Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.
Finding 2023-001 – Controls over Grant Reporting and Monitoring (Repeat Finding)
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: Illinois Department on Aging
Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053)
Requirement: Allowable Costs and Reporting
Criteria:
To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance to all grant requirements.
Condition:
During the course of our audit, we noted that the Agency is not performing regular reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, we were not able to determine that the Agency is reconciling the reported amounts to the underlying financial documentation on a regular or cumulative basis. Furthermore, there were multiple grant reports that were not submitted by the required deadline. Additionally, it was observed that personnel activity reports were not completed for all employees as required by certain grant agreements. We also noted that no compliance review is being performed to ensure adherence to all grant requirements.
Cause:
There is currently no reconciliation process being maintained for each of the various grant sources. The Agency
continues to improve in this area from the prior years, however, a formal reconciliation is not being performed. Due to the volume of grant reports required to be submitted, it makes the grant reporting process more difficult to maintain. Regarding personnel activity reports, supporting documentation is not available for all employees’ actual time spent and charged to the grants. We also were not able to obtain any monitoring documentation indicating that a formal process has been developed to ensure grant compliance.
Effect:
Without timely reconciliations, personnel activity reports, and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reporting and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor.
Recommendation:
We recommend that the Agency develop written procedures that require all grant reports are reconciled to the internal accounting records prior to submission. This reconciliation should be presented in a clear and concise manner to enable another party to review and approve before ultimately submitted it to the grantor. This should be attainable as each grant is coded separately in the accounting system. Additionally, we recommend the Agency implement that all employees submit personnel activity reports to provide documentation of their time that is reimbursed by each grant. We also recommend that the Agency require a periodic review of the adherence to the various grant compliance requirements and note such a review was performed.
Response:
Procedures for reconciling grant reports on a quarterly basis have been developed. This includes a report created for each grant from the accounting system by the fiscal department. This report is available to be reviewed by the director or assistant director of the agency before being submitted to the grantor. A report comparing the cash request amountsmade to the grantor to the general ledger has been implemented effective October 31, 2023. A procedure has also been developed to periodically monitor adherence to various grant requirements, as well as the development of documentation to support personnel activity tied to grants. The fiscal department implemented these effective January 1, 2024. See Corrective Action Plan.