures were $94,207,294 of managed care organization (MCO) billings in SFY20. The
MCO billings represented MCO encounter data amounts, and IDHS could not provide evidence or reconcile
MCO encounter data to actual State paid expenditures. Accordingly, these expenditures are not allowable
for purposes of meeting the maintenance of effort requirement. IDHS appears to be approximately $63
million short of the $129 million MOE requirement.
Criteria or Requirement:
According to 45 CFR 96.30(a), the fiscal control and accounting procedures of the State must be sufficient
to permit tracing funds to a level of expenditure adequate to establish that such funds have not been used
in violation of the restrictions and prohibitions of the statute authorizing the block grant. Further, 45 CFR
96.134(a) states with respect to the principal agency of a State for carrying out authorized activities, the
agency shall for each fiscal year maintain aggregate State expenditures by the principal agency for
authorized activities at a level that is not less than the average level of such expenditures maintained by the
State for the two-year period preceding the fiscal year for which the State is applying for the grant.
In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain
internal control designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include establishing procedures to ensure MOE
requirements are achieved with allowable expenditures.Cause:
In discussing these conditions with IDHS officials, management stated IDHS believed its methodology was
compliant and was awaiting a decision from USDHHS on this matter.
Possible Asserted Effect:
Failure to maintain required State expenditure levels for MOE and maintain adequate supporting
documentation to support expenditures used to meet the MOE requirements results in noncompliance with
program requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-012. (Finding Code 2022-
006, 2021-012, 2020-012, 2019-009, 2018-007, 2017-008, 2016-008, 2015-009, 2014-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its process for identifying allowable expenditures to achieve the SAPT MOE,
including receiving input from the Substance Abuse and Mental Health Services Administration
(SAMHSA) regarding the applicability of MCO encounter data expenditures.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS received confirmation on November 8, 2023, that they may not
continue to use Encounter Data to meet the MOE requirement unless they can demonstrate that they can
trace the use of those funds to the level of expenditure and ensure the use of those funds do not violate the
restrictions and prohibitions of the statute authorizing the block grant. IDHS will seek SAMHSA approval
of an alternate MOE methodology that does not include encounter data. IDHS will confirm the process for
amending previous MOE numbers reported and submit any required waivers to SAMHSA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Matching, Level of Effort, Earmarking
Finding 2022-006: Failure to Provide Adequate Documentation for the SAPT MOE Requirement
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS was unable to provide adequate documentation to substantiate the maintenance of effort (MOE)
requirements were met for the Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
program for award year 2020 that closed during State fiscal year 2022.
As a condition of receiving federal funding under the SAPT program, USDHHS requires the State to
maintain the level of State and locally funded expenditures for substance abuse prevention and treatment
activities at an amount that is at least equal to the average level of these same amounts for the prior two
years.
During the current fiscal year, we noted IDHS was required to maintain aggregate State expenditures for
State fiscal year June 30, 2020 (SFY20) of $128,854,228. IDHS reported actual aggregate State
expenditures for State fiscal year June 30, 2020 of $159,761,708. However, included in the total MOE
reported expenditures were $94,207,294 of managed care organization (MCO) billings in SFY20. The
MCO billings represented MCO encounter data amounts, and IDHS could not provide evidence or reconcile
MCO encounter data to actual State paid expenditures. Accordingly, these expenditures are not allowable
for purposes of meeting the maintenance of effort requirement. IDHS appears to be approximately $63
million short of the $129 million MOE requirement.
Criteria or Requirement:
According to 45 CFR 96.30(a), the fiscal control and accounting procedures of the State must be sufficient
to permit tracing funds to a level of expenditure adequate to establish that such funds have not been used
in violation of the restrictions and prohibitions of the statute authorizing the block grant. Further, 45 CFR
96.134(a) states with respect to the principal agency of a State for carrying out authorized activities, the
agency shall for each fiscal year maintain aggregate State expenditures by the principal agency for
authorized activities at a level that is not less than the average level of such expenditures maintained by the
State for the two-year period preceding the fiscal year for which the State is applying for the grant.
In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain
internal control designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include establishing procedures to ensure MOE
requirements are achieved with allowable expenditures.Cause:
In discussing these conditions with IDHS officials, management stated IDHS believed its methodology was
compliant and was awaiting a decision from USDHHS on this matter.
Possible Asserted Effect:
Failure to maintain required State expenditure levels for MOE and maintain adequate supporting
documentation to support expenditures used to meet the MOE requirements results in noncompliance with
program requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-012. (Finding Code 2022-
006, 2021-012, 2020-012, 2019-009, 2018-007, 2017-008, 2016-008, 2015-009, 2014-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review its process for identifying allowable expenditures to achieve the SAPT MOE,
including receiving input from the Substance Abuse and Mental Health Services Administration
(SAMHSA) regarding the applicability of MCO encounter data expenditures.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS received confirmation on November 8, 2023, that they may not
continue to use Encounter Data to meet the MOE requirement unless they can demonstrate that they can
trace the use of those funds to the level of expenditure and ensure the use of those funds do not violate the
restrictions and prohibitions of the statute authorizing the block grant. IDHS will seek SAMHSA approval
of an alternate MOE methodology that does not include encounter data. IDHS will confirm the process for
amending previous MOE numbers reported and submit any required waivers to SAMHSA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-007: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF),
CCDF Cluster (Child Care), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT)
programs.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers During our testing, we noted that IDHS did not establish control procedures to submit FFATA reports for
all subawards as required by federal regulations. During our testwork of 59 subawards and 78 amendments,
we noted the following exceptions: IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDHS officials, management stated the exceptions noted are due to
inaccuracies in the manual entry of subawards, and not all awards were being identified through the existing information process flow. The Division of Substance Use, Prevention, and Recovery (SUPR) stated that
there was not adequate staff for reporting and a misunderstanding of how often reporting was required.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding numbers 2021-014 and 2021-015. (Finding
Code 2022-007, 2021-014, 2021-015)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with the FFATA.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS is continuing to establish automated procedures to identify all
awards that are subject to FFATA reporting requirements and to report required subaward information in
accordance with the FFATA.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Temporary Assistance for Needy Families Cluster
CCDF Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.558 ($585,590,187)
93.575/93.596 ($910,712,554)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-008: Failure to Follow Established Program Subrecipient Monitoring Procedures
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not follow its established program monitoring policies and procedures for subrecipients of the
Temporary Assistance for Needy Families (TANF) Cluster, CCDF Cluster (Child Care), and Block Grants
for Prevention and Treatment of Substance Abuse (SAPT) programs.
IDHS has implemented procedures whereby program staff perform periodic program on-site and desk
reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered
by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the
review results to the subrecipient summarizing the procedures performed, results of the procedures, and
any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond
to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform
reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are
subject to the review and approval of a supervisor.
During our test work over program on-site review procedures performed for 59 subrecipients of the TANF
Cluster, CCDF Cluster, and SAPT programs, we noted IDHS did not follow its established program
monitoring procedures as follows: IDHS did not provide timely notification (within 60 days) of the results of the programmatic onsite
reviews. We noted the following exceptions: IDHS did not complete their quality review on a timely basis (within 60 days). We noted the
following exceptions: Additionally, for 1 of 28 SAPT subrecipient expenditures sampled, IDHS could not provide
supporting documentation that reconciled to the sampled amount. IDHS’s subrecipient expenditures under the federal programs for the year ended June 30, 2022 were
approximately as follows: Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients
as necessary to ensure that federal awards are used for authorized purposes in compliance with laws,
regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.
According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of
noncompliance for purposes of determining the appropriate subrecipient monitoring related to the
subaward.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring on-site program
procedures and expenditure reviews are performed in a timely manner and adequate documentation is
maintained. Cause:
In discussing these conditions with IDHS officials, management stated that the program monitoring
deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate
staffing, and lack of consistent application in each program division.
Possible Asserted Effect:
Failure to adequately perform and document program on-site monitoring reviews of subrecipients and
notify subrecipients of findings in a timely manner may result in subrecipients not properly administering
the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly
review subrecipient expenditures may result in inaccurate payments or unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-017. (Finding Code 2022-
008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-
07, 11-09)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and
documented for subrecipients in accordance with established policies and procedures. In addition, we
recommend IDHS review its process for reporting and following up on program findings relative to
subrecipient on-site reviews to ensure timely corrective action and quality control is taken.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will seek to ensure programmatic monitoring reviews are
performed and accurately documented for subrecipients in accordance with established policies and
procedures.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: CCDF Cluster
ALN and Program Expenditures: 93.575/93.596 ($941,280,574)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $7,699,780
Compliance Requirement: Special Tests and Provisions – Child Care Provider Eligibility for
American Rescue Plan Act Stabilization Funds
Finding 2022-009: Failure to Obtain Required Certifications for Child Care Providers Receiving
American Rescue Plan Act Stabilization Funds
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not obtain the required certifications at the time of application for certain providers of the CCDF
(Child Care) Cluster receiving American Rescue Plan (ARP) Act stabilization funds.
Child care providers must provide the following certifications to receive ARP Act stabilization funding
under the Child Care Cluster:
1. The provider will, when open and providing services, implement policies in line with guidance and
orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent
possible, implement policies in line with guidance from the Centers for Disease Control (CDC).
2. For each employee, the provider must pay at least the same amount in weekly wages and maintain the
same benefits for the duration of stabilization funding.
3. The provider will provide relief from copayments and tuition payments for families enrolled in the
provider’s program, to the extent possible, and prioritize such relief for families struggling to make
either type of payment.
During our test work over 40 child care providers receiving ARP Act stabilization funds (totaling
$545,843,265), we noted IDHS could not provide the required certifications for ARP Act stabilization funds
for 39 providers who are noted as ‘license-exempt’ providers by IDHS. Upon further review, we noted
IDHS did not obtain certifications for any ‘license-exempt’ providers. Child Care ARP Act Stabilization
funds passed through to license-exempt providers totaled $7,699,780 during the year ended June 30, 2022.
IDHS passed through a total of $553,500,145 of Child Care ARP Act stabilization funds for the year ended
June 30, 2022.
Criteria or Requirement:
ARP Act Section 2202(d)(2)(D) requires the State to make available on its website an application for
qualified child care providers that includes the certifications above.
Additionally, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring child care providers
who receive ARP Act stabilization funds meet the eligibility criteria and provide all required certifications
at the time of application.
Cause:
In discussing these conditions with IDHS officials, management stated the reason certifications /attestations
were not collected for these providers was because they are License-Exempt Family Child Care providers
who receive scheduled health and safety monitoring and procedures were not established to obtain
certifications from child care providers receiving ARP Act stabilization funds.
