Audit 302802

Finding 2022–002: Internal Controls over Allowable Costs Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity. Condition During the current audit period, SDA did not maintain adequate controls over allowable costs related to its federally funded program. Cause Based on our discussions with management, this finding occurred due to staff turnovers. This resulted in consistent documentation not maintained to support the approval of invoices and related expenditures charged to the program. Effect The failure to maintain adequate documentation to verify that expenditures are properly reviewed and approved and to maintain adequate supporting documentation to ensure all payroll expenditures are reasonable and properly reviewed is a violation of federal regulations, which could result in unallowed costs being charged to the federally funded program. Questioned Costs We noted total questioned costs of $2,666. Context During our review of 45 expenditures (from a 326 population), we noted seven expenditures had no evidence of invoice approval prior to payment. From our review of these expenditures and related invoices, we did not note any costs that were deemed to be unallowed per the grantor(s) requirements and federal regulations. During our test of payroll, we noted two employees were charged to the grant with expenditures totaling $4,833. For one employee tested, we noted no evidence, such as time and effort reporting, to determine whether the employee worked on this grant and to support the amount of $2,666 charged to the program. Identification of Repeated Findings Repeated (Prior Finding No. 2021-002, 2020-002). Recommendation We recommend that SDA implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–003: Procurement Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.318, General procurement standards (a) states “the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in Section 200.317 through 200.327.” Section 200.318 (i) states “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” SDA’s Fiscal Policies and Procedures Manual updated July 21, 2022 (“the Manual”) states “Procurement shall be made using one of the following methods: 1) Micro and Small Purchase Threshold; 2) Competitive Sealed Bids and Competitive Negotiations and 3) Non-Competitive Negotiations. All methods of procurement, when funded by federal grants or contracts, must follow procurement requirements contained in the OMB, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for federal awards. Any purchases over $10,000 must bid competitively if subject to a single federal audit.” In addition, the Manual states “purchases related to Federally funded grants over $10,000 will be bid through either a Request for Proposal (RFP) or Request for Qualifications (RFQ) process. In addition, Request for Information (RFI) process may be used to help inform the development of either RFP, RFQ or other forms of procurement. Awards will be awarded to responses that meet the outlined criteria and reflect the lowest responsible bid. Contractors will be excluded from conducting business with the SDA if the contractor has been debarred and/or suspended from conducting business with the federal government. On a regular basis, the SDA will check vendors for any debarment status change on the federal System for Award Management (SAM). All source documents supporting any given transaction (e.g., receipts, invoices, and RFP data) will be retained and filed with SDA contract files in a centralized location. At a minimum, source document data must be sufficient to establish the basis for selection, the basis for the cost (including the reasonableness of cost), the rationale for the method of procurement and selection of contract type, and the basis for payment.” Condition During the current audit period, SDA did not adequately ensure federally funded contract issued to vendors followed federal regulations and its internal policy, which includes maintaining documents to support its procurement decisions. Cause Based on our discussions with management, SDA completed the RFQ process for this vendor but did not maintain the documentation of the decision-making process and scoring as outlined in its procurement policy. The documentation was deleted by a staff member who left the organization. Effect The failure to maintain adequate documentation to support the procurement of federally funded contracts is a violation of federal regulations. Questioned Costs None. Context During the test of procurement, SDA management identified two contracts with expenditures over the $10,000 threshold requiring competitive bid per its internal policy. For one contract, management noted that procurement was completed in 2021, hence outside the audit period. For the second contract, we noted that while an RFQ was obtained from the contractor, there was no evidence to support the basis for contractor selection (based on evaluation criteria and scoring outlined in the RFQ), the basis for the contract price, and evidence that debarment/suspension verification checks were performed prior to awarding the contract. Identification of Repeated Findings None. Recommendation We recommend that SDA’s management adhere to its written policy and maintain documentation to support all management decisions related to federally funded procurements to comply with federal regulations. Also, SDA should consider creating a checklist/internal form to document its procurement decisions and related approvals, as required. We also recommend that SDA develop procedures to identify all federally funded contracts let/awarded during the fiscal year to ensure compliance with its internal policy. