Corrective Action Plans

Finding Number 2023-089 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action While documenting controls over subrecipient administrative expenditures for the ERA 1 and ERA 2 grants, we noted that OMES did not require the subrecipients to submit supporting documentation for administrative expenditures charged to the programs. Further, we determined one of the subrecipients, Communities Foundation of Oklahoma (CFO), did not have sufficient internal controls over administrative expenditures to ensure they were for allowable costs and activities. Community Foundation of Oklahoma 1. For 15 of 17, or 88.24%, of credit cards tested, the included at least one expenditure for unallowable costs. These costs also included gift cards. ($53,248.41 questioned costs) • We disagree with the finding and questioned costs as the amount for all mentioned questioned costs has been returned to the ERA program. CFO has also strengthened their internal controls and understanding to more accurately identify appropriate expenses to allocate to ERA Admin funds in the future. See attached Internal Controls. 2. For $28,661 of allowable credit card administrative expenditures, the expense was attributable to multiple jurisdictions and only 90.33% of the cost should have been charged to the State of Oklahoma; however, CFO was unable to support the proper allocation was completed and that 100% of the cost was not charged to the State. We determined we would question 9.67% of the allowable expenditures ($2,771.52 questioned costs), since the State paid for expenditures that were the responsibility of other jurisdictions. Note: all credit card transactions were ‘multi’ jurisdictions; however, the unallowable costs are questioned in the first bullet. • See response to 2023-028 - Second Condition and Context. 3. For 2 of 48, or 4.17%, of claims tested, the invoice was not itemized, and we were unable to determine if the administrative costs were allowable. ($32,589.33 questioned costs) • We disagree with the finding. Itemized invoices have been attached in Attachment “OneDrive_1_4_22-2025.zip” 4. For 3 of 48, or 6.25%, of claims tested, the costs were for services to non-profit Shelterwell, which is an organization that was formed by the Executive Director of Community Cares Partners (CCP) with CCP team members after CCP stopped accepting ERA applications. Shelterwell works with tenants and landlords to provide education and mediation between tenants and landlords but is not legally part of Communities Foundation of Oklahoma (CFO)/CCP and does not directly provide rental assistance. Therefore, all payments to Shelterwell do not directly support the administration of the ERA program and are not allowable administrative costs. ($3,847.90 questioned costs) • We partially agree in that the expenses listed for Shelterwell were incorrectly allocated to the Admin account. These expenses should have been expensed from their ERA2 Housing Stability grants. CFO has strengthened our internal controls and understanding to more accurately code and identify expenses, so they are expensed to the correct fund in the future. We partially disagree that the payments made to Shelterwell are unallowable. According to the 2024 ERA Compliance Supplement and FAQ 23, 10% of the funds under ERA1 and ERA2 may be used for housing stability services. The 2024 Compliance Supplement in describing Administrative Expenses, states, "Under ERA 1, a grantee may use up to 10 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services. Under ERA 2, a grantee may use up to 15 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services ..." This is also repeated in FAQ23. According to both 2024 Compliance Supplement and FAQ23, housing stability services include but are not limited to: eviction prevention and eviction diversion programs; mediation between landlords and tenants; housing counseling; fair housing counseling; housing navigators or promotors that help households access programs or find housing; case management related to housing stability; housing-related services for survivors of domestic abuse or human trafficking; legal services or attorney’s fees related to eviction proceedings and maintaining housing stability; and specialized services for individuals with disabilities or seniors that support their ability to access or maintain housing. Additionally, under FAQ 21, grantees may use ERA payments to make subawards to other entities, including nonprofit organizations and local governments, to administer ERA programs on behalf of the grantees. Therefore, payments to Shelterwell are allowable expenses b/c these non-profits provided services that fell under the allowable uses for Housing Stability Services and CFO was able to make a subaward to these non- profits in accordance with FAQ 21. 5. For 3 of 48, or 6.25%, of claims tested, the costs were for services for non-profit SidexSide (formerly LastMile) also created by CFO/CCP, which is an organization that provides job skills training and connects employers with participants seeking employment. SidexSide is not legally part of CFO/CCP and does not directly provide rental assistance; therefore, payments made to SidexSide do not directly support the administration of ERA program and are not allowable administrative costs. ($8,824.00 questioned costs) • We partially agree in that the expenses listed for SidexSide were incorrectly allocated to the Admin account. These expenses should have been expensed from their ERA2 Housing Stability grants. CFO has strengthened our internal controls and understanding to more accurately code and identify expenses, so they are expensed to the correct fund in the future. We partially disagree that the payments made to SidexSide are unallowable. According to the 2024 ERA Compliance Supplement and FAQ 23, 10% of the funds under ERA1 and ERA2 may be used for housing stability services. The 2024 Compliance Supplement in describing Administrative Expenses, states, "Under ERA 1, a grantee may use up to 10 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services. Under ERA 2, a grantee may use up to 15 percent of the total award amount for direct and indirect administrative costs and may use up to 10 percent of the total award amount for housing stability services ..." This is also repeated in FAQ23. According to both 2024 Compliance Supplement and FAQ23, housing stability services include but are not limited to: eviction prevention and eviction diversion programs; mediation between landlords and tenants; housing counseling; fair housing counseling; housing navigators or promotors that help households access programs or find housing; case management related to housing stability; housing-related services for survivors of domestic abuse or human trafficking; legal services or attorney’s fees related to eviction proceedings and maintaining housing stability; and specialized services for individuals with disabilities or seniors that support their ability to access or maintain housing. Additionally, under FAQ 21, grantees may use ERA payments to make subawards to other entities, including non-profit organizations and local governments, to administer ERA programs on behalf of the grantees. Therefore, payments to SidexSide are allowable expenses b/c these non-profits provided services that fell under the allowable uses for Housing Stability Services and CFO was able to make a subaward to these non- profits in accordance with FAQ 21. See attached NON CC 3-SidexSide.program tie to housing stability. 6. For 4 of 48, or 8.33%, of claims tested, the costs were unallowable and included items such as trainings unrelated to ERA, gift cards, alcohol, and food. ($1,549.76 questioned costs) • We agree and the funds were returned. See Attachment “NON CC 4 Refund” 7. For 1 of 48, or 2.08%, of claims tested, the costs were for the Afghan Legal Network project which partnered with CFO to provide ERA funds to Afghanistan refugees; SAI determined these costs are unallowable as the refugees were not Oklahoma residents, and not eligible for assistance. Therefore, administrative costs related to this project were also unallowable. ($498.00 questioned costs) • The expense listed for ALN was incorrectly allocated to the Admin account. This expense should have been expensed from their ERA2 Housing Stability grants. CFO has strengthened our internal controls and understanding to more accurately code and identify expenses, so they are expensed to the correct fund in the future. See also the response to Finding 2023-027. 8. For 1 of 48, or 2.08%, of claims tested, the cost was unrelated to ERA and unallowable. CFO/CCP has refunded the expense using private funds after SAI determined it was unallowable. ($250.00 questioned costs) • We acknowledge that CFO has refunded this expense while the FY23 audit was in process. 9. For 27 of 48, or 56.25%, of claims tested, the cost was allowable; however, the expense was attributable to multiple jurisdictions and only 90.33% of the cost should have been charged to the State. However, CFO/CCP was unable to support the proper allocation was completed and that 100% of the cost was not charged to the State. We question 9.67% of the allowable expenditures ($16,527.61 questioned costs) • See the response to Finding 2023-028 – Second Condition and Context. Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-028 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action Condition and Context: While documenting controls over subrecipient program and administrative expenditures for the ERA 1 and ERA 2 grants, we noted that OMES did not require the subrecipients to submit supporting documentation for expenditures charged to the programs. Further, we determined one subrecipient, Communities Foundation of Oklahoma (CFO) did not have sufficient internal controls over program or administrative expenditures to ensure they were for allowable costs and activities. • Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES- GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multi-layer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMESGMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES- GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts bi-weekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. • OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. • Community Foundation of Oklahoma (CFO) Due to a classification misunderstanding, CFO recently changed its financial process and is currently tracking expenditures as a subrecipient. CFO does have internal controls for expenditures and using their established process to update the tracking of their expenditures. (attachment internal controls – expenditures) CFO is reconciling the administrative expenses to capture and show the costs associated with administering the program. Condition and Context: While reviewing all administrative management fees, we noted one of the subrecipients charged the ERA 1 and ERA 2 grants $5,585,126.89 in unallowable administrative costs (management fees) that were retained by the subrecipient and were not attributable to providing financial assistance and housing stability services. The management fees the subrecipient charged to the grant do not represent actual admin expenditures, but rather an arbitrary amount retained by CFO (Questioned costs - $5,585,126.89). See management fees referenced in finding 2023-091. • A spreadsheet showing administrative expenses for FY23 is included with the finding response. CFO has used the allocable percentage of 90.33%, as provided by SAI in the finding 2023-088, to show the portion of expenditures attributed to the state ERA program. All previous and subsequent years are currently going through the same reconciliation effort. Any charges that were deemed unallowable by SAI during this audit or previous audits, such as credit card charges, will be removed from the actual expenditures spreadsheet and noted in the financial software. Transactional data from the subrecipients' financial system are included as backup for the administrative expenses. Documentation was previously not requested for CFO’s expenditures. Supporting documentation is being provided at this time to substantiate the response more fully. CFO has included a sample of personnel expenses in the response to this finding as a show of good faith. (Attachment 2022-08 CFO Payroll Support Docs, OneDrive _1 _4 _22-2025) Condition and Context: In addition, during our test work for the ERA 1 program administrative limit, we noted that administrative costs charged to the program exceeded the 10% allowable limit by 5.81%, or $1,259,429 • Being this is a multiple year grant program that was set up as earned administrative funds based upon programmatic spend, an ebb and flow of admin earned, and expended, is directly in relation to the programmatic spend. Looking at one fiscal year as a snapshot does not present the entire picture accurately. Over the course of the grant, the administrative funds earned have been at or under the cap established by Treasury. accurately. Over the course of the grant, the administrative funds earned have been at or under the cap established by Treasury. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-027 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Emergency Rental Assistance Program (ERA) Planned Corrective Action AUDIT BULLET POINT “Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Eligibility exceptions: • For 22 of 89, or 24.72%, of items tested, the applicant was an Afghanistan refugee and not a renter who lived in Oklahoma at the time of applying for assistance; therefore, they were not eligible, and the payment was unallowable. The subrecipient, Communities Foundation of Oklahoma, paid for the applicant to be in a hotel and then subsequently paid for their rent and utilities. Since the applicants were not eligible all payments were unallowable; therefore, we did not determine if the payment was calculated correctly or if the assistance exceeded 15 months for ERA 1 or 18 months for ERA 2. However, of these unallowable costs, we noted the following: • Some applicants were reimbursed for monthly lawn services as part of their monthly rental payment. • Several payments were made to the applicants after the initial payment without receiving an additional application or additional funds request (AFR) form (See FAQ #10).” OMES RESPONSE: The State disagrees that payments made to Afghan refugees were unallowable. The finding asserts that 22 applicants were ineligible for Emergency Rental Assistance (ERA) because they were Afghan refugees and were not “renters who lived in Oklahoma at the time of applying.” This interpretation is inconsistent with U.S. Department of the Treasury guidance, which does not require U.S. citizenship, legal residency, or prior tenancy in Oklahoma as a condition of eligibility. • Citizenship or Legal Residency Is Not a Requirement for ERA Eligibility. It is never mentioned in the ERA statute or Treasury guidance that U.S. citizenship, lawful residency, or duration of tenancy required. The U.S. Treasury’s ERA FAQ #1 explicitly outlines the four criteria for eligibility: • The household must be obligated to pay rent on a residential dwelling; • One or more individuals within the household must have experienced financial hardship due to the pandemic; • The household must demonstrate a risk of homelessness or housing instability; • Household income must be at or below 80% of area median income (AMI). These Afghan households were invited by our government leaders to resettle in Oklahoma as part of the federal government’s Operation Allies Welcome initiative. When the Afghans arrived in Oklahoma, they immediately sought housing, being assisted by agencies such as Catholic Charities. Obviously, they were not homeowners. As tenants or households seeking to rent housing during the midst of a pandemic without any immediate means of securing employment, they were experiencing housing instability and fully met the ERA Program 1 and 2 criteria. Upon arrival: • They were not homeowners; • They had no permanent housing; • They were working with nonprofit agencies like Catholic Charities to find housing; • Because of the pandemic, they were not able to secure work and had no or extremely low income; • They were at imminent risk of homelessness. Treasury has further emphasized in FAQ #1, “… these requirements provide for various means of documentation so that grantees may extend this emergency assistance to vulnerable populations without imposing undue documentation burdens…” Again, never is the word “residence or citizen” used, even in the footnotes. This language was clearly intended to include undocumented individuals, newly arrived refugees, and others in nontraditional or transitional housing situations. Furthermore, as noted in the CFO/CCP ERA application for rental assistance previously provided to SAI, the eligibility requirements do not require residency but that only the applicant live in the State of Oklahoma. Further Support: • September 9, 2021, Email between CCP/CFO and the Director of Tax and Housing Advocacy for the National Council of State Housing Agencies. Discusses that CCP was working with housing stability service partners, specifically Catholic Charities, to help with housing Afghans when they came to Oklahoma. Emails also clarify that the Afghan refugees would only be able to apply once they moved to Oklahoma. (See attached) • Sept 29, 2021 – Email from U.S. Dept. of State, Bureau of Populations, Refugees, and Migration (PRM), U.S. Department of State, which invited a variety of Federal Agency representatives to a call to hear from the OK Catholic Charities director to speak about the Oklahoma Catholic Charities “model of utilizing CARES Act funding to support both temporary and long term housing for Afghan arrivals and an additional hour was set aside for discussion of this model. Executive Director of the Oklahoma City Catholic Charities forwarded this email to CCP asking if she would join to assist with the discussion of this model. Listed below are the agencies that had representatives on the email. the National Security Council and Subcommittees  The White House – Organization of the National Security Council and Subcommittees  Executive Office of the President.  