Audit 414000

Finding 2025-001 Equipment and Real Property Management Information on the federal program: Federal Agency: United States Department of Health and Human Services ALN: 93.889 National Bioterrorism Hospital Preparedness Program Pass-Through Grantor: Illinois Department of Public Health and Illinois Health and Hospital Association Pass-Through Award Number: 57280009M; 67280009N; 47280009L; 47280007L; 57280009M Pass-Through Award Period: 7/1/2023 to 6/30/2026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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). Section 200.313(d)(1) and (2) states, “Regardless of whether equipment is acquired in part or its entirety under Federal award, the recipient or subrecipient must manage equipment (including replacement equipment) utilizing procedures that meet the following requirements: Property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contributions towards the original purchase, the location, use and condition of the property, and the disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. Section III – Federal Award Findings and Questioned Costs (continued) Condition: The System did not retain property records documenting the appropriate criteria required by Section 200.313(d)(1) and (2). Cause: The System did not have sufficiently designed internal controls to ensure that property records are retained in accordance with Section 200.313(d)(1) and (2). Effect or potential effect: Federal equipment may not be maintained or disposed of in accordance with federal regulations. Questioned Costs: $8,481 Context: We tested a sample of six items from the equipment listing related to the federal program for the period January 1, 2025 through December 31, 2025. For one item selected for testing, the serial number listed on the item was not recorded in the property records to ensure the asset was appropriately designated for use in accordance with the requirements of the grant. For one item selected for testing, the item was unable to be physically located. The total National Bioterrorism Hospital Preparedness Program expenditures reported on the Schedule are $882,827 for the year ended December 31, 2025. The net book value of all assets related to this federal program was $161,020. The net book value of the assets with exceptions identified was $8,481. Identification as a repeat finding, if applicable: This is a repeat finding of 2024-005 from the prior year. Recommendation: The System should implement more robust internal controls to ensure that accurate property records are maintained. Section III – Federal Award Findings and Questioned Costs (continued) Views of responsible officials: Management agrees with the finding and will ensure that the enhanced procedures and monitoring controls already in place are consistently followed to ensure that equipment acquired with Federal grant funds is accurately recorded, properly tracked, and supported by property records that are maintained and retained in accordance with 2 CFR § 200.313(d)(1) and (2). The Program team is responsible for ensuring that physical inventories are conducted at least every two years, reconciled to the applicable property records, and that any discrepancies identified are investigated and resolved in a timely manner. These corrective actions will strengthen internal controls over federally funded equipment and support continued compliance with applicable Federal requirements.

Finding 2025-002 - Procurement and Suspension and Debarment Information on the federal program: Federal Agency: United States Department of Health and Human Services ALN: 93.889 National Bioterrorism Hospital Preparedness Program Pass-Through Grantor: Illinois Department of Public Health and Illinois Health and Hospital Association Pass-Through Award Number: 57280009M; 67280009N; 47280009L; 47280007L; 57280009M Pass-Through Award Period: 7/1/2023 to 6/30/2026 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions Section III – Federal Award Findings and Questioned Costs (continued) of the Federal award. These internal controls should align with the 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). Section 200.318(j) states, “The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The System did not retain procurement records documenting the appropriate criteria required by Section 200.318(j). Cause: The System did not have sufficiently designed internal controls to ensure that procurement records are retained in accordance with Section 200.318(j). Effect or potential effect: Federal procurement and suspension and debarment transactions may not be in compliance with federal regulations. Questioned Costs: $175,509 Context: We tested six samples representing 100% of the procurement population relating to the federal program for the period January 1, 2025 through December 31, 2025. For all six items, there was no evidence of procurement records supporting the type of procurement method used. The total National Bioterrorism Hospital Preparedness Program expenditures reported on the Schedule are $882,827 for the year ended December 31, 2025. The procurement population related to this federal program was $175,509. Section III – Federal Award Findings and Questioned Costs (continued) Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: The System should implement more robust internal controls to ensure that accurate procurement records are maintained. Views of responsible officials: Management agrees with the finding and will strengthen internal controls over procurement documentation. The Program team will receive refresher training to ensure required records for federally funded purchases are complete, properly maintained, and retained in accordance with Federal requirements. Management will conduct periodic monitoring to verify compliance and address any deficiencies timely.