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–004: Reporting Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria The Subrecipient Agreement for American Rescue Plan Act- State and Local Fiscal Recovery Funds between Cook County, Illinois (the County) and SDA, Exhibit A – Scope of Work states SDA shall provide performance and financial metrics and reports to the County on a monthly basis or as determined by the County and outlined in reporting and metrics sections of this agreement. Per the agreement, invoice (expense) submission is due at the end of each month and/or if funds are received in advance, the submission is due within one month of the expenditure. In addition, monthly performance (impact metrics) reporting of data will take place on the 15th day of each month following the reporting period in which it is applicable. The following program metrics will be collected and provided to the County in the following categories: 1) Client Service Metrics; 2) Develop annual survey to capture Business Growth Metrics; 3) Develop annual survey to capture Capital Metrics; 4) Marketing and Outreach Metrics; and 4) Financial Reporting. The 2022 Amendment to the Subaward and Fund Distribution Memorandum of Understanding (MOU) agreement dated December 15, 2021 between the Women’s Business Development Center (WBDC) and SDA states a provider seeking expense reimbursement shall provide supporting documentation at the end of each month with WBDC or Next Street for each expense item. The second amendment to the MOU covering the period beginning April 1, 2022 to November 30, 2026, states that invoice shall be submitted for review by August 12 for April through June expenses, October 14 for July through September expenses, and December 9 for October through November expenses. Condition During the current audit period, SDA did not comply with the reporting requirements outlined in its grant agreements. Cause Based on our discussions with management, this finding occurred due to staff turnovers and management’s oversight as proper reminders were not set up at commencement of the grant agreement(s). Effect Failure to submit reports in a timely manner impairs the grantor agency’s ability to monitor program activities and could result in the loss of grant funding. Also, the failure to maintain adequate supporting documentation could result in inaccurate reporting and is a violation of grantor(s) reporting requirements. Questioned Costs None. Context During our test of monthly and quarterly reports submitted under the program, we reviewed a total of eight reports (six monthly reports from the two County grant agreements and two quarterly reports from the WBDC grant agreement). We noted that seven reports were submitted late, ranging from six to 195 days late. Also, for five of the six County grant reports above, we were unable to obtain evidence to support the completion and submission of the performance reporting metrics. Based on our current year walkthrough and discussions with SDA management, we noted that SDA utilized the Salesforce system to track, report and submit information related to these performance metrics. However, a copy of the Data Collection Form after submission was not maintained on file. Identification of Repeated Findings Repeated (Prior Finding No. 2020-003, 2021-003). Recommendation We recommend that SDA implement procedures to ensure required reports are prepared, reviewed and submitted in a timely manner and in compliance with its grant agreements. Additionally, adequate documentation should be appropriately maintained to support all reports prepared and submitted under the grant agreements. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–002: Internal Controls over Allowable Costs Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity. Condition During the current audit period, SDA did not maintain adequate controls over allowable costs related to its federally funded program. Cause Based on our discussions with management, this finding occurred due to staff turnovers. This resulted in consistent documentation not maintained to support the approval of invoices and related expenditures charged to the program. Effect The failure to maintain adequate documentation to verify that expenditures are properly reviewed and approved and to maintain adequate supporting documentation to ensure all payroll expenditures are reasonable and properly reviewed is a violation of federal regulations, which could result in unallowed costs being charged to the federally funded program. Questioned Costs We noted total questioned costs of $2,666. Context During our review of 45 expenditures (from a 326 population), we noted seven expenditures had no evidence of invoice approval prior to payment. From our review of these expenditures and related invoices, we did not note any costs that were deemed to be unallowed per the grantor(s) requirements and federal regulations. During our test of payroll, we noted two employees were charged to the grant with expenditures