U.S. Department  Federal FEMA Office  U.S. Citizenship and Immigration Services  Homeland Security  Catholic Charities  U.S. Conference of Catholic Bishops  Administration of Children & Families  Governors, Biden Administration point person for Afghan Parolee Assistance. (See attached) • October 3, 2021, Follow-up Email thanking people regarding the presentation and for joining the call. “The insight, creativity, and partnership is inspiring and has the potential to assist so many Afghans.” Furthermore, an email was to the attendees of the presentation clarifying ERA as the funding source for Oklahoma’s model for developing housing resource for Afghan arrival. Additionally, it was stated that “We hope that these clarifications and enclosed links will help us understand how these funds may be leveraged to house Afghans when they are resettled from the bases to other locations around the country.” (see attached) • October 24, 2021, Email from ERA Outreach Team Leader, Emergency Housing Team, U.S. Department of the Treasury, to CCP wanting to connect them with Chicago who was looking to do some work with asylum seekers/refugees and was wanting to talk to other grantees who have worked with these populations using ERA funds. Note, this is an ERA Team Leader from the Treasury wanting CCP to share CCP/CFO’s ERA model. Obviously, the Treasury would not reach out to connect CCP/CFO to speak about their Afghan refugee model if they did not approve of the use of ERA funds to assist with housing the refugees. (See attached) • Treasury FAQ #37 – Addresses how grantees can promote access to assistance for all eligible households and is clear that the Guidance contemplates serving individuals from all background and nationalities, stating that grantees “should address barriers … including by providing program documents in multiple languages.” Furthermore, the Guidance states “Grantees should also provide, whether directly or through partner organizations, culturally and linguistically relevant outreach and housing stability services to ensure access to assistance for all eligible households.” In accordance with Title VI of the Civil Rights Act of 1964 (Title VI) ERA grantees must ensure they provide meaningful access to their limited-Englishproficiency (LEP) applicants and beneficiaries of their federally assisted programs, services, and activities. Finally, “Denial of an LEP person’s access to federally assisted programs, services, and activities is a form of nationalorigin discrimination prohibited under Title VI and Treasury’s Title VI implementing regulations at 31 CFR Part 22.” • Treasury guidance on creating applications for the ERA program with no mention of citizenship or residency requirements. Allow applicants to progress and self-attest if they cannot provide documentation - At the stage when applicants are asked to provide documents to establish COVID hardship, housing instability, income, or rental obligation, applicants should also be informed that they may self-attest and move forward in the application if they do not have those documents. • Disaster Housing Recovery Coalition, C/O National Low Income Housing Coalition (NLIHC) – Published an information sheet for recipients of Federal awards in response to the COVID-19 pandemic which detailed which awards did not consider immigration status when providing assistance. Under the ERA Program, the NLIHC stated that “The law establishing the Emergency Rental Assistance Program does not impose restrictions based on immigration status.” (Attached – labeled FAQs- Eligibility for Assistance Based on Immigration Status) 2. Hotel Stays Are Allowable Options for Temporarily Displaced Households Treasury provided a Broader Reading of “Obligated to Pay Rent on a Residential Dwelling,” and determined the costs of staying in a hotel are eligible expenses, and rental assistance could be provided to temporarily displaced households living in hotels. The audit finding narrowly interprets the term “obligated to pay rent” in FAQ #1. However, multiple Treasury FAQs — including FAQ #7, #26, and #35 — demonstrate that the Department intended a flexible, inclusive interpretation, recognizing the emergency nature of the program and the housing challenges faced by displaced individuals and families and reinforces that the term “residential dwelling” is not limited to traditional apartments with leases but includes hotels and other temporary housing used in transition. • FAQ #7: Permits hotel or motel costs to be covered using ERA funds when the household lacks alternative housing options, even without a formal lease. • FAQ #26: States that rental assistance may be provided to households residing temporarily in hotels or motels when they are • displaced or between housing. FAQ #27: Allows rental assistance for rent-to- own households, further demonstrating that the key is ERA CANNOT be used for homeowners (FAQ #20). • FAQ #35: Specifically authorizes relocation assistance for households who have been evicted or otherwise displaced and are attempting to secure new permanent housing. These provisions explicitly contemplate support for individuals and families—such as Afghan refugees— who were temporarily displaced and used hotels as the only available rental housing (in truth, many Oklahomans are forced to do this) until suitable housing could be secured (rendered more difficult for larger families – up to 10+ children). As allowed under Treasury ERA FAQs #7 and #26, hotel stays were covered when used as transitional housing due to lack of available rental stock—especially for large families. Afghan refugees fell squarely within this provision. 3. Lawn Services as Part of Rent This is allowable as part of the cost of the rental of the premises. For all rentals that have a yard there is lawn maintenance, and the landlord has the option to determine how to charge (or absorb) that cost. These costs were not reimbursed as separate utility costs, but as part of the monthly rental obligation agreed to in writing. 4. Subsequent Payments Without AFR Forms • ERA guidance allows grantees to implement streamlined processes to reduce burden and deliver aid efficiently. CCP’s internal policies permitted continued rental and utility assistance without requiring new applications or additional AFR forms, so long as eligibility remained unchanged and appropriate documentation was on file. This approach is aligned with Treasury’s consistent encouragement to minimize administrative barriers in the interest of program responsiveness and urgency. Treasury guidance also stated, Only ask applicants for information that is required by the ERA statutes and Treasury’s guidance to provide them assistance. AUDIT BULLET POINT “Further, while summarizing the data on ‘applicant’, we noted one line item was made up of 498 individual payments made to hotels on behalf of the Afghanistan refugees, which consisted of 186 applicants. We identified 185 of these applicants had payments for Afghanistan refugees to live in hotels prior to applying to the ERA program. Since, at the time of the application, they were not obligated to pay rent on a residential dwelling per Department of Treasury FAQ 1 and established CCP ERA policy, the cost is unallowable. This resulted in $1,727,687.64 in questioned costs (these costs do not include payments previously questioned in the first bullet).” OMES RESPONSE: OMES disagrees with this finding. Multiple Treasury FAQs, including #7, #26, and #35, reinforces the term “residential dwelling” is not limited to traditional apartments but may include hotels and other temporary housing used in transition. Also, FAQ #8 states that a beneficiary is not required to have rental arrears to receive assistance and permits enrollment “of households for only prospective benefits.” The only restriction is that for the ERA1 program, if an applicant is requesting prospective assistance and the applicant also has rental arrears, the grantee must also provide assistance to reduce those arrears (this restriction does not apply to ERA2). Finally, per FAQ # 13, eligible households do not have to be in their current rental home when the COVID-19 public health emergency was declared, stating, “Payments under ERA are provided to help households meet housing costs that they are unable to meet as a result of the COVID-19 pandemic. There is no requirement regarding the length of tenure in the current unit.” Oklahoma Office of Management and Enterprise Services (OMES) acknowledges the Oklahoma State Auditor and Inspector Office’s (SAI) findings that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2023. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI. Beginning with FY2025, OMES has taken the following measures: • Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience. • To ensure that the subrecipient agreement includes all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) have recently executed a Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies. See Attached – Grant Agreement Amendment. • OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed. • OMES-GMO has a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMESGMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMESGMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multi-layer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements. • Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMES-GMO conducts biweekly monitoring meetings with CFO and is currently reviewing documentation provided by CFO to ensure all current ERA projects are eligible under the ERA guidelines and that CFO is exercising the proper oversight over their subrecipients. OMES-GMO will continue with their current ERA monitoring steps and internal controls and will work with CFO to ensure ERA program funds are spent in accordance with ERA program guidelines and state and federal regulations. Anticipated Completion Date Ongoing throughout the life of the grant Responsible Contact Person Brandy Manek

