Corrective Action Plans

Recommendation: We recommend that the City review and update internal controls over the completion and submission of monthly program reports to ensure the accuracy of the information being reported and to ensure that supporting underlying documentation is properly retained. As part of this process, the City should consider utilizing members of the Finance Department as the monthly reports contain certain financial information. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The RBHA established a process by which Housing staff generate the reports required to prepare the VMS and provide the Finance Department staff a copy in order to document timing and ensure additional review. Also, the RBHA and Finance revised the City’s account structure for Housing-related expenses to align with the City’s account setup with VMS reporting. The RBHA will provide monthly reports to the Finance Department and the financial consultant to document the timing of the reports and facilitate an independent review and ensure the monthly submissions are properly reviewed, approved, and retained for audit purposes. Name(s) of the contact person(s) responsible for corrective action: Imelda Delgado, Housing Manager Planned completion date for corrective action plan: January 2026

The Church agrees with the finding. Going forward, all reimbursement requests will be reviewed and approved by someone independent of the preparer, before submission.

On July 23, 2026, the Corporation paid in full its outstanding Paycheck Protection Program (PPP) loan totaling $52,623. This finding has been resolved

Mt. Olive Community Outreach Center, Inc. Corrective Action Plan Grant Budget Monitoring and Expenditure Control Finding Mt. Olive Community Outreach Center, Inc. (MOCOC) recognizes the need to strengthen its internal fiscal controls to ensure expenditures remain within approved grant budgets. As a small nonprofit administering multiple grant awards, the organization is implementing additional monitoring procedures to prevent overspending and ensure compliance with all grant requirements. Root Cause The organization did not have a formal written procedure outlining how grant expenditures would be monitored throughout the grant period. Although expenditures were reviewed on an ongoing basis, the review process was not consistently documented or supported by a standardized budget monitoring procedure. Corrective Action Effective immediately, MOCOC will implement the following procedures for all grant-funded programs: 1. Monthly Budget Monitoring The Program Director and (Accountant?) will review each active grant budget on a monthly basis. A Budget-to-Actual report will be reviewed to compare approved budgets with actual expenditures and remaining balances. 2. Pre-Expenditure Budget Verification Before any grant-funded purchase or financial commitment is made, the Program Director will verify that sufficient funds remain within the appropriate budget category. No expenditure will be approved if adequate funds are not available. 3. Grant Budget Tracking The Program Director/(Accountant) will maintain a budget tracking spreadsheet for each active grant showing: • Approved budget • Expenditures to date • Remaining balance • Percentage of budget utilized This tracking document will be updated regularly and reviewed during the monthly budget meetings. 4. Spending Threshold Monitoring When expenditures reach approximately 85% of the approved budget or any major budget category, the Program Director and (Accountant?) will review the remaining budget and determine whether spending adjustments or a budget revision request, if permitted by the funding agency, is necessary. 5. Financial Oversight The Program Director will review and approve all grant-related expenditures before payment. The Program will process payments, maintain accounting records, and reconcile expenditures to the accounting system, after they have been properly approved and signed off on to process. Monthly financial reports will be provided to management for review. Responsible Staff • Executive Director • Program Director • Program Assistants • Accountant (When Applicable) Implementation Date These procedures become effective immediately upon approval and will be incorporated into the organization's Fiscal Policies and Procedures Manual. Monitoring Compliance with these procedures will be monitored through: • Monthly budget review meetings between the Executive Director, Program Director and (Accountant?) • Documentation of budget reviews and any corrective actions taken. • Periodic review of financial reports by the Board of Directors if applicable. • Annual review of these procedures to determine whether revisions or additional controls are needed. Expected Outcome Implementation of these procedures will strengthen MOCOC's internal controls, improve budget oversight, reduce the risk of overspending, and ensure continued compliance with grant requirements and sound fiscal management practices. These measures will promote accountability while providing reasonable internal controls appropriate for the size and structure of the organization.

CRMHS management concurs with the finding. During the fiscal year ended June 30, 2025, CRMHS did not consistently operate internal controls over federal cash management as designed. Specifically, a federal draw was processed in excess of immediate cash needs and was not fully reconciled to supporting allowable expenditures prior to submission. This resulted in federal funds being drawn in advance of program disbursement requirements. Management acknowledges that this practice does not comply with 2 CFR §200.305, which requires non-federal entities to minimize the time between drawdown of federal funds and their disbursement for program purposes. While the funds were ultimately expended on allowable program costs, the timing of the draw created a compliance exception and reflects a material weakness in internal control over compliance. Management takes this matter seriously and has implemented corrective measures to strengthen cash management oversight and reconciliation procedures. Such actions include: CRMHS has completed a full reconciliation of all drawdowns under Assistance Listing 93.696 to supporting allowable expenditures through June 30, 2025. • Any excess cash balances identified were evaluated and adjusted to ensure compliance with federal cash management requirements. • Pre-Draw Reconciliation Requirement—No draw request may be submitted without documented reconciliation to recorded allowable expenditures. • Segregation of Duties and Review—the draw request and documented reconciliation will be reviewed and signed off on by a second qualified member of the accounting team. • Monthly Grant Cash Monitoring—CRMHS will compare cumulative drawdowns to cumulative allowable expenditures to identify and resolve any excess cash position.

