Audit 369106

Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number 21.027 Federal Agency: U.S. Department of Treasury Pass-through Entity: Illinois Department of Human Services Condition: The Organization does not have documented procurement policies that address all required federal standards, including conflict-of-interest disclosures, thresholds for competitive bidding, and vendor suspension/debarment checks. Criteria: 2 CFR §§200.318–200.320 require non-federal entities to use documented procurement procedures consistent with federal standards, including conflict of interest, competitive procurement thresholds, and vendor responsibility checks. Cause: Lack of awareness of Uniform Guidance procurement standards and incomplete written policies. Effect: SCC risks awarding contracts that are not allowable or are subject to disallowance under federal regulations. Questioned Costs: None noted during audit testing. Auditor’s Recommendation: The Organization should revise and implement procurement policies and procedures that meet all requirements of 2 CFR 200 and train staff accordingly.

Federal Program: Coronavirus State and Local Fiscal Recovery Funds- Assistance Listing Number 21.027 Federal Agency: U.S. Department of Treasury Pass-through Entity: Illinois Department of Human Services Condition: The Organization has not established written procedures to identify, assess risk of, monitor, or accurately track amounts provided to subrecipients of ARPA funding. No subrecipient notification letters were issued to entities receiving subawards, and the Organization could not provide complete and accurate records of the amounts passed through to subrecipients during the audit period. Criteria: 2 CFR §200.331 requires pass-through entities to evaluate subrecipient risk, ensure each subaward is properly identified, issue required subaward notifications, verify suspension/debarment status, monitor subrecipient activities, and ensure subrecipients meet audit requirements. 2 CFR §200.302 further requires non-federal entities to identify, in their accounts, all federal awards received and expended, including amounts provided to subrecipients, to ensure accurate financial reporting and SEFA disclosure. Cause: Lack of formal policies and training regarding pass-through responsibilities under Uniform Guidance. Effect: The Organization cannot demonstrate compliance with federal pass-through requirements. This increases the risk of unallowable costs, subrecipient noncompliance, and misstated SEFA reporting due to the inability to determine and disclose amounts passed through to subrecipients . Questioned Costs: None noted during audit testing. Auditor’s Recommendation: The Organization should adopt written subrecipient monitoring and tracking policies, perform risk assessments, issue subaward notifications with all required elements, and implement procedures to accurately record and disclose the amounts provided to subrecipients in the general ledger and SEFA.

Federal Program: Coronavirus State and Local Fiscal Recovery Funds- Assistance Listing Number 21.027 Federal Agency: U.S. Department of Treasury Pass-through Entity: Illinois Department of Human Services Condition: The Organization does not track federal award expenditures separately in its general ledger. ARPA expenditures are commingled with other organizational expenses, making it difficult to directly reconcile federal activity to the SEFA or supporting records. Criteria: 2 CFR §200.302 requires non-federal entities to identify, in their accounts, all federal awards received and expended, and the federal programs under which they were received. The financial management system must provide for accurate, current, and complete disclosure of the financial results of each federal award. Entities must be able to identify federal awards separately by Assistance Listing number. Cause: The Organization has not implemented an accounting system or chart of accounts structure that captures federal awards separately by Assistance Listing number. Effect: Without separate identification of federal award expenditures, the Organization cannot readily demonstrate allowability of costs, reconcile SEFA expenditures to its accounting system, or ensure compliance with federal cost principles. This increases the risk of misstated SEFA reporting, unsupported expenditures, or disallowed costs. Questioned Costs: None specifically identified during audit testing; however, the lack of a tracking mechanism impairs the Organization’s ability to fully support ARPA expenditures. Auditor’s Recommendation: The Organization should establish accounting procedures to ensure federal award expenditures are tracked separately in the general ledger by Assistance Listing number and by grant. The Organization should reconcile grant expenditures recorded in the general ledger to reimbursement requests and the SEFA on a regular basis.