Finding Number 2023-094 Subject Heading (Financial) or AL no. and program name (Federal) ALN: 21.019 Federal Program name: Coronavirus Relief Fund (CRF) Planned Corrective Action The State agrees in part and the State disagrees in part. In regard to payments made to Jill Geiger Consulting in the amounts of $39,957.00 and $28,272.00, please see attached documentation of time and effort of services provided during FY2023 which were also paid with by CRF funds in FY2023. Please scroll down on the timesheet reports and refer to the Notes column for descriptions. Additionally, the CRF weekly update log is from JGC and gives more details for services provided. For the payments made to Jill Geiger Consulting for the other amounts ($27,083.33 and $34,650), these reimbursements occurred in FY2023 but were not for services provided in FY2023, but for FY2022. If you review the “Summary of requested vouchers Jill Geiger,” the payment of $34,650 occurred on 8/1/2022 but was paid to cover services in May and June 2022. For invoice v00160672 in the amount of $27,083.33, the payment was made July 5, 2022 (FY23) but covered services for April 22 (FY22). You will be able to see more instances of this in the Summary and attached invoices for that same amount. Therefore, the State requests these be taken out of the audit review and findings for FY2023 as the services were not provided in FY2023. The State of Oklahoma agrees in part and disagrees in part. The State agrees that a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures, will help ensure allowability, accuracy, and assist in the detection of fraud. Within OMES, oversight and management of Federal grants has been transferred to the OMES Grant Management Office (OMES-GMO). The OMES-GMO is staffed with individuals, who have several years of grant experience implementing these internal controls and procedures. Anticipated Completion Date September 2022 Responsible Contact Person Brandy Manek

