Delayed Completion and Submission of Single Audit (Finding 2024-003) Federal Program(s): Highway Planning and Construction Assistance Listing Number: 20.205 Federal Agency / Pass-Through Village: Department of Transportation/Illinois Department of Transportation Compliance Requirement: Reporting Questioned Costs: None Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires a non-federal entity that expends $750,000 or more in federal awards during its fiscal year to have a Single Audit or program-specific audit conducted for that year in accordance with the provisions of Subpart F. The audit must be completed and submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Village did not complete and submit its Single Audit for the fiscal year ended December 31, 2024, within the required timeframe. Management determined that the Village had expended federal awards in excess of the Single Audit threshold only after the required audit planning and reporting timeline had been delayed. Context: The delay occurred because the Village’s grant tracking process/system did not allow management to separately identify, classify, and monitor federal grant awards and expenditures apart from state grant awards and expenditures. As a result, management did not timely determine whether the Village met the federal expenditure threshold requiring a Single Audit for the fiscal year ended December 31, 2024. VILLAGE OF ORLAND PARK, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) For the Year Ended December 31, 2024 Section III - Federal Award Findings and Questioned Costs (Continued) SIGNIFICANT DEFICIENCY (Continued) Delayed Completion and Submission of Single Audit (Finding 2024-003) (Continued) In addition, management is responsible for establishing and maintaining effective internal controls over federal awards, including controls designed to ensure that federal awards are properly identified, recorded, monitored, and reported. Effective controls should enable management to distinguish federal awards from non-federal awards, track federal expenditures by program and Assistance Listing number, and timely determine whether Single Audit requirements apply. Cause: The Village did not have an adequate grant tracking process/system in place to identify and monitor federal awards separately from state awards. Specifically, the grant tracking records did not consistently include key federal award information, such as Assistance Listing numbers, federal agency or pass-through Village names, award identification numbers, and cumulative federal expenditures by program. As a result, management did not have sufficient information available during the fiscal year-end close and audit planning process to timely determine whether total federal expenditures exceeded the Single Audit threshold. The Village also did not have a formal review process to evaluate grant funding sources and determine Single Audit applicability before the federal reporting deadline. Effect: Because the Village did not timely identify that it was subject to Single Audit requirements, the Single Audit for the fiscal year ended December 31, 2024 was not completed and submitted by the required deadline. The lack of an effective grant tracking process also increases the risk that federal awards may not be properly identified, monitored, or reported; that compliance requirements may not be timely evaluated; and that future Single Audit requirements may not be identified and met. Recommendation: It is recommended that the Village prepare schedules to assist in tracking activity for all grants awarded, including information such as costs incurred, revenues received, reimbursement requests submitted, which will allow the Village to have a better understanding of the status of each of its significant grant programs. These schedules can be used to reconcile to the Village’s accounting system to ensure revenue is properly recognized. Views of Responsible Officials: Management agrees with the finding and has implemented new grant tracking procedures.