Possible Asserted Effect:
Failure to obtain required certifications for child care providers receiving ARP Act stabilization funds may
result in inadequate documentation of a provider’s eligibility under ARP Act and in federal funds being
awarded to ineligible providers.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures for verifying provider eligibility under ARP Act Stabilization
funds, including ensuring all child care providers provide the required certifications.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures for verifying provider eligibility under
ARP Act Stabilization funds, including ensuring all Child Care providers provide the required certifications.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: CCDF Cluster
ALN and Program Expenditures: 93.575/93.596 ($941,280,574)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $7,699,780
Compliance Requirement: Special Tests and Provisions – Child Care Provider Eligibility for
American Rescue Plan Act Stabilization Funds
Finding 2022-009: Failure to Obtain Required Certifications for Child Care Providers Receiving
American Rescue Plan Act Stabilization Funds
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not obtain the required certifications at the time of application for certain providers of the CCDF
(Child Care) Cluster receiving American Rescue Plan (ARP) Act stabilization funds.
Child care providers must provide the following certifications to receive ARP Act stabilization funding
under the Child Care Cluster:
1. The provider will, when open and providing services, implement policies in line with guidance and
orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent
possible, implement policies in line with guidance from the Centers for Disease Control (CDC).
2. For each employee, the provider must pay at least the same amount in weekly wages and maintain the
same benefits for the duration of stabilization funding.
3. The provider will provide relief from copayments and tuition payments for families enrolled in the
provider’s program, to the extent possible, and prioritize such relief for families struggling to make
either type of payment.
During our test work over 40 child care providers receiving ARP Act stabilization funds (totaling
$545,843,265), we noted IDHS could not provide the required certifications for ARP Act stabilization funds
for 39 providers who are noted as ‘license-exempt’ providers by IDHS. Upon further review, we noted
IDHS did not obtain certifications for any ‘license-exempt’ providers. Child Care ARP Act Stabilization
funds passed through to license-exempt providers totaled $7,699,780 during the year ended June 30, 2022.
IDHS passed through a total of $553,500,145 of Child Care ARP Act stabilization funds for the year ended
June 30, 2022.
Criteria or Requirement:
ARP Act Section 2202(d)(2)(D) requires the State to make available on its website an application for
qualified child care providers that includes the certifications above.
Additionally, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring child care providers
who receive ARP Act stabilization funds meet the eligibility criteria and provide all required certifications
at the time of application.
Cause:
In discussing these conditions with IDHS officials, management stated the reason certifications /attestations
were not collected for these providers was because they are License-Exempt Family Child Care providers
who receive scheduled health and safety monitoring and procedures were not established to obtain
certifications from child care providers receiving ARP Act stabilization funds.
Possible Asserted Effect:
Failure to obtain required certifications for child care providers receiving ARP Act stabilization funds may
result in inadequate documentation of a provider’s eligibility under ARP Act and in federal funds being
awarded to ineligible providers.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures for verifying provider eligibility under ARP Act Stabilization
funds, including ensuring all child care providers provide the required certifications.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures for verifying provider eligibility under
ARP Act Stabilization funds, including ensuring all Child Care providers provide the required certifications.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: CCDF Cluster
ALN and Program Expenditures: 93.575/93.596 ($941,280,574)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $7,699,780
Compliance Requirement: Special Tests and Provisions – Child Care Provider Eligibility for
American Rescue Plan Act Stabilization Funds
Finding 2022-009: Failure to Obtain Required Certifications for Child Care Providers Receiving
American Rescue Plan Act Stabilization Funds
Type of Finding: Material noncompliance and material weakness Condition Found:
IDHS did not obtain the required certifications at the time of application for certain providers of the CCDF
(Child Care) Cluster receiving American Rescue Plan (ARP) Act stabilization funds.
Child care providers must provide the following certifications to receive ARP Act stabilization funding
under the Child Care Cluster:
1. The provider will, when open and providing services, implement policies in line with guidance and
orders from corresponding state, territorial, tribal, and local authorities and, to the greatest extent
possible, implement policies in line with guidance from the Centers for Disease Control (CDC).
2. For each employee, the provider must pay at least the same amount in weekly wages and maintain the
same benefits for the duration of stabilization funding.
3. The provider will provide relief from copayments and tuition payments for families enrolled in the
provider’s program, to the extent possible, and prioritize such relief for families struggling to make
either type of payment.
During our test work over 40 child care providers receiving ARP Act stabilization funds (totaling
$545,843,265), we noted IDHS could not provide the required certifications for ARP Act stabilization funds
for 39 providers who are noted as ‘license-exempt’ providers by IDHS. Upon further review, we noted
IDHS did not obtain certifications for any ‘license-exempt’ providers. Child Care ARP Act Stabilization
funds passed through to license-exempt providers totaled $7,699,780 during the year ended June 30, 2022.
IDHS passed through a total of $553,500,145 of Child Care ARP Act stabilization funds for the year ended
June 30, 2022.
Criteria or Requirement:
ARP Act Section 2202(d)(2)(D) requires the State to make available on its website an application for
qualified child care providers that includes the certifications above.
Additionally, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include ensuring child care providers
who receive ARP Act stabilization funds meet the eligibility criteria and provide all required certifications
at the time of application.
Cause:
In discussing these conditions with IDHS officials, management stated the reason certifications /attestations
were not collected for these providers was because they are License-Exempt Family Child Care providers
who receive scheduled health and safety monitoring and procedures were not established to obtain
certifications from child care providers receiving ARP Act stabilization funds.
Possible Asserted Effect:
Failure to obtain required certifications for child care providers receiving ARP Act stabilization funds may
result in inadequate documentation of a provider’s eligibility under ARP Act and in federal funds being
awarded to ineligible providers.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures for verifying provider eligibility under ARP Act Stabilization
funds, including ensuring all child care providers provide the required certifications.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures for verifying provider eligibility under
ARP Act Stabilization funds, including ensuring all Child Care providers provide the required certifications.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S Department of Agriculture (USDA)
U.S. Department of Health and Human Services (USDHHS)
Program Name: Supplemental Nutrition Assistance Program Cluster
Coronavirus State and Local Fiscal Recovery Funds
Temporary Assistance for Needy Families Cluster
CCDF Cluster
Medicaid Cluster
Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 10.551/10.561 ($5,801,570,781)
21.027 ($4,895,262,395)
93.558 ($606,030,110)
93.575/93.596 ($941,280,574)
93.775/93.777/93.778 ($18,817,832,850)
93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: None
Finding 2022-010: Inaccurate Reporting of Federal Expenditures
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under
the Supplemental Nutrition Assistance (SNAP) Cluster, Coronavirus State and Local Fiscal Recovery
Funds (SLFRF), Temporary Assistance for Needy Families (TANF) Cluster, Child Care Development
Funds (CCC) Cluster, Medicaid Cluster, and Block Grants for Prevention and Treatment of Substance
Abuse (SAPT) programs.
Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of
Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did
not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences
between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program
for the year ended June 30, 2022: Additionally, the following differences were identified relative to amounts provided to subrecipients for
the following major programs: Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included
accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were
used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2022, were
erroneously reported as cash basis expenditures for the year ended June 30, 2022: Additionally, we noted in January 2023 IDHS discovered expenditures under its Home and Community
Based Services (HCBS) waiver program had not been reported to the Illinois Department of Healthcare and
Family Services (DHFS) for claiming under the Medicaid Cluster program since January 1, 2021. As a
result, DHFS did not report expenditures totaling $508,822,206 paid by the State during the year ended
June 30, 2022 on quarterly financial reports submitted to USDHHS. On July 31, 2023 the State provided a
revised SEFA for the year ended June 30, 2022 which included a correction to add the previously unreported
$508,822,206 of Medicaid Cluster HCBS expenditures. The addition of these expenditures delayed the
completion of the State’s 2022 single audit.
Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level
of precision to ensure complete and accurate reporting in a timely manner.
Criteria or Requirement:
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among
other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to
subrecipients from each Federal program.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure federal
expenditures are accurately reported on the SEFA and to other State agencies, where applicable.
Cause:
In discussing these conditions with IDHS officials, management stated that differences in the amounts of
federal expenditures and amounts passed through to subrecipients were due to the Department’s conversion
to a new financial accounting system, which included creation of new database queries and reports derived
from the new financial system data sources that were used for financial reporting.
Possible Asserted Effect:
Failure to accurately report federal expenditures prohibits the completion of an audit in accordance with
the Uniform Guidance which may result in the suspension of federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-010)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS establish procedures to accurately report federal expenditures (including
subrecipient expenditures) used to prepare the SEFA to the IOC.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will establish procedures to accurately report federal
expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC as required.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-011: Inaccurate Financial Report for the SAPT program
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not prepare an accurate financial report for the Block Grants for Prevention and Treatment of
Substance Abuse (SAPT) program.
IDHS is required to prepare a federal financial report (SF-425) for the SAPT program on an annual basis.
During our testwork over the SF-425 report for the federal fiscal year ending September 30, 2021, we noted
IDHS inaccurately reported the following items: Additionally, in considering the reporting process for the SF-425 report, we noted IDHS does not perform
analytical or other procedures during the report preparation process to ensure amounts reported are
reasonable in relation to previously reported information or expectations relative to current program
activities.
Criteria or Requirement:
According to 45 CFR 96.30(a), the State’s fiscal control and accounting procedures must be sufficient to
permit preparation of reports required by the statute authorizing the block grant. In addition, 2 CFR 200.303
requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to
reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.
Effective internal controls should include procedures to ensure expenditures are accurately reported in the
federal financial report.
Cause:
In discussing these conditions with IDHS officials, management stated that the inaccurate financial
reporting for the SAPT Block Grant (Substance Abuse and Treatment) was due to refunds being recorded
in the wrong grant fiscal year. Possible Asserted Effect:
Failure to accurately prepare financial reports prevents the USDHHS from effectively monitoring the SAPT
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-011)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review the process and procedures in place to prepare financial reports required for
the SAPT program and implement procedures necessary to ensure the reports are accurate.
Views of IDHS Officials:
IDHS accepts the recommendation. The process and procedures to prepare financial reports required for
the SAPT program will be reviewed. Necessary steps will be added to ensure that the financial reports are
accurate and that refunds received from SAPT providers have been applied to the correct grant fiscal
year/grant.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Block Grants for Prevention and Treatment of Substance Abuse
ALN and Program Expenditures: 93.959 ($81,408,580)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-011: Inaccurate Financial Report for the SAPT program
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not prepare an accurate financial report for the Block Grants for Prevention and Treatment of
Substance Abuse (SAPT) program.
IDHS is required to prepare a federal financial report (SF-425) for the SAPT program on an annual basis.
During our testwork over the SF-425 report for the federal fiscal year ending September 30, 2021, we noted
IDHS inaccurately reported the following items: Additionally, in considering the reporting process for the SF-425 report, we noted IDHS does not perform
analytical or other procedures during the report preparation process to ensure amounts reported are
reasonable in relation to previously reported information or expectations relative to current program
activities.
Criteria or Requirement:
According to 45 CFR 96.30(a), the State’s fiscal control and accounting procedures must be sufficient to
permit preparation of reports required by the statute authorizing the block grant. In addition, 2 CFR 200.303
requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to
reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.
Effective internal controls should include procedures to ensure expenditures are accurately reported in the
federal financial report.