totaling $4,833. For one employee tested, we noted no evidence, such as time and effort reporting, to determine whether the employee worked on this grant and to support the amount of $2,666 charged to the program. Identification of Repeated Findings Repeated (Prior Finding No. 2021-002, 2020-002). Recommendation We recommend that SDA implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–003: Procurement Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.318, General procurement standards (a) states “the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in Section 200.317 through 200.327.” Section 200.318 (i) states “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” SDA’s Fiscal Policies and Procedures Manual updated July 21, 2022 (“the Manual”) states “Procurement shall be made using one of the following methods: 1) Micro and Small Purchase Threshold; 2) Competitive Sealed Bids and Competitive Negotiations and 3) Non-Competitive Negotiations. All methods of procurement, when funded by federal grants or contracts, must follow procurement requirements contained in the OMB, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for federal awards. Any purchases over $10,000 must bid competitively if subject to a single federal audit.” In addition, the Manual states “purchases related to Federally funded grants over $10,000 will be bid through either a Request for Proposal (RFP) or Request for Qualifications (RFQ) process. In addition, Request for Information (RFI) process may be used to help inform the development of either RFP, RFQ or other forms of procurement. Awards will be awarded to responses that meet the outlined criteria and reflect the lowest responsible bid. Contractors will be excluded from conducting business with the SDA if the contractor has been debarred and/or suspended from conducting business with the federal government. On a regular basis, the SDA will check vendors for any debarment status change on the federal System for Award Management (SAM). All source documents supporting any given transaction (e.g., receipts, invoices, and RFP data) will be retained and filed with SDA contract files in a centralized location. At a minimum, source document data must be sufficient to establish the basis for selection, the basis for the cost (including the reasonableness of cost), the rationale for the method of procurement and selection of contract type, and the basis for payment.” Condition During the current audit period, SDA did not adequately ensure federally funded contract issued to vendors followed federal regulations and its internal policy, which includes maintaining documents to support its procurement decisions. Cause Based on our discussions with management, SDA completed the RFQ process for this vendor but did not maintain the documentation of the decision-making process and scoring as outlined in its procurement policy. The documentation was deleted by a staff member who left the organization. Effect The failure to maintain adequate documentation to support the procurement of federally funded contracts is a violation of federal regulations. Questioned Costs None. Context During the test of procurement, SDA management identified two contracts with expenditures over the $10,000 threshold requiring competitive bid per its internal policy. For one contract, management noted that procurement was completed in 2021, hence outside the audit period. For the second contract, we noted that while an RFQ was obtained from the contractor, there was no evidence to support the basis for contractor selection (based on evaluation criteria and scoring outlined in the RFQ), the basis for the contract price, and evidence that debarment/suspension verification checks were performed prior to awarding the contract. Identification of Repeated Findings None. Recommendation We recommend that SDA’s management adhere to its written policy and maintain documentation to support all management decisions related to federally funded procurements to comply with federal regulations. Also, SDA should consider creating a checklist/internal form to document its procurement decisions and related approvals, as required. We also recommend that SDA develop procedures to identify all federally funded contracts let/awarded during the fiscal year to ensure compliance with its internal policy. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–004: Reporting Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria The Subrecipient Agreement for American Rescue Plan Act- State and Local Fiscal Recovery Funds between Cook County, Illinois (the County) and SDA, Exhibit A – Scope of Work states SDA shall provide performance and financial metrics and reports to the County on a monthly basis or as determined by the County and outlined in reporting and metrics sections of this agreement. Per the agreement, invoice (expense) submission is due at the end of each month and/or if funds are received in advance, the submission is due within one month of the expenditure. In addition, monthly performance (impact metrics) reporting of data will take place on the 15th day of each month following the reporting period in which it is applicable. The following program metrics will be collected and provided to the County in the following categories: 1) Client Service Metrics; 2) Develop annual survey to capture Business