Audit 390479

2025 – 003 – Procurement Federal Agency: Environmental Protection Agency Federal Program Name: Drinking Water State Revolving Fund Assistance Listing Number: 66.468 Federal Award Identification Number and Year: 4D01E03247-2025; FS098577724-2025 Pass Through Agency: Illinois Environmental Protection Agency Pass Through Number: L175866 Award Period: May 1, 2024 – April 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition: During our audit, we identified that the Village did not comply with, or establish adequate internal control over compliance with, federal procurement requirements as mandated by Uniform Guidance. Criteria or specific requirement: Non-federal entities are required by Uniform Guidance to comply with, and to establish and maintain effective internal control over compliance with, federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance requires written policies in regards to procurement with federal grant funds, as well as written policies in regards to conflicts of interest. Context: During our testing, it was noted the Village did not have a formal procurement policy. Questioned Costs: None Effect: Lack of compliance, and lack of internal control over compliance, could result in potentially leading to penalties or loss of federal funding. Cause: The Village does not have a formal procurement policy. Management relied on informal practices and professional judgment rather than documented standards. Repeat Finding: No Recommendation: We recommend that the Village Board develops, formally adopts, and implements written conflict of interest and procurement policies to align with Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.