Cause:
In discussing these conditions with IDHS officials, management stated that the inaccurate financial
reporting for the SAPT Block Grant (Substance Abuse and Treatment) was due to refunds being recorded
in the wrong grant fiscal year. Possible Asserted Effect:
Failure to accurately prepare financial reports prevents the USDHHS from effectively monitoring the SAPT
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-011)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS review the process and procedures in place to prepare financial reports required for
the SAPT program and implement procedures necessary to ensure the reports are accurate.
Views of IDHS Officials:
IDHS accepts the recommendation. The process and procedures to prepare financial reports required for
the SAPT program will be reviewed. Necessary steps will be added to ensure that the financial reports are
accurate and that refunds received from SAPT providers have been applied to the correct grant fiscal
year/grant.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.027 ($4,895,262,395)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-012: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not communicate required federal program information to subrecipients at the time of
disbursement for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program.
During our testing of 43 SLFRF subrecipient payments, we noted IDHS did not communicate the
Assistance Listing Number (ALN) at the time of disbursement for 15 of the subrecipients tested.
Amounts passed through to subrecipients by IDHS under the SLFRF program totaled $60,364,704 during
the year ended June 30, 2022. Amounts passed through to subrecipients by the State under the SLFRF
program totaled $336,176,469 during the year ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDHS officials, management stated some staff were not aware of the
requirement to notify subrecipients of ALNs at the time of disbursement.
Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-012)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS add to their warrant description the ALN for each disbursement made to
subrecipients.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure that the description of the Assistance Listing
Numbers (ALN) is properly communicated to subrecipients at the time of disbursement.
State Agency: Illinois Department of Human Services (IDHS)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.027 ($4,895,262,395)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-012: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDHS did not communicate required federal program information to subrecipients at the time of
disbursement for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program.
During our testing of 43 SLFRF subrecipient payments, we noted IDHS did not communicate the
Assistance Listing Number (ALN) at the time of disbursement for 15 of the subrecipients tested.
Amounts passed through to subrecipients by IDHS under the SLFRF program totaled $60,364,704 during
the year ended June 30, 2022. Amounts passed through to subrecipients by the State under the SLFRF
program totaled $336,176,469 during the year ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDHS officials, management stated some staff were not aware of the
requirement to notify subrecipients of ALNs at the time of disbursement.
Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement can hamper the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-012)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDHS add to their warrant description the ALN for each disbursement made to
subrecipients.
Views of IDHS Officials:
IDHS accepts the recommendation. IDHS will work to ensure that the description of the Assistance Listing
Numbers (ALN) is properly communicated to subrecipients at the time of disbursement.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Managed Care Financial Audit
Finding 2022-013: Failure to Perform Periodic Audits of Encounter Data
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter
and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the
Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs.
During our testing, we noted DHFS did not conduct or contract for an independent audit of the accuracy,
truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each its
MCOs with contracts starting on or after July 1, 2017, during fiscal year 2022 or in the past three years.
Accordingly, no audit results were available to be posted on DHFS’ website.
Additionally, we noted DHFS has not established internal control procedures to ensure the encounter data
audits are performed and posted as required.
Criteria or Requirement:
Per 42 CFR 438.602(e), the State must periodically, but no less frequently than once every 3 years,
conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and
completeness of the encounter and financial data submitted by, or on behalf of, each MCO, Prepaid
Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). Additionally, per 42 CFR
438.602(g), the State must post on its website the results of any audits under 42 CFR 438.602(e).
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include implementing procedures to
perform periodic audits of encounter and financial data submitted by, or on behalf of each of its MCOs. Cause:
In discussing these conditions with DHFS officials, they stated that although the contracts with each MCO
were amended to include independent periodic audits of encounter data, no audits have been completed
to-date.
Possible Asserted Effect:
Failure to perform periodic audits of encounter data submitted by, or on behalf of each of its MCOs may
result in inaccurate capitation rate setting for the respective MCOs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-009. (Finding Code 2022-
013, 2021-009)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS implement procedures to perform periodic audits of encounter and financial data
submitted by, or on behalf of each of its MCOs. Additionally, information should be made publicly available
as required.
Views of DHFS Officials:
The Department accepts the recommendation. The Department has a robust encounter utilization
management (EUM) process that is managed by our consulting actuary, Milliman. The Department has also
contracted with its external quality review organization (EQRO) to audit the MCOs encounter data. The
EQRO completed and submitted the draft EDV report to the Department on June 15, 2023. The report is
currently pending review and approval by the Department. The Department will proceed with posting the
final report as required once it has been reviewed and approved by all internal reviewing entities. The
Department is working toward having the final, approved report posted on the Program web page no later
than August 31, 2023.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-014: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely
Manner
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS did not report certain Medicaid Cluster program expenditures on quarterly federal financial (CMS-
64) reports in a timely manner.
DHFS is the State Medicaid agency and is responsible for determining whether payments made to
providers were for permissible services on behalf of eligible beneficiaries. The Illinois Department of
Human Services (IDHS) is responsible for determining the eligibility of certain Medicaid Cluster
beneficiaries and for administering certain Medicaid waiver programs, including certain Home and
Community Based Services provided by the State.
In January 2023, DHFS and IDHS discovered expenditures under the Home and Community Based
Services waiver program operated by IDHS had not been claimed since January 1, 2021. As a result,
DHFS had not reported expenditures totaling $508,822,205 paid by the State during the year ended June
30, 2022 on any of the quarterly reports filed for this period. Specifically, we noted the following
expenditure amounts were not reported timely: On July 31, 2023, the State provided a revised Schedule of Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which included a correction to add the previously unreported $508,822,205
of Medicaid Cluster Home and Community Based Services expenditures. The addition of these
expenditures delayed the completion of the State’s single audit. Additionally, we noted the supervisory review and analytical procedures performed over the quarterly
CMS-64 reports were not designed at a sufficient level of precision to identify that these expenditures had
not been provided by IDHS for reporting on the CMS-64 report.
Criteria or Requirement:
42 CFR 430.30(c) requires States to submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures
for the Medical Assistance Program) to the central office not later than 30 days after the end of each
quarter. This report is the State’s accounting of actual recorded expenditures.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include procedures to ensure financial and
other award information reported in required financial reports is accurate prior to submission.
Cause:
In discussing these conditions with DHFS officials, programming errors related to a system change at
IDHS resulted in incomplete Home and Community Based Services expenditure information being
transferred to DHFS for claiming.
Possible Asserted Effect:
Failure to timely report expenditures on the CMS-64 inhibits USDHHS’ ability to monitor the Medicaid
Cluster program. Additionally, failure to report federal expenditures in a timely manner prohibits the
completion of an audit in accordance with the Uniform Guidance which may result in the suspension of
federal funding.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-014)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS evaluate its process for preparing and reviewing its financial reports and implement
the procedures necessary to ensure quarterly CMS-64 reports are complete and accurate.
Views of DHFS Officials:
DHFS accepts the recommendation.
As noted by the auditors, management of the Developmentally Disabled (DD) waiver program is shared
between IDHS and DHFS. IDHS administers the DD waiver program and pays provider billings. DHFS,
as the federally designated single state Medicaid agency, is tasked with claiming federal reimbursement.
While DHFS acknowledges current internal controls did not result in timely identification of the DD waiver
automated file transfer issue, DHFS did utilize two existing DD waiver tracking reports (acceptance/rejection report and federal revenue summary report) produced by DHFS and shared with
IDHS for purposes of verifying DD waiver billing information received by DHFS and the resulting amount
of federal revenue claimed. This longstanding inter-agency reporting process has historically served as an
effective internal control but given the DD waiver issue, the entire system of internal controls will be
revisited.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program
Medicaid Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
93.775/93.777/93.778 ($18,316,425,586)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Provider Eligibility (Screening and
Enrollment)
Finding 2022-015: Inadequate Procedures to Determine Provider Eligibility
Type of Finding: Noncompliance and material weakness Condition Found:
DHFS did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and
Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the
Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the voucher for the
related services performed was paid.
The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by DHFS for the
enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically
checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. During
our testing of 60 CHIP and 120 Medicaid beneficiary payments (totaling $351,494 and $327,392,
respectively) to ensure the providers were not on the LEIE at the time the voucher for the related services
performed was paid, we identified 11 CHIP payments (totaling $23,071) and 20 Medicaid payments
(totaling $40,430) to providers for services where the providers were not checked against the LEIE to
verify they were not on the LEIE for the month when the voucher was paid.
Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled
approximately $528,680,095 and $17,630,174,846, respectively, during the year ended June 30, 2022.
Criteria or Requirement:
2 CFR 455.436(a) requires the State Medicaid agency to confirm the identify and determine the exclusion
status of providers and any person with an ownership or control interest or who is an agent or managing
employee of a provider through routine checks of federal databases. Additionally, 42 CFR 455.436(b)
requires the State Medicaid agency to check the Social Security Administration's Death Master File, the
National Plan and Provider Enumeration System, the LEIE, the Excluded Parties List System (EPLS), and
any such other databases as the Secretary may prescribe. 42 CFR 455.436(c) requires the State Medicaid
agency to consult the appropriate databases to confirm identity upon enrollment and reenrollment and
check the LEIE and EPLS no less frequently than monthly. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include establishing adequate
procedures to screen providers of the CHIP and Medicaid Cluster programs, specifically, to ensure the
providers were not on the LEIE for the month when the voucher was paid.
Cause:
In discussing these conditions with DHFS officials, they stated the providers were not checked against the
LEIE on a monthly basis due to a processing error within the IMPACT system.
Possible Asserted Effect:
Failure to adequately screen CHIP and Medicaid Cluster program providers may result in federal funds
being paid to providers that should have been denied, which are unallowable costs.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-006. (Finding Code 2022-
015, 2021-006)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS address the IMPACT processing error for screening CHIP and Medicaid Cluster
program providers, specifically, the process to check, on a monthly basis, that providers are not on the
LEIE.
Views of DHFS Officials:
DHFS accepts the recommendation. The system defect that caused this screening error was corrected on
March 23, 2023. There haven’t been any screening issues since the correction was made.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $3,218,270
Compliance Requirement: Eligibility
Finding 2022-016: Failure to Discontinue CHIP Benefits for Ineligible Individuals
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS improperly continued providing benefits under the Children’s Health Insurance Program (CHIP)
program to individuals who were over the age of 19 prior to the start of the Public Health Emergency
(PHE) on March 13, 2020.
The CHIP program provides benefits to children under the age of 19 at an enhanced federal participation
(FFP) rate. CHIP benefits should be discontinued when a beneficiary turns 19; however, if they meet all
other eligibility criteria, these beneficiaries are allowed to transition to benefits under the Medicaid Cluster
program.
During our testing of payments (totaling $351,494) made on behalf of 60 CHIP beneficiaries, we
identified three beneficiaries(with sampled medical payments of $3,246) who were over the age of 19 on
or before March 13, 2020 (the beginning of the PHE). The total medical payments made on behalf of these
three beneficiaries during the year ended June 30, 2022, were $264,418. DHFS performed a review of
medical payments made during the year ended June 30, 2022 and identified a total of 1,330 CHIP
beneficiaries who attained the age of 19 prior to the beginning of the PHE for whom medical payments
totaling $3,218,270 were made during the year ended June 30, 2022.