Finding Number 2023-036 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action OESC concurs with the audit findings and agrees with the recommendation. The agency also acknowledges the importance of data integrity when reporting ETA 9128 activities and the important role such reporting plays in evaluating and monitoring the RESEA program. OESC realized there was an issue with the RESEA enrollments opened during 3rd quarter 2021 and worked on creating procedures to ensure enrollments opened properly. As referenced in the agency’s response to this same finding last year, in January 2023, administrative staff identified issues with enrollments not opening with a recently implemented technology tool. The agency subsequently decided to abandon the new technology and revert to its original scheduling system. OESC worked with the OKJM vendor to ensure all required services are opened automatically when the RESEA enrollment is established. In December 2023, OESC initiated a process to verify the enrollments opened and perform monthly review of all enrollments to ensure all data elements are captured for all participants. This process involves a high degree of manual effort which presents higher risk for inaccuracies. In conjunction with the agency’s modernization efforts, significant work has been directed at implementing solutions to address both the case management and data reporting requirements needed to fully resolve this finding. Anticipated Completion Date Ongoing until modernization of RESEA tools is complete Responsible Contact Person Tammy Wood, RESEA/TAA Program Manager

Finding Number 2023-035 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action The agency concurs with the findings and agrees with the recommendation. The agency acknowledges our responsibility for program integrity and proper controls for the RESEA program. As we referenced in our response last year, the agency has undertaken modernization efforts to provide better solutions for the RESEA program. EmployOklahoma is the first result of this effort in the workforce employment area and it launched in January 2025 as the replacement for OKJM. The majority of the findings above were related to cases pulled for the period between July 2022 and December 2022; there was improvement in the period from January 2023 to June 2023. We anticipate continued progress and improvement going forward, but there will continue to be elevated risk for inaccuracies until the agency’s modernization efforts are successful in implementing solutions to address both the case management and data reporting requirements needed to fully resolve these findings. Anticipated Completion Date Ongoing until modernization of RESEA tools is complete Responsible Contact Person Tammy Wood, RESEA/TAA Program Manager

Finding Number 2023-033 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action OESC concurs with the audit finding and agrees with the recommendation. The decrease in the total dollars associated with this finding in comparison to the prior year demonstrates that the issue has been addressed with the programming that was completed in February 2023. The agency will continue to monitor ongoing results of the new programming to address any further adjustments needed for edge-case scenarios or to appropriately handle other system changes. Anticipated Completion Date Completed in February 2023 Responsible Contact Person Christopher O’Brien, Vice President - OESC UI

Finding Number 2023-031 Subject Heading (Financial) or AL no. and program name (Federal) #17.225 Unemployment Insurance Planned Corrective Action OESC concurs with the audit finding and agrees with the recommendation. The agency also acknowledges the importance of data integrity in submitting the ETA 9050, ETA 9052 and ETA 9055 reports. Programming was completed in June 2023 to retain backup of the detailed data at the time each report is run. As part of OESC’s technology modernization efforts, technical resources continue to review reporting requirements for all regulatory reports and validate the accuracy of programming that supports such reporting. DOL completed a Data Validation monitoring of OESC in May 2024, and the DOL reviewers shared favorable comments regarding OESC’s modernization efforts, and the agency was able to satisfy DOL with regard to the area of concern and finding identified in their review. OESC leadership expects to address the underlying causes for this finding as part of our modernization efforts. Anticipated Completion Date Programming completed in June 2023 to retain backup data; data validation for regulatory reports is ongoing as part of OESC technology modernization efforts. Responsible Contact Person Michelle Britten, Chief Administrative Officer

Finding Number 2023-015 Subject Heading (Financial) or AL no. and program name (Federal) CN CLUSTER – SCHOOL BREAKFAST PROGRAM; NATIONAL SCHOOL LUNCH PROGRAM, SPECIAL MILK PROGRAM FOR CHILDREN, FRESH FRUITS AND VEGETABLES PROGRAM AL #10.553, 10.555; 10.556; 10.559; 10.582 Planned Corrective Action We will update our 3-month Operating Excess form we send to schools to include more information. Any schools that are going to carryover part or all of their excess funds will need to provide us an explanation of what those funds will be spent on and then comments will be made on the log so we follow-up with the school to ensure allowable items were purchased. If they are using the excess for salaries and/or the cost of serving all students free they will need to let us know that in writing as well. Anticipated Completion Date June 2, 2025 Responsible Contact Person Jennifer Weber

Finding Number 2023-023 Subject Heading (Financial) or AL no. and program name (Federal) 10.551 and 10.561 – SNAP Cluster Planned Corrective Action The Oklahoma Department of Human Services (OKDHS) does not concur that an unauthorized person printed an EBT card. The employee in question did transfer to another position but was purposely left with that access to assist as needed during the transition period. During the audited timeframe, many locations had only one staff member onsite due to COVID, a division-wide restructuring in AFS, and the removal of administrative staff from field offices. Recognizing this limitation, the State restructured the EBT card inventory process in its entirety. All reconciliation duties including tracking and resolving discrepancies are now handled exclusively by designated off-site administrative staff using a new dynamic Microsoft solution. This eliminates the issue of misplaced paper based records and improves oversight and accountability in the process. The function of deactivating EBT cards was moved to offsite staff allowing the County staff to better focus on serving the needs of the citizens seeking assistance. Anticipated Completion Date 4/18/2025 Responsible Contact Person Amy Roberts, Deputy Director of AFS

