Audit 353312

Federal agency: U.S. Environmental Protection Agency Federal program title: Capitalization Grant for Clean Water State Revolving Funds Assistance Listing Number: 66.458 Federal Award Identification Number and Year: N/A Pass-Through Agency: Illinois Environmental Protection Agency Pass-Through Number: L176108 Award Period: March 27, 2023 – September 17, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 180 and 200.318) requires non-federal entities to have formal, documented policies and procedures for procurement and suspension and debarment to ensure transparency, consistency, and compliance with applicable laws and regulations. Condition: During our audit, we noted that the District does not have a formal, documented policy for procurement and suspension and debarment. This includes the absence of procedures for vendor selection, contract management, and criteria for suspension and debarment of vendors. Questioned costs: None Context: The organization operates in a highly regulated environment where procurement activities and vendor management are critical to operational success. Effective procurement policies ensure that the organization engages with qualified vendors, maintains compliance with regulatory requirements, and mitigates risks associated with vendor relationships. Suspension and debarment policies are essential to prevent engaging with vendors who have previously demonstrated non-compliance or unethical behavior. Cause: The District relies on their contractor to ensure vendors and purchases comply with regulatory guidelines. Effect: The absence of a formal procurement and suspension and debarment policy increases the risk of non-compliance with federal regulations. Without these policies, the entity may inadvertently engage in transactions with parties that are debarred, suspended, or otherwise excluded from federal programs. Additionally, the lack of structured procurement procedures can result in inefficient use of resources, increased costs, and potential conflicts of interest. Repeat finding: No. Recommendation: We recommend that the organization develop and implement a formal, documented policy for procurement and suspension and debarment. Views of responsible officials: Management agrees with the finding. The District will work on implementing a formal, documented policy for procurement and suspension and debarment.

Federal agency: U.S. Environmental Protection Agency Federal program title: Capitalization Grant for Clean Water State Revolving Funds Assistance Listing Number: 66.458 Federal Award Identification Number and Year: N/A Pass-Through Agency: Illinois Environmental Protection Agency Pass-Through Number: L176108 Award Period: March 27, 2023 – September 17, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 180 and 200.318) requires non-federal entities to have formal, documented policies and procedures for procurement and suspension and debarment to ensure transparency, consistency, and compliance with applicable laws and regulations. Condition: During our audit, we noted that the District does not have a formal, documented policy for procurement and suspension and debarment. This includes the absence of procedures for vendor selection, contract management, and criteria for suspension and debarment of vendors. Questioned costs: None Context: The organization operates in a highly regulated environment where procurement activities and vendor management are critical to operational success. Effective procurement policies ensure that the organization engages with qualified vendors, maintains compliance with regulatory requirements, and mitigates risks associated with vendor relationships. Suspension and debarment policies are essential to prevent engaging with vendors who have previously demonstrated non-compliance or unethical behavior. Cause: The District relies on their contractor to ensure vendors and purchases comply with regulatory guidelines. Effect: The absence of a formal procurement and suspension and debarment policy increases the risk of non-compliance with federal regulations. Without these policies, the entity may inadvertently engage in transactions with parties that are debarred, suspended, or otherwise excluded from federal programs. Additionally, the lack of structured procurement procedures can result in inefficient use of resources, increased costs, and potential conflicts of interest. Repeat finding: No. Recommendation: We recommend that the organization develop and implement a formal, documented policy for procurement and suspension and debarment. Views of responsible officials: Management agrees with the finding. The District will work on implementing a formal, documented policy for procurement and suspension and debarment.