We also noted DHFS has not established adequate controls to identify and remove individuals over the
age of 19 (who did not meet the eligibility requirements for the CHIP program) prior to the PHE to
determine if they were eligible for the Medicaid Cluster program.
Medical payments made on behalf of CHIP beneficiaries during the year ended June 30, 2022, totaled
$528,680,095.
Criteria or Requirement:
In accordance with 42 CFR 435.10 and the OMB Compliance Supplement, dated May 2022, the State is
required to determine client eligibility in accordance with eligibility requirements defined in the approved
State Plans for the CHIP program. Specifically, 42 CFR 457.320(a) requires the State CHIP agency to
provide benefits for groups of children up to, but not including the age 19 in addition to other eligibility criteria. State Plan Amendment IL-14-0009 includes general eligibility considerations which allows
benefits to be provided for children up to the age of 19 which is consistent with 42 CFR 457.320(a).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include establishing and maintaining
adequate controls over processes to perform and document beneficiary eligibility determinations.
Cause:
In discussing these conditions with DHFS officials, they stated the benefits were provided due to untimely
processing of redeterminations prior to the COVID-19 pandemic. After the pandemic, DHFS officials
believed they had to continue providing benefits to these individuals under the CHIP program.
Possible Asserted Effect:
Failure to properly perform eligibility determinations in accordance with State Plans may result in federal
funds being awarded to ineligible beneficiaries, which are unallowable costs.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-016)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS review its current process for performing eligibility decisions and consider changes
necessary to ensure all initial and redetermination decisions are performed in accordance with guidelines
set forth by the State Plan and temporary guidance set forth by COVID-19 waivers and announcements.
Views of DHFS Officials:
DHFS accepts the recommendation. In accordance with Federal CMS’ directive, DHFS resumed normal
operations regarding eligibility and redeterminations as of April 1, 2023. States can now terminate
individuals no longer eligible; Federal CMS has given states up to 14 months to return to normal eligibility
operations.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Children’s Health Insurance Program Cluster
ALN and Program Expenditures: 93.767 ($544,509,368)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: $3,218,270
Compliance Requirement: Eligibility
Finding 2022-016: Failure to Discontinue CHIP Benefits for Ineligible Individuals
Type of Finding: Material noncompliance and material weakness Condition Found:
DHFS improperly continued providing benefits under the Children’s Health Insurance Program (CHIP)
program to individuals who were over the age of 19 prior to the start of the Public Health Emergency
(PHE) on March 13, 2020.
The CHIP program provides benefits to children under the age of 19 at an enhanced federal participation
(FFP) rate. CHIP benefits should be discontinued when a beneficiary turns 19; however, if they meet all
other eligibility criteria, these beneficiaries are allowed to transition to benefits under the Medicaid Cluster
program.
During our testing of payments (totaling $351,494) made on behalf of 60 CHIP beneficiaries, we
identified three beneficiaries(with sampled medical payments of $3,246) who were over the age of 19 on
or before March 13, 2020 (the beginning of the PHE). The total medical payments made on behalf of these
three beneficiaries during the year ended June 30, 2022, were $264,418. DHFS performed a review of
medical payments made during the year ended June 30, 2022 and identified a total of 1,330 CHIP
beneficiaries who attained the age of 19 prior to the beginning of the PHE for whom medical payments
totaling $3,218,270 were made during the year ended June 30, 2022.
We also noted DHFS has not established adequate controls to identify and remove individuals over the
age of 19 (who did not meet the eligibility requirements for the CHIP program) prior to the PHE to
determine if they were eligible for the Medicaid Cluster program.
Medical payments made on behalf of CHIP beneficiaries during the year ended June 30, 2022, totaled
$528,680,095.
Criteria or Requirement:
In accordance with 42 CFR 435.10 and the OMB Compliance Supplement, dated May 2022, the State is
required to determine client eligibility in accordance with eligibility requirements defined in the approved
State Plans for the CHIP program. Specifically, 42 CFR 457.320(a) requires the State CHIP agency to
provide benefits for groups of children up to, but not including the age 19 in addition to other eligibility criteria. State Plan Amendment IL-14-0009 includes general eligibility considerations which allows
benefits to be provided for children up to the age of 19 which is consistent with 42 CFR 457.320(a).
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include establishing and maintaining
adequate controls over processes to perform and document beneficiary eligibility determinations.
Cause:
In discussing these conditions with DHFS officials, they stated the benefits were provided due to untimely
processing of redeterminations prior to the COVID-19 pandemic. After the pandemic, DHFS officials
believed they had to continue providing benefits to these individuals under the CHIP program.
Possible Asserted Effect:
Failure to properly perform eligibility determinations in accordance with State Plans may result in federal
funds being awarded to ineligible beneficiaries, which are unallowable costs.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-016)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DHFS review its current process for performing eligibility decisions and consider changes
necessary to ensure all initial and redetermination decisions are performed in accordance with guidelines
set forth by the State Plan and temporary guidance set forth by COVID-19 waivers and announcements.
Views of DHFS Officials:
DHFS accepts the recommendation. In accordance with Federal CMS’ directive, DHFS resumed normal
operations regarding eligibility and redeterminations as of April 1, 2023. States can now terminate
individuals no longer eligible; Federal CMS has given states up to 14 months to return to normal eligibility
operations.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Earmarking – 1915(c) Waivers
Finding 2022-017: Inadequate Segregation of Duties over Medicaid Earmarking Requirement
Type of Finding: Material weakness Condition Found:
DHFS does not have an adequate segregation of duties in place relative to the compilation and review of
the Center for Medicare and Medicaid Services (CMS) 372 report used to report earmarking requirements
applicable to Home and Community Based Services (HCBS) provided under section 1915(c) waivers.
The CMS 372 report details program information and data applicable to the HCBS waivers operated under
the Medicaid Cluster program. This report is used by USDHHS to monitor the State’s compliance with
HCBS waiver requirements.
During our review of the process for preparing and submitting the CMS 372 report, we noted the same
individual is responsible for the compilation, review, approval, and submission of the report. A
supervisory review of the report and related earmarking requirement is not performed by anyone other
than the preparer.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls f should include a supervisory review of all reports
prepared and filed with a federal agency.
Cause:
In discussing these conditions with DHFS officials, they stated there was not an individual appointed as
Deputy Administrator to review the CMS 372 reports prior to their submission.
Possible Asserted Effect:
An inadequate segregation of duties may result in inaccurate reporting which may prevent USDHHS from
properly monitoring and evaluating the HCBS waiver earmarking requirements. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-017)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should implement procedures to require an independent review of the CMS 372 report and
supporting schedules from a person knowledgeable of the earmarking requirement prior to the submission
of the report.
Views of DHFS Officials:
DHFS accepts the recommendation. A Deputy Administrator has been appointed and reviews all CMS 372
reports prior to their submission.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Healthcare and Family Services (DHFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Medicaid Cluster
ALN and Program Expenditures: 93.775/93.777/93.778 ($18,817,832,850)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – Medicaid National Correct Coding
Initiative
Finding 2022-018: Failure to Download and Implement Medicaid NCCI Edit Files
Type of Finding: Noncompliance and material weakness Condition Found: DHFS did not download quarterly Medicaid National Correct Coding Initiative (NCCI) edit files from the
Medicaid Integrity Institute and implement the edit files in their Medicaid Management Information System
(MMIS) for the Medicaid Cluster program.
State Medicaid agencies are required to apply NCCI edits to Medicaid fee-for-service claims. These NCCI
edits are intended to improve the accuracy of Medicaid payments and reduce improper Medicaid payments.
DHFS currently manages and operates the MMIS system to support claims processing for the Illinois
Medicaid Enterprise. During our testing, we noted DHFS has added edits to MMIS to address the six
Medicaid NCCI methodologies for fee for service claims; however, MMIS does not have the capability to
download Medicaid NCCI edit files from the Medicaid Integrity Institute. As a result, DHFS was unable
to download the quarterly Medicaid NCCI edit files for States during fiscal year 2022.
Criteria or Requirement:
Section 6507 of the Affordable Care Act (ACA) requires States to use compatible NCCI methodologies in
paying applicable Medicaid claims. The Center for Medicaid and CHIP Services (CMCS) requires that the
Medicaid Enterprise Systems (MES), formerly known as the MMIS, in each State completely and correctly
implement and use in paying applicable Medicaid claims the Medicaid NCCI methodologies. Specifically,
according to the NCCI Medicaid Technical Guidance Manual Section 2, States are required to implement,
and use in paying all applicable Medicaid claims, the new quarterly Medicaid NCCI edit files for States on
the first day of every calendar quarter corresponding to the effective date of the files.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards establish and maintain
internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program
compliance requirements. Effective internal controls should include implementing procedures required by
the Medicaid NCCI to download and implement edit files in DHFS’s MMIS. Cause:
In discussing these conditions with DHFS officials, they stated the current MMIS system does not have
the functionality built in to incorporate the NCCI edit files and enforce the rules.
Possible Asserted Effect:
Failure to download and implement quarterly edit files from the Medicaid Integrity Institute can result in
coding errors and improper payments for procedures and services.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-008. (Finding Code 2022-
018, 2021-008, 2020-009).
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
DHFS should make the necessary process changes to ensure quarterly Medicaid NCCI edit files from the
Medicaid Integrity Institute can be downloaded as required by the Affordable Care Act.
Views of DHFS Officials:
DHFS accepts the recommendation. While DHFS has implemented several custom edits to enforce the
NCCI rules and refers to the NCCI code on code rules for proper editing along with the enforcement of
medically unlikely edits, the functionality is not programmed against the quarterly files.
State Agency: Illinois Department of Children and Family Services (DCFS)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Adoption Assistance
ALN and Program Expenditures: 93.659 ($95,153,644)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Eligibility
Finding 2022-019: Inadequate Procedures to Reasonably Ensure Children are in the Continued Care
of Their Adoptive Parent
Type of Finding: Noncompliance and material weakness Condition Found:
DCFS does not have adequate procedures to reasonably ensure adoptive children for which adoption assistance
subsidies are paid are in the continued care of their adoptive parent(s).
The Adoption Assistance program provides funds to states to support the payment of subsidies and nonrecurring
expenses on behalf of eligible children with special needs. A child’s eligibility for the program
is determined initially at the time of adoption proceedings. However, it is the State’s responsibility to
establish a process to ensure that children on behalf of whom the State is making subsidy payments are in
the continued care of their adoptive parent(s).