Finding Number 2023-007 Subject Heading (Financial) or AL no. and program name (Federal) 10.542 – Pandemic EBT – Food Benefits Planned Corrective Action In February 2025, the Oklahoma SNAP unit transitioned to new leadership with the appointment of a new Program Administrator (PA). During the transition, previous issues related to the FNS 292B report were identified and addressed. New procedures have been implemented to ensure future reports are accurate and properly reviewed. Moving forward: • The SNAP Program Field Representative will enter the data for the FNS 292B report and notify the Program Administrator once the report is completed. • The Program Administrator will then review the data and information entered for accuracy. • After confirming the information is correct, the Program Administrator will certify the report in FPRs as appropriate. The new Program Administrator has access to FPRs and is authorized to certify the data. These steps have been put in place to ensure the integrity and timeliness of the FNS 292B report moving forward. Anticipated Completion Date Already completed Responsible Contact Person Amy Roberts

CONDITION: During the calendar year 2023, the City did not utilize a formal general ledger system of accounting to track the financial activity (financial position and results of operations) for several ‘Funds’ held at the City. The activity of these funds is either 1) maintained in spreadsheet fashion similar to a checkbook used in personal finances, 2) recorded partially (expenses only with no revenue), or 3) not tracked at all. As these funds are not maintained using the City’s accounting software package, management does not have the ability to efficiently generate financial reports necessary to provide management with the proper fiscal oversight. This condition included the American Rescue Plan Act (ARPA) funding known as the Coronavirus State and Local Fiscal Recovery Fund. However, it should be noted that City personnel were able to prepare spreadsheets to document which expenditures were utilized to prepare the necessary quarterly reporting requirements to the Department of Treasury. This is a repeat finding (2022-002) from the prior year. CRITERIA: Prudent internal control procedures in the areas of general ledger management and financial reporting include maintaining a formal general ledger system of accounting to track the activity of all ‘Funds’ maintained by the City. In specific as it relates to federal programs, Section 2 CFR 200.403(g) of the Uniform Guidance requires that federal costs must be adequately documented which would include the maintaining of a formal general ledger system of accounting for all ‘Funds’ of the City. MANAGEMENT’S CORRECTIVE ACTION PLAN: Management of the City will assess the current workload and expertise of the City’s business office personnel in an effort to determine a feasible timeframe to continue the process of creating a formal general ledger system of accounting for all City ‘Funds’ that are not already entered into the software accounting system. The timeframe for completion of this review will occur during the first nine months of calendar year 2025 with the intention of having the City be in full compliance with Section 2 CFR 200.403(g) of the Uniform Guidance which requires federal costs to be adequately documented which would include the maintaining of a formal general ledger system of accounting for all ‘Funds’ of the City.

CONDITION: During the calendar year 2023, the City did not record the necessary adjustments to the various ‘Fund’ general ledgers of the City to properly reconcile the balance sheet accounts, such as cash, receivables, payables, and payroll-related liabilities to the underlying supporting documentation available at the City (which includes reconciliations of cash prepared independently by City personnel but do not agree to amounts reported in the various general ledgers). This included ‘Funds” containing significant federal funding such as the City’s Community Development Block Grant (CDBG) Program and American Rescue Plan Act (ARPA) funding known as the Coronavirus State and Local Fiscal Recovery Fund. As a result, the financial position and results of operations as shown throughout the calendar year were inaccurately stated. However, it should be noted that the Community Development Department of the City and other City personnel maintain separate financial reporting for these federal funds, independent of the aforementioned ‘Fund’ general ledgers sufficient to ascertain the revenues and expenditures of the federal programs. This is a repeat finding (2022-001) for the prior year. CRITERIA: Prudent internal control procedures in the areas of general ledger management and financial reporting include the reconciliation of all general ledger account balances to underlying supporting documentation monthly with independent oversight and approval as part of the process. In specific as it relates to federal programs, Section 2 CFR 200.403(g) of the Uniform Guidance requires that federal costs must be adequately documented which would include the applicable general ledgers of the City. MANAGEMENT’S CORRECTIVE ACTION PLAN: Management of the City will review the recommended options as presented by the Audit Firm’s recommendation for feasibility considering current manpower, expertise, and budgetary constraints. In addition, the City plans to ensure that written procedures for all accounting functions are implemented, reviewed and updated as necessary with the objective of ensuring that all balance sheet account balances are supported by the underlying documentation available at the City. The timeframe for completion of this review will occur during the first nine months of calendar year 2025 with the intention of having the City be in full compliance with Section 2 CFR 200.403(g) of the Uniform Guidance which requires federal costs to be adequately documented which would include the applicable general ledgers of the City.

The Center will ensure reports are completed, reviewed and sent according to contract guidelines.

