Corrective Action Plans

We will implement a review process to confirm all corrections before submitting claims for reimbursement. This will ensure compliance with the 60-day claim submission requirement and accurate record-keeping, guarenteeing that Program funds are spent soley on allowable Child Nutrition Program costs.

2023-002: Cash Management-Subrecipient Federal Program Title: Research and Development Cluster Assistance Listing Number: Various Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Recommendation: ISU should evaluate its procedures and implement an additional control to review and approve the subrecipient reimbursements timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Grant accounting staff will follow payment requests through the system to make sure payments are made in a timely manner. Name(s) of the contact person(s) responsible for corrective action: Kirsten Broughton, Director Grant Accounting Planned completion date for corrective action plan: Implemented in FY24

• Description – Program staff do not prepare a reconciliation of amounts received for a given month with what was actually disbursed on a monthly basis. • Views of Responsible Officials and Planned Corrective Action – Kathy has created an excel report to reconcile the amounts received to what was disbursed. The reconciliation will be maintained on a monthly basis. • Names and Title of Responsible Official – Kathy Sabitsky, Finance Manager • Anticipated Completion Date – This was implemented during fiscal year 2024.

Name of Contact Person: Ben Godwin, Director. Recommendation: We recommendthe Center verify a vendor's status by checking the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000. Corrective Action: We will verify all vendors' status using the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000. Proposed Completion Date: Immediately.

All future federal grant programs that require substantial lines of information and calculations to be submitted for reimbursement of allowable costs will be reviewed by at least two qualified persons before submission to the administering agency (e.g. IDHS)..

No action needed. Required deposit of $1,971 was deposited into the residual reserve account on March 4, 2024.

Management will review all draw down requests and tracking of overall payroll costs billed to the program to ensure employees are not billed more than once for the same period. The overpayment finding is being refunded to the funder.

Maintain detailed documentation of the review process, including any findings or discrepancies identified during the review of drawdowns. Establish clear review procedures for the drawdowns prepared by the Assistant Controller. Continuously monitor the effectiveness of the review process and identify areas for improvement. Implement any necessary changes or enhancements to the review procedures to ensure thorough compliance with grant requirements.

COIVD-19: Coronavirus State and Local Fiscal Recovery – Assistance Listing No. 21.027 Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained. Explanation of disagreement with audit finding: There is no disagreement with this finding. Action taken in response to finding: The organization will review this finding and current methodology and propose corrections as part of a broader review of its technologies. Name of the contact person responsible for corrective action: Silvia Zelaya, Finance Director Planned completion date for corrective action plan: January 2025

It was discovered that our financial institution was pledging securities based on book value and not on market value which led to the deposits not being fully collateralized according to HUD requirements and State Statutes. The Authority will review the collateral reports at least quarterly to determine that pledging requirements are adequate to ensure compliance in the future.

Finding 2023-002: Allowable costs – significant deficiency in internal controls over compliance and compliance finding. Management Response All submissions of expenses reimbursed by grants will require review by the Controller or the COO, in the Controller’s absence, to ensure that expenditures charged to the grants agree to the original documents (invoices or receipts) prior to submission or charging to a specific grant.

Finding 2023-001: Allowable costs – material weakness in internal controls over compliance and compliance finding. Management Response All submissions of 􀆟mesheets and payroll reimbursed by grants will require review by the Controller or the COO, in the Controller’s absence, to ensure that expenditures charged to the grants agree to the original 􀆟mesheets or payroll prior to submission or charging to a specific grant

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure funds are disbursed for expenditures incurred prior to requesting reimbursement and that expenditures are incurred within the contract’s performance period.

The Organization will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2024 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist. • The Organization’s Human Resources has implemented quarterly audits on all new staff to verify each new staff member hired within the last year has a signed employee offer and appropriate backup support to support each employee’s annual salary. • The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • The Organization has implemented a new payroll and human resources IT solution – UKG. All manual and onboarding processes will be implemented within the system for tracking and auditing purposes. The anticipated implementation date is in August 2024. • The Organization will implement an established month-end checklist for all monthly entries to be completed by assigned finance staff. We will ensure that all staff are trained adequately to handle any assigned task. All monthly entries are required to be reviewed and approved by the Chief Financial Officer prior to posting to the general ledger within our new Accounting Software. All appropriate backup documentation will be saved and stored within the accounting software. • All grant related year-end audit procedures will be transitioned to the Grant Accountant who has experience with audits, compliance, and reporting for City, State, and Federal grants. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the financial statements and supplementary information. The target date for implementation is August 31, 2024. The responsible party for the planned resources will be Gail Vijuk, Chief Financial Officer (708) 288-7897. Our address is 340 E. 51st St., Chicago, IL 60615.

Management will prepare the surplus cash calculation in a matter timely enough to ensure any required deposit to the residual receipts account is made within 90 days of year-end.

For any construction or building improvements requiring the use of contractors in the future, management will discuss adherence to the Davis Bacon Act regarding prevailing wages with the contractors and obtain documentation from the contractors demonstrating compliance with the Act.