Prior to fiscal year 2019, the State sent a recertification form to the adoptive parent(s) of a child on behalf
of whom the parent is receiving adoption subsidy payments on an annual basis. The form contained a
series of questions concerning the parents’ legal and financial responsibility for the child. The adoptive
parent(s) were required to answer the questions and then sign and return the form to DCFS to demonstrate
their continued legal and financial responsibility for the adopted child. Effective January 29, 2018, the
State amended DCFS’s policy guide to eliminate the requirement for the adoptive parent to complete the
recertification form. DCFS has not implemented new procedures or controls since the elimination of the
requirement to address the continued care eligibility requirement. While adoptive parents are told they
should inform DCFS of any change in the child’s care, DCFS does not have a process or control to validate
that all children remain in the care of their adoptive parents.
Adoption subsidies paid during the year ended June 30, 2022 totaled $71,769,651.
Criteria or Requirement:
According to 42 USC 673(a)(4), payments are discontinued when the state determines that the adoptive
parents are no longer legally responsible for the support of the child. Parents must keep the state agency
informed of circumstances that would make the child ineligible for adoption assistance payments or eligible
for assistance payments in a different amount. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include establishing procedures to monitor and validate
whether an adoptive child is in the continued care of their adoptive parent.
Cause:
In discussing these conditions with DCFS officials, they stated DCFS officials misinterpreted the federal
guidelines as well as the prior auditor recommendation when eliminating the completion of the
recertification form, which led to an incomplete solution to the control issues identified.
Possible Asserted Effect:
Failure to establish adequate procedures to identify and validate changes in the care of adoptive children
could result payments for ineligible beneficiaries which are unallowable costs.
Repeat Finding:
A similar finding was reported in prior year audit as finding number 2021-002. (Finding Code 2022-019,
2021-002, 2020-003, 2019-029, 2018-031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DCFS implement a process and controls to ensure payments made to adoptive parents are
only on behalf of eligible children in the continued care of their adoptive parents.
View of DCFS Officials:
DCFS agrees with the auditors’ recommendation. DCFS is currently working with USDHHS’ Childrens’
Bureau (CB) on a Program Improvement Plan (PIP) related to Adoption Assistance subsidy payments.
The PIP requires significant changes to Policy that are still being vetted by CB and DCFS management,
which will have a significant impact on how this program is carried out. As soon as the Policy changes
are completed, DCFS will finalize procedures consistent with Policy, the Social Security Act and Title
IV-E. These procedures will include controls to ensure payments made are appropriate per the subsidy
agreements with the adoptive parents and federal requirements.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers.
Federal Award Year: Various – see table of award numbers.
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-020: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDPH failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Epidemiology and Laboratory Capacity for Infectious
Diseases (ELC) program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDPH did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the ELC program for the period
July 1, 2021, through June 30, 2022. Of the information required to be reported, the following key data
elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that a new procedure was developed by the
previous CFO but required staffing to fully implement.
Possible Asserted Effect:
Failure to identify award subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-021. (Finding Code 2022-
020, 2021-021)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDPH Officials:
We agree with the recommendations of the auditor.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers.
Federal Award Year: Various – see table of award numbers.
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-020: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDPH failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Epidemiology and Laboratory Capacity for Infectious
Diseases (ELC) program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDPH did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the ELC program for the period
July 1, 2021, through June 30, 2022. Of the information required to be reported, the following key data
elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that a new procedure was developed by the
previous CFO but required staffing to fully implement.
Possible Asserted Effect:
Failure to identify award subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-021. (Finding Code 2022-
020, 2021-021)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDPH Officials:
We agree with the recommendations of the auditor.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-021: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDPH did not communicate required federal program information to subrecipients at the time of
disbursement for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program.
During our testing of 46 ELC subrecipient payments (totaling $18,040,567), we noted IDPH did not
communicate the Assistance Listing Number (ALN) at the time of disbursement for 7 of the subrecipient
payments tested (totaling $2,284,855). Further, we noted IDPH did not have effective controls to ensure
the ALN number was communicated at the time of payment.
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that once the deficiency was brought to
their attention in November of 2021, the corrective action was implemented, but the payments noted above
were before the deficiency was identified. Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement may inhibit the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-022. (Finding Code 2022-
021, 2021-022)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH add the ALN to the warrant description for each subrecipient disbursement made.
We also recommend IDPH implement additional control procedures necessary to ensure subrecipients are
provided information in accordance with Uniform Guidance requirements.
Views of IDPH Officials:
We agree with the auditor’s recommendation and have implemented the recommendations during the audit
period under review.
State Agency: Illinois Department of Public Health (IDPH)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
ALN and Program Expenditures: 93.323 ($248,405,971)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Subrecipient Monitoring
Finding 2022-021: Failure to Notify Subrecipients of Federal Funding
Type of Finding: Noncompliance and material weakness Condition Found:
IDPH did not communicate required federal program information to subrecipients at the time of
disbursement for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program.
During our testing of 46 ELC subrecipient payments (totaling $18,040,567), we noted IDPH did not
communicate the Assistance Listing Number (ALN) at the time of disbursement for 7 of the subrecipient
payments tested (totaling $2,284,855). Further, we noted IDPH did not have effective controls to ensure
the ALN number was communicated at the time of payment.
Amounts passed through to subrecipients under the ELC program totaled $133,533,458 during the year
ended June 30, 2022.
Criteria or Requirement:
Per 2 CFR 200.332(a)(1)(xii), all pass-through entities must identify the dollar amount made available
under each Federal award and the ALN at the time of disbursement.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include controls to ensure ALN
notifications are made at the time of subrecipient disbursement.
Cause:
In discussing these conditions with IDPH officials, IDPH stated that once the deficiency was brought to
their attention in November of 2021, the corrective action was implemented, but the payments noted above
were before the deficiency was identified. Possible Asserted Effect:
Failure to communicate ALNs at the time of disbursement may inhibit the subrecipient’s ability to correctly
prepare their schedule of expenditures of federal awards.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-022. (Finding Code 2022-
021, 2021-022)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDPH add the ALN to the warrant description for each subrecipient disbursement made.
We also recommend IDPH implement additional control procedures necessary to ensure subrecipients are
provided information in accordance with Uniform Guidance requirements.
Views of IDPH Officials:
We agree with the auditor’s recommendation and have implemented the recommendations during the audit
period under review.
State Agency: Illinois Criminal Justice Information Authority (ICJIA)
Federal Agency: U.S. Department of Justice (USDOJ)
Program Name: Crime Victim Assistance
ALN and Program Expenditures: 16.575 ($86,803,479)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-022: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
ICJIA failed to report subaward amendment information required by the Federal Funding Accountability
and Transparency Act (FFATA) for awards granted to subrecipients of the Crime Victim Assistance (CVA)
program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. Of the information required to be reported, the following key
data elements are required to be audited:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
During State fiscal year 2022, ICJIA did not have adequate controls in place to identify and report subaward
amendment information required by FFATA. For 16 FFATA reports tested, six had amendments that were
required to be reported. ICJIA did not report the correct amounts for two amendments tested. ICJIA was
unable to identify the number of contract amendments made during the year ended June 30, 2022.
ICJIA passed through approximately $83,376,000 to subrecipients of the CVA program during the year
ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a public
facing, OMB-designated, governmentwide website and follow OMB guidance to support Transparency
Act implementation. Consistent with the Federal Acquisition Regulation (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include implementing procedures to ensure all FFATA
reports are accurately prepared and submitted in accordance with federal regulations.
Cause:
In discussing these conditions with ICJIA officials, they stated they did not have a policy in place to report
amendment to subawards until October 2022.
Possible Asserted Effect:
Failure to report subaward amendments in accordance with FFATA results in noncompliance with federal
requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-028. (Finding Code 2022-
022, 2021-028)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend ICJIA establish procedures and controls to identify awards and amendments subject to
FFATA reporting requirements and report required subaward information in accordance with FFATA.
Views of ICJIA Officials:
ICJIA accepts the recommendation. Prior to receipt of this finding, in calendar year 2022, ICJIA developed
a new internal procedure that assisted agency personnel in identifying awards and amendments subject to
FFATA reporting requirements and report required subaward information in accordance with FFATA.
State Agency: Illinois Criminal Justice Information Authority (ICJIA)
Federal Agency: U.S. Department of Justice (USDOJ)
Program Name: Crime Victim Assistance
ALN and Program Expenditures: 16.575 ($86,803,479)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-023: Inaccurate Performance Report
Type of Finding: Noncompliance and material weaknessCondition Found:
ICJIA did not prepare an accurate performance report for the Crime Victim Assistance program.
ICJIA is required to prepare an annual Victims of Crime Act (VOCA) performance report for the Crime
Victim Assistance program. During our testwork over the VOCA report for the federal fiscal year ended
September 30, 2021, we noted the following errors: Additionally, in considering the reporting process for the VOCA performance report, we noted ICJIA did
not perform analytical or other procedures during the report preparation process to ensure amounts
reported were reasonable in relation to previously reported information or expectations relative to current
program activities.
Criteria or Requirement:
The Clarification for Victim Assistance Grantee PMT Reporting guidance from the Office for Victims of
Crime (OVC) in April 2020 communicates that "States should enter the amount of each federal award that
is allocated for administrative and training purposes on the Administration: Federal Award List page.
Administrative and training allocations should be updated at least annually, before the annual report is
submitted via Grant Management System (GMS).” In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure
amounts are accurately reported in the VOCA performance report.
Cause:
In discussing these conditions with ICJIA officials, they stated the administrative expenditures for each
award are tracked in their grants management system, however, none were reported in the annual
performance report.
Possible Asserted Effect:
Failure to accurately prepare the annual performance report prevents the USDOJ from effectively
monitoring the Crime Victim Assistance Program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend ICJIA accurately report data and information in its VOCA performance report.
Additionally, we recommend ICJIA review the process and procedures in place to prepare the annual
VOCA performance report required for the Crime Victim Assistance program and implement procedures
necessary to ensure the report is accurate.
Views of ICJIA Officials:
ICJIA accepts the recommendation. ICJIA will review its processes and procedures for the preparation of
the annual VOCA performance report and will update the processes and procedures to ensure accurate
reporting.
State Agency: Illinois Criminal Justice Information Authority (ICJIA)
Federal Agency: U.S. Department of Justice (USDOJ)
Program Name: Crime Victim Assistance
ALN and Program Expenditures: 16.575 ($86,803,479)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-024: Inadequate Controls over the Communication of Subrecipient Monitoring Results
Type of Finding: Significant deficiency Condition Found:
ICJIA did not consistently document supervisory reviews of the communication of on-site monitoring
review results in accordance with ICJIA’s control procedures.
ICJIA internal control procedures require a supervisory review and approval of program site visit reports
prior to providing the results to subrecipients. During our testing of 7 on-site reviews, we noted ICJIA
could not provide evidence a supervisory review of the site visit reports or communications of on-site
monitoring results to subrecipients had been performed for 3 on-site reviews tested in accordance with
ICJIA’s policies.
ICJIA passed through approximately $83,376,000 to subrecipients of the CVA program during the year
ended June 30, 2022.
Criteria or Requirement:
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include ensuring supervisory reviews of on-site
monitoring results and communications are performed.