Finding Number: 2023-041 Finding Name: Inadequate Process for Preparing ETA 2208A Special Report Finding Condition(s): The Illinois Department of Employment Security (IDES) does not have an adequate process in place to ensure the ETA 2208A special reports prepared for the Unemployment Insurance (UI) program are complete and accurate. Name of Contact Person(s): • Linette Hughes, Budget Director – Illinois Department of Employment Security, Office of the Budget • Belinda Moreno, State Budget Manager – Illinois Department of Employment Security, Office of the Budget • Anna Hrynewycz, Federal Budget Manager – Illinois Department of Employment Security, Office of the Budget Corrective Action(s): The IDES hired additional budget staff to aid in compiling and checking the reports to ensure complete and accurate reporting. Additionally, the IDES created and approved written procedures for the completion of the reports. Proposed Completion Date: July 1, 2024 - Completed

Finding Number: 2023-040 Finding Name: Inadequate Process for Preparing ETA 9130 Financial Reports Finding Condition(s): The Illinois Department of Employment Security (IDES) does not have an adequate process in place to ensure that the ETA 9130 financial reports prepared for the Unemployment Insurance (UI) program are complete and accurate. Name of Contact Person(s): • Kelly McGrath, Manager of Accounting and Reporting – Illinois Department of Employment Security, Accounting and Reporting • Briant Coombs, Manager of Accounting Service – Illinois Department of Employment Security, Accounting and Reporting Corrective Action(s): The IDES’ accounting staff will review its reporting procedures and determined ways to improve its controls over its reporting preparation, reviews, and approvals. Furthermore, the IDES will hire additional staff to aid in the ETA 9130 reporting process. Additionally, the IDES will look for ways to strengthen its internal controls over multiple IDES departments to ensure the data is complete and accurate. Finally, the IDES anticipates that, in coordination with the Illinois Department of Innovation and Technology (DoIT), the IDES’ reporting tools will be improved and/or modernized. Proposed Completion Date: December 31, 2025

Finding Number: 2023-039 Finding Name: Failure to Complete UI BAM Case File Reviews Within Required Timeframes Finding Condition(s): The Illinois Department of Employment Security (IDES) did not complete the Benefit Accuracy Measurement (BAM) case file reviews in accordance with United States Department of Labor (USDOL) requirements for the Unemployment Insurance (UI) program. Name of Contact Person(s): • Dureyl Tyson, Benefit Accuracy Measurement Unit Manager – Illinois Department of Employment Security, Quality Assurance and Compliance • Charles Young, Quality Assurance & Compliance Manager – Illinois Department of Employment Security, Quality Assurance and Compliance Corrective Action(s): The IDES’ BAM Unit has instituted two internal controls to help with timeliness of case completion. First, a weekly activity report introduced to show past due cases. This report shows all activities, letters generated to the claimants, employers, and any associated parties; interviews; follow up with any parties to complete necessary documents; and any adjudication needed for each case. This report allows the case manager to adequately review and make recommendations towards case completion. Second, the IDES instituted two types of reminders to monitor case completion. The first type of reminders introduced by the IDES are sent for any cases that are past due. Additionally, the IDES started sending reminders that are sent for any cases due the upcoming week along with any cases closed but that have not been reviewed by the case managers. Both the weekly activity reports and the reminds allow the BAM manager to see which investigators needed more guidance in completing their cases. These activities also showed the need to find coachable moments in each investigation to help with completion, such as, analyzing information, coding, and completing the summaries, etc. Proposed Completion Date: June 30, 2024 – Completed

Finding Number: 2023-031 Finding Name: Inaccurate Special Report Finding Condition(s): The Illinois Department of Commerce and Economic Opportunity (DCEO) did not maintain supporting documentation for key line items or prepare accurate special reports for the Low-Income Home Energy Assistance Program (LIHEAP). Additionally, the DCEO has not established appropriate internal controls to ensure its quarterly reports submitted to USDHHS are properly supported in accordance with federal requirements. Finally, the DCEO’s supervisory review procedures have not been designed to operate at a level of precision to identify errors of the size and nature noted above. Name of Contact Person(s): Ben Moore, Fiscal Operations Manager – Illinois Department of Commerce and Economic Opportunity, Office of Community Assistance Corrective Action(s): The DCEO’s Office of Community Assistance (OCA) has implemented a process for an independent verification by a second OCA staff member of the correct data entry prior to submission of obligated funds for all future LIHEAP quarterly reports. Proposed Completion Date: February 25, 2025 – Completed

Finding Number: 2023-028 Finding Name: Failure to Perform Cash Draws in Accordance with the Treasury-State Agreement Finding Condition(s): The Illinois Department of Commerce and Economic Opportunity (DCEO) did not perform its cash draws in accordance with the funding technique prescribed in the Treasury-State Agreement (TSA). Name of Contact Person(s): • Lisa Clement, Audit Liaison – Illinois Department of Commerce and Economic Opportunity, Office of Accountability • Megan Buskirk, Interim Chief Accountability Officer – Illinois Department of Commerce and Economic Opportunity, Office of Accountability • Phil Keshen, Deputy Director – Illinois Department of Commerce and Economic Opportunity, Office of Financial Management Corrective Action(s): The DCEO’s Office of Financial Management (OFM) has requested that the Governor’s Office of Management & Budget (GOMB) change the funding technique for the Low-Income Home Energy Assistance Program within the Treasury-State Agreement to Pre-Issuance. This has been confirmed and will be in the agreement for fiscal year 2025. Proposed Completion Date: August 30, 2024 – Completed

Finding Number: 2023-024 Finding Name: Failure to Report Expenditures on the Medicaid CMS-64 Report in a Timely Manner Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not report certain Medicaid Cluster expenditures on quarterly federal financial (CMS-64) reports in a timely manner. Name of Contact Person(s): Jennifer Bourn, Bureau Chief – Illinois Department of Healthcare and Family Services, Federal Finance Corrective Action(s): The Illinois Department of Human Services (DHS) and the DHS’ Department of Innovation and Technology (DoIT) staff have implemented weekly reports on developmental disabilities (DD) waiver payment submissions to the DHFS to allow DHS staff information to review and timely identify any issues with the DD waiver submissions to the DHFS. The DHFS reviewed and revised its quarterly other agency Medicaid spending/federal revenue reporting, which is used to create the CMS-64. This report includes actual quarterly claim expenditure data and is distributed by the DHFS to other agencies and its staff for review each quarter. This report was redesigned to provide prior quarter/year comparisons to allow for more effective identification of problematic issues. Finally, the report’s recipient list was updated to ensure appropriate distribution to the DHFS’ staff and the other agencies. The DHFS’ staff follows-up with other agency recipients to ensure the quarterly reports are reviewed and responses are communicated to the DHFS. Proposed Completion Date: June 30, 2025 – Completed

