Audit 364306

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Uniform Guidance section 200.430(h)(8)(i) indicates that the standards for documentation of personnel expenses are such that (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 and (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. Furthermore, subsection (viii) indicates: Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;(B) Significant changes in the corresponding work activity are identified and entered into the records in a timely manner and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: During the first half of the fiscal year, the Organization was allocating payroll costs to grants based upon budgeted amounts/percentages submitted to the funding agency and did not have a system for ensuring that the estimates used produce reasonable approximations of the activity actually performed. Questioned Costs: Unknown Context: This condition affected fourteen (14) of forty four (44) payroll transactions selected for testing, representing eleven different employees. Starting in January 2024, the Organization implemented a new software whereby it was able to track, monitor and review time and effort associated with payroll costs. Cause: During the first half of the fiscal year the Organization had a tracking system in place to monitor the wages by employee charged to federal grants to avoid over-allocation of individual employee wages, but this tracking system did not contain a process for allocating wages based on actual time and effort. Effect: Inaccurate payroll costs may be charged to federal programs if the Organization does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: Yes, prior year finding number was 2023-003. Recommendation: Management should review and refine its process of tracking payroll costs by federal grants to ensure that these costs are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, are allowable and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee’s wages among specific activities or cost objectives if the employee woks on more than one federal award. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $7,311 Context: Four (4) of the twenty (20) transactions selected for testing. Cause: Oversight. Effect: The Organization may allocate unallowable costs to the federal grant. Repeat Finding: Yes, prior year finding number was 2023-004 Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review and so that costs for which some or all are from outside of the period of performance, may be appropriately excluded from the federal grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: As described in § 200.403, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time. Condition: The Organization incorrectly calculated indirect costs for one of thirteen transactions selected for testing. Questioned Costs: $41 Context: The Organization calculates the indirect costs to be reimbursed based on total direct expenses less contractual services. For one of the thirteen transactions selected for testing, the indirect cost was not calculated correctly. Cause: Oversight. Effect: The Organization requested reimbursement for indirect costs in excess of their provisional rate of 28.28%. Repeat Finding: No Recommendation: We recommend management recalculate the indirect cost rate based on the monthly grant invoice submitted to the funder for reimbursement to ensure indirect costs are appropriate. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: § 200.303(a) indicates non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization requested reimbursement for duplicate pay periods in a single month. Questioned Costs: None Context: In July 2023, the Organization requested reimbursement for pay date July 7, 2023 twice rather than pay dates July 7, 2023 and July 21, 2023. The net effect resulted in Trilogy requesting reimbursement for $118 less in payroll costs than what it could have requested. Cause: Oversight. Effect: Inaccurate payroll costs charged. Repeat Finding: No Recommendation: We recommend the Organization review the pay periods supporting the personnel costs that are charged to the grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Uniform Guidance section 200.430(h)(8)(i) indicates that the standards for documentation of personnel expenses are such that (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 and (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. Furthermore, subsection (viii) indicates: Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;(B) Significant changes in the corresponding work activity are identified and entered into the records in a timely manner and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: During the first half of the fiscal year, the Organization was allocating payroll costs to grants based upon budgeted amounts/percentages submitted to the funding agency and did not have a system for ensuring that the estimates used produce reasonable approximations of the activity actually performed. Questioned Costs: Unknown Context: This condition affected fourteen (14) of forty four (44) payroll transactions selected for testing, representing eleven different employees. Starting in January 2024, the Organization implemented a new software whereby it was able to track, monitor and review time and effort associated with payroll costs. Cause: During the first half of the fiscal year the Organization had a tracking system in place to monitor the wages by employee charged to federal grants to avoid over-allocation of individual employee wages, but this tracking system did not contain a process for allocating wages based on actual time and effort. Effect: Inaccurate payroll costs may be charged to federal programs if the Organization does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: Yes, prior year finding number was 2023-003. Recommendation: Management should review and refine its process of tracking payroll costs by federal grants to ensure that these costs are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, are allowable and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee’s wages among specific activities or cost objectives if the employee woks on more than one federal award. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition: Costs outside of the period of performance were charged to the grant. Questioned Costs: $7,311 Context: Four (4) of the twenty (20) transactions selected for testing. Cause: Oversight. Effect: The Organization may allocate unallowable costs to the federal grant. Repeat Finding: Yes, prior year finding number was 2023-004 Recommendation: Management should review and revise its process for allocating costs to federal grants to include additional layers of review and so that costs for which some or all are from outside of the period of performance, may be appropriately excluded from the federal grant. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: As described in § 200.403, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time. Condition: The Organization incorrectly calculated indirect costs for one of thirteen transactions selected for testing. Questioned Costs: $41 Context: The Organization calculates the indirect costs to be reimbursed based on total direct expenses less contractual services. For one of the thirteen transactions selected for testing, the indirect cost was not calculated correctly. Cause: Oversight. Effect: The Organization requested reimbursement for indirect costs in excess of their provisional rate of 28.28%. Repeat Finding: No Recommendation: We recommend management recalculate the indirect cost rate based on the monthly grant invoice submitted to the funder for reimbursement to ensure indirect costs are appropriate. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: 45CCB03514; 45CCB04278; 45CCB00648 Award Period: 07/01/2023 – 06/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: § 200.303(a) indicates non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization requested reimbursement for duplicate pay periods in a single month. Questioned Costs: None Context: In July 2023, the Organization requested reimbursement for pay date July 7, 2023 twice rather than pay dates July 7, 2023 and July 21, 2023. The net effect resulted in Trilogy requesting reimbursement for $118 less in payroll costs than what it could have requested. Cause: Oversight. Effect: Inaccurate payroll costs charged. Repeat Finding: No Recommendation: We recommend the Organization review the pay periods supporting the personnel costs that are charged to the grant. Views of responsible officials: There is no disagreement with the audit finding.