Cause:
In discussing these conditions with ICJIA officials, they stated there was a timing issue between the report
approvals and sending of the follow up letters due to oversight.
Possible Asserted Effect:
Failure to properly review and approve monitoring reports may result inaccurate monitoring information
and results being communicated to subrecipients. Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-024)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend ICJIA review its current process for ensuring on-site monitoring results and
communications are properly reviewed and approved before they are sent to the subrecipients.
Views of ICJIA Officials:
ICJIA accepts the recommendation. The ICJIA Site Visit Policy requires approval of the site visit report by
the program supervisor prior to submission of a follow-up letter to subrecipients. ICJIA will review the Site
Visit Policy to ensure the language describing the timing of submissions is clear and will train staff on the
current policy, or any updates identified as part of the agency’s review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID )
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Special Tests and Provisions – UI Program Integrity – Overpayments
Finding 2022-025: Failure to Implement UI Program Integrity and Overpayment Reduction
Requirements
Type of Finding: Material noncompliance and material weakness Condition Found:
IDES did not implement Federal requirements to improve program integrity and reduce overpayments.
The State is required to establish written procedures for: (1) identifying overpayments, (2) classifying
overpayments into categories based on the reason the overpayment occurred (i.e. employer error, nonresponse
from employers, beneficiary fraud, etc.), and (3) establishing appropriate methods for following
up on each category of overpayment. In establishing these procedures, the State is required to enter into
three agreements prior to commencing recoveries. The first agreement permits the State to offset State
unemployment insurance (UI) from Federal UI overpayments (Cross Program Offset and Recovery
Agreement). The second agreement permits the State to recover overpayments from benefits being
administered by another State (Interstate Reciprocal Overpayment Recovery Agreement). The third
agreement permits the State to utilize the Treasury Offset Program to recover overpayments that remain
uncollected one year after the debt was determined to be due. Additionally, the State is (1) required to
impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in
overpayments, and (2) prohibited from providing relief from charges to an employer’s UI account when
overpayments are the result of the employer’s failure to respond timely or adequately to a request for
information.
During our testwork, we noted that while IDES has developed the written procedures relative to
overpayments and has entered into the required agreements described in the previous paragraph, the written
procedures did not address the requirement to impose a monetary penalty on fraud overpayments.
Additionally, we noted the policies do not address the prohibition of providing employers relief resulting
from an employer failing to provide timely or adequate information.
Criteria or Requirement:
42 U.S.C. 503(a)(11)(A) requires states to impose a monetary penalty (not less than 15 percent) on
claimants whose fraudulent acts resulted in overpayment. In addition, 26 U.S.C. 3303(f)(1)(A) prohibits
states from providing relief from charges to an employer’s UI account when overpayments are the result of
the employer’s failure to respond timely or adequately to a request for information. 26 U.S.C. 3304(a)(4)(D) and 42 U.S.C. 503(g)(1) require states to recover overpayments through offset
against unemployment compensation (UC) payments. In addition, 42 U.S.C. 503(m) requires states to
utilize the Treasury Offset Program for overpayments that remain uncollected one year after the debt was
determined to be due.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls should include procedures to ensure program
integrity and overpayment reduction requirements are implemented.
Cause:
In discussing these conditions with IDES officials, they stated although the 15% fraud penalty was
implemented and is supported by Illinois statute, the fraud penalty was not incorporated into existing
overpayment procedures due to oversight. Also, IDES had identified a process to implement the prohibition
on non-charging due to employer fault which was delayed by the historic unemployment claim surges due
to the pandemic.
Possible Asserted Effect:
Failure to implement federal requirements could result in noncompliance with laws, regulations, and the
grant agreement.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-033. (Finding Code 2022-025, 2021-
033, 2020-024, 2019-063, 2018-052, 2017-053, 2016-061, 2015-056)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES develop and implement written procedures to improve UI program integrity and
reduce overpayments that incorporate the required monetary penalty on fraud overpayments and prohibit
providing relief to employers who fail to provide timely and adequate responses to information requests.
Views of IDES Officials:
The Department accepts this recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-026: Inadequate Process for Preparing ETA 9130 Financial Reports
Type of Finding: Noncompliance and material weakness Condition Found:
IDES does not have an adequate process in place to ensure the ETA 9130 financial reports are prepared for
the Unemployment Insurance (UI) program are complete and accurate.
On a quarterly basis, IDES is required to report program and administrative expenditure information for
each grant award which they operate, including standard program and pilot, demonstration, and evaluation
projects, on the ETA 9130, Financial Status Report, UI Programs. Financial data is required to be reported
cumulative from grant inception through the end of each reporting period.
During our test work of 40 ETA 9130 reports covering the December 2021 and June 2022 quarters, we
noted certain grant awards had inaccurate amounts reported for key line items for the December 31, 2021
reporting quarter. Specifically, we noted IDES inaccurately reported the following line items: IDES reported corrections to the errors identified for recipient account numbers 21021, 21022, and 21095
in the subsequent quarterly report submissions to USDOL. As of the date of our testing, (May 30, 2023),
IDES has not submitted revised reports for the errors identified for recipient grant numbers 21020 and
45321.
We also noted IDES does not perform analytical or other procedures over previously reported information
or expectations relative to current program activities. Additionally, supervisory review procedures are not
designed to operate at a level of precision to identify errors of this nature.
Criteria or Requirement:
According to OMB Number 1205-0461, IDES is responsible for submitting a quarter ETA 9130 report at
the completion of each quarter. Each quarter should correspond to the following calendar quarter and dates:
March 31, June 30, September 30, and December 31. Additionally, the primary contact person, the
designated authorized official in the recipient’s organization, is responsible for certifying the accuracy of
the data reported to USDOL.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal control should include procedures to ensure the
completeness and accuracy of information reported in required financial reports. Cause:
In discussing with IDES officials, they indicated these conditions occurred as a result of increased
workloads due to the COVID-19 programs and numerous audits that occurred over the same time period.
Possible Asserted Effect:
Failure to prepare accurate ETA 9130 reports may inhibit the USDOL from effectively monitoring the UI
program.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-026)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its procedures for preparing ETA 9130 financial reports required for the UI
program and implement analytical and any other procedures considered necessary to ensure the reports are
complete and accurate prior to submission to the USDOL.
Views of IDES Officials:
IDES accepts the audit finding and will work to ensure the ETA 9130 financial reports are complete and
accurate.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: COVID-19 – Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($444,319,389 for PUA)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Eligibility
Finding 2022-027: Inadequate Controls over Determining Eligibility for the Pandemic
Unemployment Assistance Program
Type of Finding: Material weakness Condition Found:
IDES did not establish adequate internal controls over its third-party service organization who administered
the Unemployment Framework for Automated Claim & Tax Services (uFACTS) system used to determine
eligibility for claimants under the Pandemic Unemployment Assistance (PUA) program.
The PUA program was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES)
enacted on March 27, 2020. The main provisions of the PUA program include providing up to 39 weeks of
benefits to qualifying individuals who were otherwise able to work and available for work within the
meaning of applicable state law, except that they were unemployed, partially unemployed, or unable or
unavailable to work due to COVID-19 related reasons, as defined in the CARES Act. Benefit payments
under PUA were retroactive, for weeks of unemployment, partial unemployment, or inability to work due
to COVID-19 reasons starting on or after January 27, 2020 and through December 26, 2020. The Continued
Assistance Act, enacted on December 27, 2020, provided an additional 11 weeks of benefits to qualifying
individuals (increasing the duration from 39 to 50 weeks). Further, the American Rescue Plan Act (ARP),
enacted on March 11, 2021, provided an additional 29 weeks of benefits to qualifying individuals,
increasing the duration from 50 to 79 weeks.
IDES hired a third-party service organization to administer the uFACTS system. Specifically, the following
was noted with regard to general information technology controls (GITC):
Segregation of Duties (SOD) – Controls were not in place to restrict access to migrate program or
configuration changes into the production environment for the PUA system. For application changes, we
were unable to determine that SOD was enforced on the application level and no supporting evidence was
available to demonstrate SOD.
Given the segregation of duties issues identified above, no further testing of the GITC environment was
performed and uFACTS was not able to be relied on for control or compliance testing of PUA transactions.Criteria or Requirement:
2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. Effective internal controls should include procedures to ensure adequate monitoring controls
over the PUA program are implemented, including oversight controls over its third-party service
organization including user access provisioning, segregation of duties, and change management over
uFACTS.
Cause:
In discussing these conditions with IDES officials, they stated the reason for the uFACTS inadequate
system design was a result of the expedited timeframe of the PUA program implementation in order to
provide beneficiary payments to claimants as quickly as possible during the pandemic.
Possible Asserted Effect:
Failure to establish adequate processes and internal controls may result in noncompliance with program
regulations and payments to ineligible recipients.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-031. (Finding Code 2022-
027, 2021-031, 2020-023)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES review its current procedures and consider any changes necessary to ensure adequate
monitoring internal controls are established and implemented relating to the PUA program, including
oversight controls over its third-party service organization to address adequate segregation of duties over
uFACTS.
Views of IDES Officials:
The Department accepts the recommendation.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Employment Security (IDES)
Federal Agency: U.S. Department of Labor (USDOL)
Program Name: Unemployment Insurance Program
ALN and Program Expenditures: 17.225 ($2,236,535,243 for non-COVID)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-028: Failure to Follow Established Controls for ETA 2208A Special Report
Type of Finding: Significant deficiency Condition Found:
IDES did not follow its established policies and procedures for the preparation and review of the ETA
2208A special reports prepared for the Unemployment Insurance (UI) program.
On a quarterly basis, IDES is required to report information on staff years worked and paid by program
category on the ETA 2208A – Quarterly UI Above-Base (ETA 2208A) report. The information required to
be reported includes UI program staff year usage (Section A), regular contingency entitlement certification
(Section B), trade above-base entitlement certification (Section C), and additional benefits above-base
entitlement certification (Section D). Key line items required for testing include items one through seven
in Section A. IDES has implemented procedures whereby IDES program staff prepare the quarterly reports
and a supervisor reviews and approves the reports prior to submission to the USDOL.
During our testwork of two quarterly ETA 2208A reports, we noted IDES was unable to produce adequate
evidence of review and approval of the December 31, 2021 report by a supervisor.
Criteria or Requirement:
According to ET Handbook No. 336, 18th edition, IDES is required to submit quarterly UI above-base
reports (known as ETA 2208A reports) by the first day of the second month after the quarter of reference.
In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. Effective internal controls include following established policy for
program staff to prepare and a supervisor to review the special reports prior to submission to the USDOL. Cause:
In discussing these conditions with IDES officials, they stated the lack of evidence of review was due to
IDES personnel not properly documenting approval of the special reports prior to submission to the
USDOL. IDES officials stated this issue was exacerbated by staff turnover.
Possible Asserted Effect:
Failure to follow established reporting controls may result in inaccurate reports which prevents the USDOL
from effectively monitoring the UI program.