Growth Metrics; 3) Develop annual survey to capture Capital Metrics; 4) Marketing and Outreach Metrics; and 4) Financial Reporting. The 2022 Amendment to the Subaward and Fund Distribution Memorandum of Understanding (MOU) agreement dated December 15, 2021 between the Women’s Business Development Center (WBDC) and SDA states a provider seeking expense reimbursement shall provide supporting documentation at the end of each month with WBDC or Next Street for each expense item. The second amendment to the MOU covering the period beginning April 1, 2022 to November 30, 2026, states that invoice shall be submitted for review by August 12 for April through June expenses, October 14 for July through September expenses, and December 9 for October through November expenses. Condition During the current audit period, SDA did not comply with the reporting requirements outlined in its grant agreements. Cause Based on our discussions with management, this finding occurred due to staff turnovers and management’s oversight as proper reminders were not set up at commencement of the grant agreement(s). Effect Failure to submit reports in a timely manner impairs the grantor agency’s ability to monitor program activities and could result in the loss of grant funding. Also, the failure to maintain adequate supporting documentation could result in inaccurate reporting and is a violation of grantor(s) reporting requirements. Questioned Costs None. Context During our test of monthly and quarterly reports submitted under the program, we reviewed a total of eight reports (six monthly reports from the two County grant agreements and two quarterly reports from the WBDC grant agreement). We noted that seven reports were submitted late, ranging from six to 195 days late. Also, for five of the six County grant reports above, we were unable to obtain evidence to support the completion and submission of the performance reporting metrics. Based on our current year walkthrough and discussions with SDA management, we noted that SDA utilized the Salesforce system to track, report and submit information related to these performance metrics. However, a copy of the Data Collection Form after submission was not maintained on file. Identification of Repeated Findings Repeated (Prior Finding No. 2020-003, 2021-003). Recommendation We recommend that SDA implement procedures to ensure required reports are prepared, reviewed and submitted in a timely manner and in compliance with its grant agreements. Additionally, adequate documentation should be appropriately maintained to support all reports prepared and submitted under the grant agreements. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–002: Internal Controls over Allowable Costs Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity. Condition During the current audit period, SDA did not maintain adequate controls over allowable costs related to its federally funded program. Cause Based on our discussions with management, this finding occurred due to staff turnovers. This resulted in consistent documentation not maintained to support the approval of invoices and related expenditures charged to the program. Effect The failure to maintain adequate documentation to verify that expenditures are properly reviewed and approved and to maintain adequate supporting documentation to ensure all payroll expenditures are reasonable and properly reviewed is a violation of federal regulations, which could result in unallowed costs being charged to the federally funded program. Questioned Costs We noted total questioned costs of $2,666. Context During our review of 45 expenditures (from a 326 population), we noted seven expenditures had no evidence of invoice approval prior to payment. From our review of these expenditures and related invoices, we did not note any costs that were deemed to be unallowed per the grantor(s) requirements and federal regulations. During our test of payroll, we noted two employees were charged to the grant with expenditures totaling $4,833. For one employee tested, we noted no evidence, such as time and effort reporting, to determine whether the employee worked on this grant and to support the amount of $2,666 charged to the program. Identification of Repeated Findings Repeated (Prior Finding No. 2021-002, 2020-002). Recommendation We recommend that SDA implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–003: Procurement Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.318, General procurement standards (a) states “the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in Section 200.317 through 200.327.” Section 200.318 (i) states “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” SDA’s Fiscal Policies and Procedures Manual updated July 21, 2022 (“the Manual”) states “Procurement shall be made using one of the following methods: 1) Micro and Small Purchase Threshold; 2) Competitive Sealed Bids and Competitive Negotiations and 3) Non-Competitive Negotiations. All methods of procurement, when funded by federal grants or contracts, must follow procurement requirements contained in the OMB, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for federal awards. Any purchases over $10,000 must bid competitively if subject to a single federal audit.” In addition, the Manual states “purchases related to Federally funded grants over $10,000 will be