Finding Number: 2023-023 Finding Name: Failure to Perform Recovery Audits over Medicaid Underpayments and Overpayment Claims Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not initiate any recovery audits over Medicaid claims during fiscal year 2023. Name of Contact Person(s): • Ismaila Jagne, Administrative Assistant II - Illinois Department of Healthcare and Family Services, Office of Inspector General • Brian Dunn, Inspector General - Illinois Department of Healthcare and Family Services, Office of Inspector General Corrective Action(s): The DHFS’ Office of Inspector General and the recovery audit contractor (RAC) vendor developed and implemented an audit system. As the program’s administrator, the DHFS OIG monitors its efficacy on an on-going basis and will adjust as necessary. While the RAC vendor did work to complete 13 audits in fiscal year 2023, pursuant to a former contract, the DHFS did not execute its 2023 RAC contract until August 12, 2022. By law, no work could begin under that contract until it was finalized. Once the contract was executed, DHFS’ OIG began working with the vendor to develop the policies, procedures, templates, and systems needed to run an efficient and effective auditing program. The DHFS’ OIG and the RAC vendor met on a bi-weekly basis to develop and implement this system. After all planning and development was completed, the vendor programmed its system and auditing began. RAC audits have a three-year look-back period; therefore, audits in the system will cover fiscal year 2023. Proposed Completion Date: October 31, 2023 – Completed

Finding Number: 2023-020 Finding Name: Failure to Perform Periodic Audits of Encounter Data Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not perform periodic audits of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each Managed Care Organization (MCO) for the Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs during fiscal year 2023. Name of Contact Person(s): • Amy Roberts, Program Reporting Compliance - Illinois Department of Healthcare and Family Services, Division of Medical Programs, Bureau of Managed Care • Rich Allen, Quality and Compliance Operations Manager - Illinois Department of Healthcare and Family Services, Division of Medical Programs, Bureau of Managed Care • Keshonna Lones, Bureau Chief - Illinois Department of Healthcare and Family Services, Division of Medical Programs, Bureau of Managed Care Corrective Action(s): The DHFS, in coordination with its External Quality Review Organization (EQRO), worked with the MCOs to conduct a validation audit of the MCOs and posted the final report on the DHFS Report Center line on September 28, 2023. The DHFS issued notices to the MCOs and required submission of GAAP/financial statement audits to be provided to the DHFS no later than July 31, 2023. The reports submitted by each MCO have been shared with the DHFS’ financial team for review. Additionally, the DHFS created a policy document for the encounter and financial three-year audit cycle. Proposed Completion Date: September 28, 2023 – Completed

Finding Number: 2023-016 Finding Name: Improper TANF Beneficiary Payments Finding Condition(s): The Illinois Department of Human Services (IDHS) made improper payments to beneficiaries of the Temporary Assistance for Needy Families (TANF) program. In addition, the IDHS identified a system error in June 2025 impacting beneficiaries whose benefit payments were calculated using diverted income. Name of Contact Person(s): Elizabth Lusk, Social Service Program Planner – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): As of June 30, 2025, the IDHS’ Office of Policy and Program Integrity and the IDHS’ Office of Family Community Resource Centers discussed and formulated a plan to ensure payments are properly calculated and paid. Additionally, a training will be provided for caseworkers that pertains to reviewing the case summary for income errors or sanction errors, etc. Proposed Completion Date: June 30, 2026

Finding Number: 2023-007 Finding Name: Missing Documentation in Beneficiary Files Finding Condition(s): The Illinois Department of Human Services (IDHS) could not locate case file documentation supporting certain eligibility and special test requirements for beneficiaries of the Temporary Assistance for Needy Families (TANF) program. Furthermore, the IDHS does not have adequate resources to perform and document eligibility determinations and has not established appropriate monitoring procedures to ensure eligibility determinations are properly documented in accordance with program requirements. Name of Contact Person(s): Angela Imhoff, Acting Associate Director – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): As of February 20, 2025, the IDHS’ Associate Director met with the regional administrators to discuss the ongoing importance of ensuring the Responsibility Service Plan (RSP) signatures are captured through the manual process. In addition, an enhancement request has been filed with a vendor that will allow telephonic signatures for the RSPs in the Integrated Eligibility System (IES). Additionally, as of February 20, 2025, the Associate Director discussed with the regional administrators the ongoing need to review the manual 1611 process throughout the regions. Finally, the IDHS will work toward automating the 1611 process in the IES in collaboration with an Illinois Department of Healthcare and Family Services child support system update. Proposed Completion Date: December 31, 2026

Finding Number: 2023-006 Finding Name: Inadequate Procedures to Determine Accuracy of the Post-Expenditure Report Finding Condition(s): The Illinois Department of Human Services (IDHS) failed to provide supporting documentation for the post-expenditure report including a key line item, the number of eligible individuals who received services paid for in part or in whole with federal funds under the Social Services Block Grant (Title XX) program. Name of Contact Person(s): Elizabeth Lusk, Social Services Program Planner Director Operations – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): The IDHS emailed notifications to all grantees of the requirement to include a client identifier when reporting the number of eligible clients served. (Completed 07/01/24).Additionally, the IDHS will update its FY26 Title XX Program Manual to include client identifier as a reporting requirement. The update will also include the process of how and when the data will be collected. (Completed 06/06/25) Finally, the IDHS will shift from annual to quarterly reporting for the post-expenditure report. This change will ensure the report is complete, accurate, and properly supported. (Completed 04/18/25) Proposed Completion Date: June 6, 2025 – Completed