Repeat Finding:
A similar finding was reported in the prior year audit as finding number 2021-032. (Finding Code 2022-
028, 2021-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDES ensure the preparation and review of special reports prior to submission to the
USDOL is documented in accordance with its established policies and procedures.
Views of IDES Officials:
IDES accepts this audit finding and will implement an internal process to include supervisory review.
State Agency: Illinois Department of Transportation (IDOT)
Federal Agency: U.S. Department of Transportation (USDOT)
Program Name: COVID-19 – Airport Improvement Program
ALN and Program Expenditures: 20.106 ($96,389,802)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-029: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOT failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Airport Improvement Program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOT did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Airport Improvement
Program for the period July 1, 2021 through May 1, 2022 and the following information was not submitted:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
IDOT passed through approximately $95,044,000 to subrecipients of the COVID-19 – Airport
Improvement Program during the year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Regulation (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOT officials, IDOT stated missing FFATA reporting was due to
staffing transition combined with a lack of appropriate staffing resources.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subaward in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-036. (Finding Code 2022-029, 2021-
036)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOT establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOT Officials:
IDOT agrees with the finding and recommendation.
State Agency: Illinois Department of Transportation (IDOT)
Federal Agency: U.S. Department of Transportation (USDOT)
Program Name: COVID-19 – Airport Improvement Program
ALN and Program Expenditures: 20.106 ($96,389,802)
Award Numbers: Various – See schedule of award numbers
Federal Award Year: Various – See schedule of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-029: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOT failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Airport Improvement Program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOT did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Airport Improvement
Program for the period July 1, 2021 through May 1, 2022 and the following information was not submitted:
1. Subawardee Name
2. Subawardee DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
IDOT passed through approximately $95,044,000 to subrecipients of the COVID-19 – Airport
Improvement Program during the year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act
implementation. Consistent with the Federal Acquisition Regulation (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOT officials, IDOT stated missing FFATA reporting was due to
staffing transition combined with a lack of appropriate staffing resources.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subaward in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was reported in the prior year audit as number 2021-036. (Finding Code 2022-029, 2021-
036)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOT establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOT Officials:
IDOT agrees with the finding and recommendation.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Reporting
Finding 2022-030: Failure to Report Subaward Information Required by FFATA
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA failed to report information required by the Federal Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients of the Aging Cluster program.
FFATA requires the State to report certain identifying information related to awards made to subrecipients
in amounts greater than or equal to $30,000. During our testing, we noted that IDOA did not establish
control procedures to submit FFATA reports for all subawards as required by federal regulations. As a
result, FFATA reports were not prepared or submitted for any subawards of the Aging Cluster program for
the period July 1, 2021, through June 30, 2022. Of the information required to be reported, the following
key data elements are required to be audited:
1. Subaward Name
2. Subaward DUNS number
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of highly compensated officers
Amounts passed through to subrecipients under the Aging Cluster program totaled $58,510,661 during the
year ended June 30, 2022.
Criteria or Requirement:
In accordance with 2 CFR 170.200, Federal awarding agencies are required to publicly report Federal
awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing,
OMB-designated, governmentwide website and follow OMB guidance to support Transparency Act implementation. Consistent with the Federal Acquisition Register (FAR) threshold for subcontract
reporting, OMB raised the reporting threshold for subawards that equal or exceed $30,000.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include complying with FFATA.
Cause:
In discussing these conditions with IDOA officials, they stated that the FFATA reports had been started
within the 30-day requirement, but unfortunately were not completed due to the federal awards being
receive in pieces over a 12 to 16 month timeframe.
Possible Asserted Effect:
Failure to identify awards subject to FFATA and to report subawards in accordance with FFATA results in
noncompliance with federal requirements.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-030)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to identify awards subject to FFATA reporting requirements
and report required subaward information in accordance with FFATA.
Views of IDOA Officials:
Aging concurs with this finding and will adjust our procedures to complete the full FFATA report based on
estimates until the full award is received.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-031: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Material noncompliance and material weakness Condition Found:
IDOA did not adequately document review over single audit reports received from its subrecipients for the
Aging Cluster program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submitted their
single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible
for obtaining the single audit reporting package, verifying the report meets the single audit requirements,
and assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
IDOA staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDOA
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for four subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted IDOA did not document the reconciliation of the subrecipient
SEFAs to IDOA records within the GATA Audit Report Review Management System (ARRMS) and did
not issue management decision letters to each subrecipient as of the date of our testing (June 2023).
IDOA's subrecipient expenditures under the Aging Cluster program for the year ended June 30, 2022 were
$58,503,162.
Criteria or Requirement
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with IDOA officials, they stated the area agency on aging (AAA) audit
reviews are completed, however resolution of the reconciliation items and management decisions letters
were not completed timely due to a lack of staffing.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was reported in the 2019 Single Audit as finding number 2019-039. (Finding Code 2022-
031)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA establish procedures to ensure subrecipient single audit report reviews are completed
and documented in a timely manner. Additionally, IDOA should ensure procedures will permit issuance of
management decisions within required timeframes.
Views of IDOA Officials:
Aging has posted and scheduled interviews for the vacant position that will oversee this process.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department on Aging (IDOA)
Federal Agency: U.S. Department of Health and Human Services (USDHHS)
Program Name: Aging Cluster
ALN and Program Expenditures: 93.044/93.045/93.053 ($59,868,648)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: Cannot be determined
Compliance Requirement: Reporting
Finding 2022-032: Failure to Accurately Prepare Financial Reports for the Aging Cluster
Type of Finding: Noncompliance and material weakness Condition Found:
IDOA did not prepare accurate federal financial status reports (SF-425) for the Aging Cluster program.
IDOA is required to prepare semiannual federal financial status reports (SF-425) for each active federal
grant in the Aging Cluster. During our testing of five SF-425 report(s) submitted during the State fiscal
year ended June 30, 2022, we noted the following errors: In addition, the 3/31/2022 report for award 2101ILSCC6 did not contain the recipient share field or required
supplemental schedule. As the amounts were not tracked at the time, the actual amount and difference is
indeterminable.
Supervisory review procedures for the SF-425 reports were not documented and have not been
designed to operate at an appropriate level of precision to ensure the financial reports are accurately
prepared.
Criteria or Requirement:
Aging Cluster grants require grantees to submit SF-425 and Administration on Aging (AoA) Title III
supplemental forms on a semi-annual basis. Reports are due within 30 days for the periods ending March
31 and September 30 and are based on the accrual basis.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure financial and other award
information reported in required financial reports is accurate prior to submission. Cause:
ln discussing these conditions with IDOA officials, when the semi-annual SF-425 was prepared in
the payment management system for the Title III ARPA, the system does not contain the
supplemental form and therefore the supplemental form was accidently overlooked. Our ACL
Fiscal contact let us know that the supplemental form was missing, and we prepared it, submitted it,
and will continue to do so until the grant closes. The SF-425s for 2201ILOANS and 2201ILOACM
had underdraw’s reported on them which was noted in box 12.
Possible Asserted Effect:
Failure to establish adequate controls may result in inaccurate financial reports which prevents the
USDHHS from effectively monitoring the Aging Cluster. In addition, noncompliance
could occur
with regards to required matching specified in the grant awards.
Repeat Finding:
A similar finding was not reported in prior years. (Finding Code 2022-032)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend IDOA maintain documentation of the report reviews demonstrating reports are
complete, accurate, and agree or reconcile to financial records. We also recommend the review of
the matching information be enhanced to a greater precision level to address data input errors and
be retained to substantiate completion.
Views of IDOA Officials:
The Department agrees with the finding. However, the Department does have procedures for review
of the SF-425 as follows: the SF-425s are prepared internally by Department on Aging, reviewed
by a CPA firm, and submitted by the Agency through the payment management system. The SF-
425 supplemental form has been completed although after the audit was complete.
State Agency: Illinois Department of Corrections (DOC)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.019 ($190,168,889)
21.027 ($4,895,262,395)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: $219,695
Compliance Requirement: Allowable Costs/Cost Principles and Period of Performance
Finding 2022-033: Unallowable Costs Charged to the Coronavirus Relief Fund Program
Type of Finding: Material noncompliance and material weakness (CRF)
Material weakness (SLFRF) Condition Found:
DOC charged subrecipient expenditures to the Coronavirus Relief Fund (CRF) program which were
incurred prior to the period of performance.
The CRF program was enacted by Congress to provide direct payments to state, territorial, tribal, and certain
eligible local governments to cover: (1) necessary expenditures incurred due to the public health emergency
with respect to COVID-19; (2) costs that were not accounted for in the governments approved budget as of
March 27, 2020; and (3) costs that were incurred during the period from March 1, 2020 through December
31, 2021. During our testing of 19 expenditures (totaling $3,869,083) charged to the CRF program during
the year ended June 30, 2022, we noted two expenditures for payments to subrecipients (totaling $219,695)
for which the underlying expenditures submitted to the DOC for reimbursement pertained to expenditures
incurred by the subrecipient prior to March 1, 2020. As these expenditures were incurred prior to the
beginning of the period of performance for the CRF program, they are not allowable costs.
Additionally, we noted seven CRF expenditures (totaling $2,007,224) from the 19 tested that were not paid
by the State until after June 30, 2022, but were included in the 2022 Schedule of Expenditures of Federal
Awards (SEFA). As the State prepares its SEFA using the cash basis of accounting, these expenditures
were erroneously reported on the 2022 SEFA. Further, in review of the expenditures claimed under the
CRF program by DOC, we noted 69 expenditures (totaling $18,080,783) that were not paid by the State
until after June 30, 2022. The State’s 2022 SEFA was not corrected for this error.
Further, we noted DOC has not established supervisory review controls over expenditures for the CRF and
SLFRF programs at an adequate level of precision to ensure: (1) expenditures reimbursed to subrecipients
are within the period of performance or (2) expenditures reported on the SEFA are reported in accordance
with the cash basis of accounting. DOC expenditures for the CRF program and SLFRF program totaled $128,426,203 and $304,791,247,
respectively, during the year ended June 30, 2022.
Criteria or Requirement:
The Federal Register Volume 86, Number 10 (dated January 15, 2021) states “the CARES Act provides
that payments from the Fund may only be used to cover costs that:
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of
enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021.”
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which
must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure: (1) expenditures are
reimbursed by the State are within the period of performance and (2) are reported on the SEFA in
accordance with cash basis of accounting.
Cause:
In discussing these conditions with DOC officials, they stated that when the expenses were selected for
reimbursement, the posting date of the transaction was inadvertently reviewed and used. All posting dates
fell on or before June 30, 2022. As noted in the finding, the actual warrant date should have been reviewed
and used for cash basis.
Possible Asserted Effect:
Failure to ensure payments to subrecipients are only for expenditures incurred during the period of
performance results in noncompliance and unallowable costs. Additionally, failure to report expenditures
in accordance with the cash basis of accounting inhibits the auditors ability to properly determine major
programs in accordance with the Uniform Guidance.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-033)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DOC implement procedures to properly review detail expenditures at the appropriate level
of precision to ensure federal expenditures: (1) are within the period of performance and (2) are reported
on the State’s SEFA in accordance with the cash basis of accounting. Views of DOC Officials:
DOC agrees with the recommendation. DOC will ensure appropriate reviews are completed prior to
submission of information related to expenditures of Federal Awards.