bid through either a Request for Proposal (RFP) or Request for Qualifications (RFQ) process. In addition, Request for Information (RFI) process may be used to help inform the development of either RFP, RFQ or other forms of procurement. Awards will be awarded to responses that meet the outlined criteria and reflect the lowest responsible bid. Contractors will be excluded from conducting business with the SDA if the contractor has been debarred and/or suspended from conducting business with the federal government. On a regular basis, the SDA will check vendors for any debarment status change on the federal System for Award Management (SAM). All source documents supporting any given transaction (e.g., receipts, invoices, and RFP data) will be retained and filed with SDA contract files in a centralized location. At a minimum, source document data must be sufficient to establish the basis for selection, the basis for the cost (including the reasonableness of cost), the rationale for the method of procurement and selection of contract type, and the basis for payment.” Condition During the current audit period, SDA did not adequately ensure federally funded contract issued to vendors followed federal regulations and its internal policy, which includes maintaining documents to support its procurement decisions. Cause Based on our discussions with management, SDA completed the RFQ process for this vendor but did not maintain the documentation of the decision-making process and scoring as outlined in its procurement policy. The documentation was deleted by a staff member who left the organization. Effect The failure to maintain adequate documentation to support the procurement of federally funded contracts is a violation of federal regulations. Questioned Costs None. Context During the test of procurement, SDA management identified two contracts with expenditures over the $10,000 threshold requiring competitive bid per its internal policy. For one contract, management noted that procurement was completed in 2021, hence outside the audit period. For the second contract, we noted that while an RFQ was obtained from the contractor, there was no evidence to support the basis for contractor selection (based on evaluation criteria and scoring outlined in the RFQ), the basis for the contract price, and evidence that debarment/suspension verification checks were performed prior to awarding the contract. Identification of Repeated Findings None. Recommendation We recommend that SDA’s management adhere to its written policy and maintain documentation to support all management decisions related to federally funded procurements to comply with federal regulations. Also, SDA should consider creating a checklist/internal form to document its procurement decisions and related approvals, as required. We also recommend that SDA develop procedures to identify all federally funded contracts let/awarded during the fiscal year to ensure compliance with its internal policy. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–004: Reporting Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria The Subrecipient Agreement for American Rescue Plan Act- State and Local Fiscal Recovery Funds between Cook County, Illinois (the County) and SDA, Exhibit A – Scope of Work states SDA shall provide performance and financial metrics and reports to the County on a monthly basis or as determined by the County and outlined in reporting and metrics sections of this agreement. Per the agreement, invoice (expense) submission is due at the end of each month and/or if funds are received in advance, the submission is due within one month of the expenditure. In addition, monthly performance (impact metrics) reporting of data will take place on the 15th day of each month following the reporting period in which it is applicable. The following program metrics will be collected and provided to the County in the following categories: 1) Client Service Metrics; 2) Develop annual survey to capture Business Growth Metrics; 3) Develop annual survey to capture Capital Metrics; 4) Marketing and Outreach Metrics; and 4) Financial Reporting. The 2022 Amendment to the Subaward and Fund Distribution Memorandum of Understanding (MOU) agreement dated December 15, 2021 between the Women’s Business Development Center (WBDC) and SDA states a provider seeking expense reimbursement shall provide supporting documentation at the end of each month with WBDC or Next Street for each expense item. The second amendment to the MOU covering the period beginning April 1, 2022 to November 30, 2026, states that invoice shall be submitted for review by August 12 for April through June expenses, October 14 for July through September expenses, and December 9 for October through November expenses. Condition During the current audit period, SDA did not comply with the reporting requirements outlined in its grant agreements. Cause Based on our discussions with management, this finding occurred due to staff turnovers and management’s oversight as proper reminders were not set up at commencement of the grant agreement(s). Effect Failure to submit reports in a timely manner impairs the grantor agency’s ability to monitor program activities and could result in the loss of grant funding. Also, the failure to maintain adequate supporting documentation could result in inaccurate