Audit 408618

2025-002: Approval of Expenditures not maintained - Significant Deficiency Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance – Allowable Costs (General Disbursements) Federal Agency: Chicago Department of Public Health Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number: 1217907 Award Period: January 1, 2023 to December 31, 2025 Criteria: Under 2 CFR 200.303, the Organization is required to establish, document and maintain effective internal controls over federal awards. Condition and Context: A sample of expenses was selected to test internal control over compliance and compliance with allowable costs/cost principles. Out of the items selected for testing, we noted insufficient documentation of approval on 1 out of 40 expenses selected for testing. Cause: The Organization has fiscal policies and procedures to require written approval, however they were not followed in the instance identified. Effect: The failure to document approvals for expenses could lead to unallowable costs being disbursed on grant awards. Questioned Costs: None identified. Repeat Finding: No. Recommendation: We recommend that management reinforce adherence to the Organization's existing expenditure review and approval and documentation requirements; provide training, as needed; implement monitoring activities or periodic review to evaluate compliance; and consider implementing additional preventive controls (for example, system-based approval requirements) to help prevent payments from being processed without appropriate authorization and supporting documentation. Views of Responsible Officials and Planned Corrective Action: See corrective action plan.

2025-003: Supporting Timecards not Maintained - Significant Deficiency Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance – Allowable Costs (Payroll) Federal Agency: Chicago Department of Public Health Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number: 1217907 Award Period: January 1, 2023 to December 31, 2025 Criteria: Under 2 CFR 200.430, charges to federal awards for salaries and wages must be supported by records that accurately reflect the work performed, are incorporated into the official records of the non-federal entity, and are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. In addition, 2 CFR 200.203 requires the Organization to establish and maintain effective internal control over federal awards. Consistent with these requirements, entity policy requires contemporaneous time and effort records for all employees whose salaries are charged to federal awards. Condition and Context: The auditor tested 27 payroll items for the audit period and identified 3 exceptions related to missing timecards for 3 employees for the June 30 pay period. As a result, the Organization was unable to provide complete contemporaneous support for certain payroll costs charged to the federal award. The exceptions identified in the sample indicate that the entity’s controls over payroll documentation were not fully effective for the period under audit. Cause: The Organization’s controls over the preparation, retention, and retrieval of payroll time and effort documentation did not operate effectively for the affected pay periods. Based on available information, required records were either not maintained in accordance with policy or were not retained and retrievable within the Organization’s official records. Effect: Because required supporting documentation was not available, certain payroll costs charged to the federal program could not be fully substantiated as accurate, allowable, and properly allocated to the award. Unsupported payroll costs may be subject to disallowance, and the control deficiency increases the risk that additional payroll charges to the program may not be adequately supported. Questioned Costs: Unknown Repeat Finding: No. Recommendation: We recommend the Organization should strengthen controls over payroll documentation for employees whose compensation is charged to federal awards and maintain payroll support in an organized and retrievable manner within the Organizations records. Views of Responsible Officials and Planned Corrective Action: See corrective action plan.