CORRECTIVE ACTION PLAN Summary Schedule of Current Year Audit Findings In accordance with Title 2 CFR 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements under Section 200.511, Audit Findings follow-up, the following detail the summary of current year audit findings (and the related corrective action plan) is presented below: Finding 2023-001: Inadequate Financial Reporting Condition: The tracking of eligible (billable) costs within the accounting system was inadequate and required a significant amount of work to generate reconciliations of billable costs to contract billings. In additional certain grants were inconsistently reflected as restricted or conditional compared to similar grants. As part of the process to review year end, management identified errors which required adjustments, the most common of which was adjusting revenue between restricted and conditional revenue. Criteria: CFR 200.303, Internal Controls, states that the non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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). Additionally, management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Cause: The Organization did not have in place a formal, clear system which reconciled the billings to the funders and related eligible costs or releases related to certain restricted grants. Effect: Significant adjustments were proposed by management during the audit, principally between conditional and restricted revenue. Recommendation: We strongly recommend that all costs are coded directly to a contract within the accounting system and on a monthly or quarterly (at a minimum) basis there is a reconciliation of the billings between the funders and the revenue/costs related to the contracts to assure that all costs have been capture for billings and releases from restrictions. We also recommend detailed reviews/approvals of such reconciliations be performed. Questioned Costs: None identified. Context: While performing initial audit procedures, we requested management to perform a reconciliation of billings and related costs and review its recording of restricted and conditional grants. During management review, errors were identified by management and requested to be corrected. The condition noted is deemed to be systemic in nature. We did not identify any misstatements during our audit once the review was completed by management. Identification as a Repeat Finding: This is not a repeat finding. Management Views and Corrective Action Plan: Management agrees with the finding and recommendation. The Organization implemented a new accounting system effective July 1, 2023, in which substantially all costs are now coded to respective contracts which will provide much easily generatable support for billings. Management is working with the accounting team to implement a new process as part of the monthly closing procedures in which for cost reimbursement contacts there will be a review of revenue compared to costs to ascertain that the billing is accurate and complete. Name and Title of Responsible Official: Eos de Feminis, Interim CFO Planned Completion Date: Completed

Corrective Action Plan: Review and approval of invoices, meal count sheets, and reimbursement requests will be more closely monitored, and leadership will continue to engage and teach agency staff to follow existing policies to assure compliance. No further policy revisions are necessary. Staff training will be strengthened. Responsible Individuals: Dr. Kenneth D. Varble – Vice President of Accounting Anticipated Completion Date: December 2024

Condition - The School District incorrectly reported expenditures on its reimbursement requests and final expenditures reports to the State. This resulted in the School District not providing accurate information to the State that is used to determine if grant money was expended in accordance with the original or amended grant application. Recommendation - That the School District should review their internal controls and establish procedures to ensure that reports comply with 2 CFR section 200.328 and ensure proper reporting by ESSER Subgrant fund, expenditure category, and object code. Method of Implementation - Accounts Payable will review all purchase orders (P.O.s) on a monthly basis for accuracy, using a checklist provided by the Business Administrator. Person Responsible for Implementation - AP Specialist / ABA / SBA Implementation Date - April 1, 2024

Contact Person Rhonda Zastoupil, Business Manager Planned Corrective Action The Business Manager will review the monthly reimbursement reports and supporting data prepared by Business Office staff for accuracy and sign off on the reimbursement request prior to submittal to the Department of Public Instruction. Planned Completion Date Immediately

The delinquent deposit will be made Tuesday May 21, 2024. In the future, the calculation will be done in February and if there is surplus cash, the funds will be deposited within the required time period.

Management will work with the Government Affairs’ department to ensure that the food program and any other program invoices are being put into Sage Intacct on a timely manner so that the invoices are paid within 30 days. Responsible Person for Corrective Action: Marta Kwiatkowski, Vice President of Administration & Chief Financial Officer Implementation Date for Corrective Action: December 31, 2024

Finding 2023-003 – Significant Deficiency over Internal Controls Related to Cash Management Compliance - Human Genome Research - Enzyme Synthesis of RNA – 93.172 Recommendation: The Foundation should strengthen its controls related to the cash draw processes to ensure that grant funding only be submitted for reimbursement and cash draws once an expenditure has been made, regardless of anticipated expenditures. Corrective Action: In addition to the grants manager, another member of management will review the grant funding request prior to submission to ensure that it is appropriately supported with evidence of allocable and allowable costs incurred. Person Responsible for Corrective Action: Jackie McCarter, Grants Administrator, and another member of management Anticipated Completion Date for Corrective Action: The Corrective Action will be immediately implemented in response to the auditor’s recommendation.

Finding 2023-002 – Noncompliance with Cash Management Requirement – Human Genome Research - Enzyme Synthesis of RNA – 93.172 Recommendation: The Foundation should ensure that grant funding only be submitted for reimbursement and cash draws once an expenditure has been made, regardless of anticipated expenditures. Corrective Action: Grant funding will only be drawn in reimbursement of costs incurred for allocable and allowable costs incurred. Person Responsible for Corrective Action: Jackie McCarter, Grants Administrator Anticipated Completion Date for Corrective Action: The Corrective Action will be immediately implemented in response to the auditor’s recommendation.

Finding: 2023-002 Cash Management Department’s Response: We concur Corrective Action: As the finding mentioned, this issue was found in the previous audit and corrective action was taken at that time. No further instances have occurred since. Contact: Katrina Hitzeman Anticipated Completion Date: Immediately