reporting and is a violation of grantor(s) reporting requirements. Questioned Costs None. Context During our test of monthly and quarterly reports submitted under the program, we reviewed a total of eight reports (six monthly reports from the two County grant agreements and two quarterly reports from the WBDC grant agreement). We noted that seven reports were submitted late, ranging from six to 195 days late. Also, for five of the six County grant reports above, we were unable to obtain evidence to support the completion and submission of the performance reporting metrics. Based on our current year walkthrough and discussions with SDA management, we noted that SDA utilized the Salesforce system to track, report and submit information related to these performance metrics. However, a copy of the Data Collection Form after submission was not maintained on file. Identification of Repeated Findings Repeated (Prior Finding No. 2020-003, 2021-003). Recommendation We recommend that SDA implement procedures to ensure required reports are prepared, reviewed and submitted in a timely manner and in compliance with its grant agreements. Additionally, adequate documentation should be appropriately maintained to support all reports prepared and submitted under the grant agreements. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–002: Internal Controls over Allowable Costs Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity. Condition During the current audit period, SDA did not maintain adequate controls over allowable costs related to its federally funded program. Cause Based on our discussions with management, this finding occurred due to staff turnovers. This resulted in consistent documentation not maintained to support the approval of invoices and related expenditures charged to the program. Effect The failure to maintain adequate documentation to verify that expenditures are properly reviewed and approved and to maintain adequate supporting documentation to ensure all payroll expenditures are reasonable and properly reviewed is a violation of federal regulations, which could result in unallowed costs being charged to the federally funded program. Questioned Costs We noted total questioned costs of $2,666. Context During our review of 45 expenditures (from a 326 population), we noted seven expenditures had no evidence of invoice approval prior to payment. From our review of these expenditures and related invoices, we did not note any costs that were deemed to be unallowed per the grantor(s) requirements and federal regulations. During our test of payroll, we noted two employees were charged to the grant with expenditures totaling $4,833. For one employee tested, we noted no evidence, such as time and effort reporting, to determine whether the employee worked on this grant and to support the amount of $2,666 charged to the program. Identification of Repeated Findings Repeated (Prior Finding No. 2021-002, 2020-002). Recommendation We recommend that SDA implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–003: Procurement Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.318, General procurement standards (a) states “the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in Section 200.317 through 200.327.” Section 200.318 (i) states “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” SDA’s Fiscal Policies and Procedures Manual updated July 21, 2022 (“the Manual”) states “Procurement shall be made using one of the following methods: 1) Micro and Small Purchase Threshold; 2) Competitive Sealed Bids and Competitive Negotiations and 3) Non-Competitive Negotiations. All methods of procurement, when funded by federal grants or contracts, must follow procurement requirements contained in the OMB, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for federal awards. Any purchases over $10,000 must bid competitively if subject to a single federal audit.” In addition, the Manual states “purchases related to Federally funded grants over $10,000 will be bid through either a Request for Proposal (RFP) or Request for Qualifications (RFQ) process. In addition, Request for Information (RFI) process may be used to help inform the development of either RFP, RFQ or other forms of procurement. Awards will be awarded to responses that meet the outlined criteria and reflect the lowest responsible bid. Contractors will be excluded from conducting business with the SDA if the contractor has been debarred and/or suspended from conducting business with the federal government. On a regular basis, the SDA will check vendors for any debarment status change on the federal System for Award Management (SAM). All source documents supporting any given transaction (e.g., receipts, invoices, and RFP data) will be retained and filed with SDA contract files in a centralized location. At a minimum, source document data must be sufficient to establish the basis for selection, the basis for the cost (including the reasonableness of cost), the rationale for the method of procurement and selection of contract type, and the basis for payment.” Condition During the current audit period, SDA did not adequately ensure federally funded contract issued to vendors followed federal regulations and its internal policy, which includes maintaining documents to support its procurement decisions. Cause Based on our discussions