State Agency: Illinois Department of Corrections (DOC)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.019 ($190,168,889)
21.027 ($4,895,262,395)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: $219,695
Compliance Requirement: Allowable Costs/Cost Principles and Period of Performance
Finding 2022-033: Unallowable Costs Charged to the Coronavirus Relief Fund Program
Type of Finding: Material noncompliance and material weakness (CRF)
Material weakness (SLFRF) Condition Found:
DOC charged subrecipient expenditures to the Coronavirus Relief Fund (CRF) program which were
incurred prior to the period of performance.
The CRF program was enacted by Congress to provide direct payments to state, territorial, tribal, and certain
eligible local governments to cover: (1) necessary expenditures incurred due to the public health emergency
with respect to COVID-19; (2) costs that were not accounted for in the governments approved budget as of
March 27, 2020; and (3) costs that were incurred during the period from March 1, 2020 through December
31, 2021. During our testing of 19 expenditures (totaling $3,869,083) charged to the CRF program during
the year ended June 30, 2022, we noted two expenditures for payments to subrecipients (totaling $219,695)
for which the underlying expenditures submitted to the DOC for reimbursement pertained to expenditures
incurred by the subrecipient prior to March 1, 2020. As these expenditures were incurred prior to the
beginning of the period of performance for the CRF program, they are not allowable costs.
Additionally, we noted seven CRF expenditures (totaling $2,007,224) from the 19 tested that were not paid
by the State until after June 30, 2022, but were included in the 2022 Schedule of Expenditures of Federal
Awards (SEFA). As the State prepares its SEFA using the cash basis of accounting, these expenditures
were erroneously reported on the 2022 SEFA. Further, in review of the expenditures claimed under the
CRF program by DOC, we noted 69 expenditures (totaling $18,080,783) that were not paid by the State
until after June 30, 2022. The State’s 2022 SEFA was not corrected for this error.
Further, we noted DOC has not established supervisory review controls over expenditures for the CRF and
SLFRF programs at an adequate level of precision to ensure: (1) expenditures reimbursed to subrecipients
are within the period of performance or (2) expenditures reported on the SEFA are reported in accordance
with the cash basis of accounting. DOC expenditures for the CRF program and SLFRF program totaled $128,426,203 and $304,791,247,
respectively, during the year ended June 30, 2022.
Criteria or Requirement:
The Federal Register Volume 86, Number 10 (dated January 15, 2021) states “the CARES Act provides
that payments from the Fund may only be used to cover costs that:
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of
enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021.”
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which
must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure: (1) expenditures are
reimbursed by the State are within the period of performance and (2) are reported on the SEFA in
accordance with cash basis of accounting.
Cause:
In discussing these conditions with DOC officials, they stated that when the expenses were selected for
reimbursement, the posting date of the transaction was inadvertently reviewed and used. All posting dates
fell on or before June 30, 2022. As noted in the finding, the actual warrant date should have been reviewed
and used for cash basis.
Possible Asserted Effect:
Failure to ensure payments to subrecipients are only for expenditures incurred during the period of
performance results in noncompliance and unallowable costs. Additionally, failure to report expenditures
in accordance with the cash basis of accounting inhibits the auditors ability to properly determine major
programs in accordance with the Uniform Guidance.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-033)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DOC implement procedures to properly review detail expenditures at the appropriate level
of precision to ensure federal expenditures: (1) are within the period of performance and (2) are reported
on the State’s SEFA in accordance with the cash basis of accounting. Views of DOC Officials:
DOC agrees with the recommendation. DOC will ensure appropriate reviews are completed prior to
submission of information related to expenditures of Federal Awards.
State Agency: Illinois Department of Corrections (DOC)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
ALN and Program Expenditures: 21.019 ($190,168,889)
21.027 ($4,895,262,395)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: $219,695
Compliance Requirement: Allowable Costs/Cost Principles and Period of Performance
Finding 2022-033: Unallowable Costs Charged to the Coronavirus Relief Fund Program
Type of Finding: Material noncompliance and material weakness (CRF)
Material weakness (SLFRF) Condition Found:
DOC charged subrecipient expenditures to the Coronavirus Relief Fund (CRF) program which were
incurred prior to the period of performance.
The CRF program was enacted by Congress to provide direct payments to state, territorial, tribal, and certain
eligible local governments to cover: (1) necessary expenditures incurred due to the public health emergency
with respect to COVID-19; (2) costs that were not accounted for in the governments approved budget as of
March 27, 2020; and (3) costs that were incurred during the period from March 1, 2020 through December
31, 2021. During our testing of 19 expenditures (totaling $3,869,083) charged to the CRF program during
the year ended June 30, 2022, we noted two expenditures for payments to subrecipients (totaling $219,695)
for which the underlying expenditures submitted to the DOC for reimbursement pertained to expenditures
incurred by the subrecipient prior to March 1, 2020. As these expenditures were incurred prior to the
beginning of the period of performance for the CRF program, they are not allowable costs.
Additionally, we noted seven CRF expenditures (totaling $2,007,224) from the 19 tested that were not paid
by the State until after June 30, 2022, but were included in the 2022 Schedule of Expenditures of Federal
Awards (SEFA). As the State prepares its SEFA using the cash basis of accounting, these expenditures
were erroneously reported on the 2022 SEFA. Further, in review of the expenditures claimed under the
CRF program by DOC, we noted 69 expenditures (totaling $18,080,783) that were not paid by the State
until after June 30, 2022. The State’s 2022 SEFA was not corrected for this error.
Further, we noted DOC has not established supervisory review controls over expenditures for the CRF and
SLFRF programs at an adequate level of precision to ensure: (1) expenditures reimbursed to subrecipients
are within the period of performance or (2) expenditures reported on the SEFA are reported in accordance
with the cash basis of accounting. DOC expenditures for the CRF program and SLFRF program totaled $128,426,203 and $304,791,247,
respectively, during the year ended June 30, 2022.
Criteria or Requirement:
The Federal Register Volume 86, Number 10 (dated January 15, 2021) states “the CARES Act provides
that payments from the Fund may only be used to cover costs that:
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID-19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of
enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021.”
According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of
expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which
must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.
2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal
control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance
requirements. Effective internal controls should include procedures to ensure: (1) expenditures are
reimbursed by the State are within the period of performance and (2) are reported on the SEFA in
accordance with cash basis of accounting.
Cause:
In discussing these conditions with DOC officials, they stated that when the expenses were selected for
reimbursement, the posting date of the transaction was inadvertently reviewed and used. All posting dates
fell on or before June 30, 2022. As noted in the finding, the actual warrant date should have been reviewed
and used for cash basis.
Possible Asserted Effect:
Failure to ensure payments to subrecipients are only for expenditures incurred during the period of
performance results in noncompliance and unallowable costs. Additionally, failure to report expenditures
in accordance with the cash basis of accounting inhibits the auditors ability to properly determine major
programs in accordance with the Uniform Guidance.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-033)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DOC implement procedures to properly review detail expenditures at the appropriate level
of precision to ensure federal expenditures: (1) are within the period of performance and (2) are reported
on the State’s SEFA in accordance with the cash basis of accounting. Views of DOC Officials:
DOC agrees with the recommendation. DOC will ensure appropriate reviews are completed prior to
submission of information related to expenditures of Federal Awards.
State Agency: Illinois Department of Commerce and Economic Opportunity (DCEO)
Federal Agency: U.S. Treasury Department (TREAS)
Program Name: COVID-19 – Coronavirus Relief Fund
ALN and Program Expenditures: 21.019 ($190,168,889)
Award Numbers: Various – see table of award numbers
Federal Award Year: Various – see table of award numbers
Questioned Costs: None
Compliance Requirement: Subrecipient Monitoring
Finding 2022-034: Inadequate Review of Subrecipient Single Audit Reports
Type of Finding: Significant deficiency Condition Found:
DCEO did not adequately review single audit reports received from its subrecipients for the Coronavirus
Relief Fund (CRF) program on a timely basis.
The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the
provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU
has established standardized reporting requirements for subrecipients of the various Federal programs
administered by the State through its various departments. Subrecipients of the State are required to certify
whether they expended more than $750,000 in federal awards during the fiscal year and submit their single
audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for
obtaining the single audit reporting package, verifying the report meets the single audit requirements, and
assigning, to the applicable state agency, any findings attributable to amounts passed through to the
subrecipient(s) by the State.
DCEO staff are responsible for reviewing the reports assigned to them by GATU and determining whether:
(1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to DCEO
records and (2) issuing management decisions on findings reported within required time frames.
During our testing of a sample of single audit desk review files for one subrecipient (with expenditures of
$10,180 in the fiscal year) out of 60 tested (with expenditures of $8,356,958), we noted DCEO did not issue
management decision letters to the subrecipient within the required time frame. The delay in issuing this
management decision was 5 days beyond the required timeframe. Further, we noted DCEO has not
established controls over subrecipient single audit reviews at an adequate level of precision to ensure
management decision letters are issued within required timeframes.
DCEO's subrecipient expenditures under the CRF program for the year ended June 30, 2022 were
$18,502,818. Amounts passed through to subrecipients by the State under the CRF program totaled
$24,432,342.
Criteria or Requirement:
According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as
necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subaward, and that the subaward performance goals are
achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required
to issue a management decision on federal awards audit findings within six months of the acceptance of the
report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate
corrective action on all audit findings.
Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and
maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and
program compliance requirements. Effective internal controls should include procedures to ensure Single
Audit reports are reviewed in a timely manner and management decisions are issued within required
timeframes.
Cause:
In discussing these conditions with DCEO officials, they stated the 5 day delay (which includes two
weekend days and a holiday) in issuing the management decision letter was caused by human error.
Possible Asserted Effect:
Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result
in federal funds being expended for unallowable purposes and subrecipients not administering the federal
programs in accordance with laws, regulations and the grant agreement.
Repeat Finding:
A similar finding was not reported in the prior year audit. (Finding Code 2022-034)
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
We recommend DCEO establish procedures to ensure subrecipient single audit report reviews are
completed and documented in a timely manner. Additionally, DCEO should ensure procedures will permit
issuance of management decisions within required timeframes.
Views of DCEO Officials:
DCEO agrees with the auditor’s recommendation. DCEO has a system and procedures in place to
assist with the compliance of 2 CFR 200.332(d)(3) and 2 CFR 200.521. Unfortunately, due to human
error, the automatic reminder for ensuring issuance of the MDL was missed. At the time, the position
responsible for issuing MDLs was vacant and the unit supervisor was completing those responsibilities in
addition to her other duties. The position responsible for issuing MDLs has since been filled (June 2023)
and DCEO does not expect this issue to repeat as now there is a primary person responsible and a backup
person (the supervisor).