with management, SDA completed the RFQ process for this vendor but did not maintain the documentation of the decision-making process and scoring as outlined in its procurement policy. The documentation was deleted by a staff member who left the organization. Effect The failure to maintain adequate documentation to support the procurement of federally funded contracts is a violation of federal regulations. Questioned Costs None. Context During the test of procurement, SDA management identified two contracts with expenditures over the $10,000 threshold requiring competitive bid per its internal policy. For one contract, management noted that procurement was completed in 2021, hence outside the audit period. For the second contract, we noted that while an RFQ was obtained from the contractor, there was no evidence to support the basis for contractor selection (based on evaluation criteria and scoring outlined in the RFQ), the basis for the contract price, and evidence that debarment/suspension verification checks were performed prior to awarding the contract. Identification of Repeated Findings None. Recommendation We recommend that SDA’s management adhere to its written policy and maintain documentation to support all management decisions related to federally funded procurements to comply with federal regulations. Also, SDA should consider creating a checklist/internal form to document its procurement decisions and related approvals, as required. We also recommend that SDA develop procedures to identify all federally funded contracts let/awarded during the fiscal year to ensure compliance with its internal policy. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.

Finding 2022–004: Reporting Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria The Subrecipient Agreement for American Rescue Plan Act- State and Local Fiscal Recovery Funds between Cook County, Illinois (the County) and SDA, Exhibit A – Scope of Work states SDA shall provide performance and financial metrics and reports to the County on a monthly basis or as determined by the County and outlined in reporting and metrics sections of this agreement. Per the agreement, invoice (expense) submission is due at the end of each month and/or if funds are received in advance, the submission is due within one month of the expenditure. In addition, monthly performance (impact metrics) reporting of data will take place on the 15th day of each month following the reporting period in which it is applicable. The following program metrics will be collected and provided to the County in the following categories: 1) Client Service Metrics; 2) Develop annual survey to capture Business Growth Metrics; 3) Develop annual survey to capture Capital Metrics; 4) Marketing and Outreach Metrics; and 4) Financial Reporting. The 2022 Amendment to the Subaward and Fund Distribution Memorandum of Understanding (MOU) agreement dated December 15, 2021 between the Women’s Business Development Center (WBDC) and SDA states a provider seeking expense reimbursement shall provide supporting documentation at the end of each month with WBDC or Next Street for each expense item. The second amendment to the MOU covering the period beginning April 1, 2022 to November 30, 2026, states that invoice shall be submitted for review by August 12 for April through June expenses, October 14 for July through September expenses, and December 9 for October through November expenses. Condition During the current audit period, SDA did not comply with the reporting requirements outlined in its grant agreements. Cause Based on our discussions with management, this finding occurred due to staff turnovers and management’s oversight as proper reminders were not set up at commencement of the grant agreement(s). Effect Failure to submit reports in a timely manner impairs the grantor agency’s ability to monitor program activities and could result in the loss of grant funding. Also, the failure to maintain adequate supporting documentation could result in inaccurate reporting and is a violation of grantor(s) reporting requirements. Questioned Costs None. Context During our test of monthly and quarterly reports submitted under the program, we reviewed a total of eight reports (six monthly reports from the two County grant agreements and two quarterly reports from the WBDC grant agreement). We noted that seven reports were submitted late, ranging from six to 195 days late. Also, for five of the six County grant reports above, we were unable to obtain evidence to support the completion and submission of the performance reporting metrics. Based on our current year walkthrough and discussions with SDA management, we noted that SDA utilized the Salesforce system to track, report and submit information related to these performance metrics. However, a copy of the Data Collection Form after submission was not maintained on file. Identification of Repeated Findings Repeated (Prior Finding No. 2020-003, 2021-003). Recommendation We recommend that SDA implement procedures to ensure required reports are prepared, reviewed and submitted in a timely manner and in compliance with its grant agreements. Additionally, adequate documentation should be appropriately maintained to support all reports prepared and submitted under the grant agreements. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.