Sliding Fee Documentation Type: Material Weakness in Internal Control Over Compliance Corrective Actions: - Ensure complete documentation is obtained and retained. - Implement monitoring and periodic reviews. - Provide staff training. Responsible Parties: Chief Executive Officer and Chief Financial Officer

Cash Management Type: Material Weakness in Internal Control Over Compliance Corrective Actions: - Implement reconciliation of each drawdown to actual expenditures. - Require detailed supporting documentation. - Establish supervisory approval process. Responsible Parties: Chief Executive Officer and Chief Financial Officer

Finding Number: 2025-053 Finding Name: Inadequate Procedures to Determine and Document Beneficiary Eligibility Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) could not locate case file documentation supporting certain eligibility requirements for beneficiaries of the Children’s Health Insurance Program (CHIP) and Medicaid Cluster program. Additionally, the auditors noted that the State does not have adequate resources to perform and document eligibility determinations. Additionally, the State has not established appropriate monitoring procedures to ensure eligibility determinations are properly documented in accordance with program requirements. Name of Contact Person(s): Clarrissa Hupp, Senior Public Service Administrator – Illinois Department of Healthcare and Family Services, Bureau of Eligibility Administration Corrective Action(s): The DHFS will reinforce (through training) with the eligibility workers the requirement to remove the COVID overrides, maintain the support required for eligibility determinations and process redeterminations timely. The DHFS will continue to identify and redetermine eligibility for the 19-year-old population group monthly by systemically identifying and manually redetermining eligibility. In addition, the DHFS will monitor the status of the Project Initialization Request (54841), which is the system change request written to ensure eligibility that is closed in the Illinois Eligibility System (IES) is also closed in the payment system, the Medicaid Management Information System (MMIS). Efforts continue on troubleshooting the various causes of eligibility being closed on the IES and remaining open or more often being reopened on the MMIS. Once validated solutions are reached, a new PIR will be logged and implemented. During the interim, the DHFS will continue to run the monthly procedure to reconcile the systems. The DHFS is averaging around 4,000 eligibility closures per month through its special MMIS update process. Proposed Completion Date: January 1, 2027

Finding Number: 2025-052 Finding Name: Failure to Communicate Award Information to Subrecipients Finding Condition(s): The Illinois Department of Healthcare and Family Services (DFHS) did not communicate required information in its award documents to subrecipients of the Child Support Services (CSS) program. Additionally, the auditors noted that the DHFS has not established internal controls at a sufficient level of precision to detect whether all required information has been communicated to each subrecipient in accordance with federal regulations. Name of Contact Person(s): Tom Gentry, Bureau Chief, Bureau of Fiscal Operations - Illinois Department of Healthcare and Family Services, Division of Finance Corrective Action(s): The DHFS adopted a policy beginning 07/01/25 that these agreements are of a vendor arrangement instead of a subrecipient relationship, and therefore, will not require the elements discussed in the finding. Proposed Completion Date: July 1, 2025 – Complete

Finding Number: 2025-050 Finding Name: Failure to Report Drug Rebates on the Medicaid CMS 64 Report in a Timely Manner Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not accurately report certain Medicaid Cluster program drug rebates on quarterly federal financial (CMS 64) reports. The auditors also noted that the DHFS did not obtain approval from USDHHS relative to how these prior period adjustments should be reported. Additionally, in considering the reporting process for the CMS-64 report, the auditors noted that the DHFS does not perform analytical or other procedures during the report preparation process at a level of precision to ensure amounts reported are reasonable in relation to previously reported information or expectations relative to current program activities. Name of Contact Person(s): Jamie Tripp, Deputy Finance Administrator - Illinois Department of Healthcare and Family Services Corrective Action(s): The DHFS will work with its incoming pharmacy benefit manager information technology system vendor to develop drug rebate billing reports containing the data elements and level of detail requested by the auditors. The incoming pharmacy benefit manager information technology system vendor is currently projected to begin services on April 1, 2027. Therefore, the estimated completion date will be the first quarter of State fiscal year 2028. Proposed Completion Date: September 30, 2027

Finding Number: 2025-049 Finding Name: Failure to Perform Drug Rebate Activities within Required Timeframes Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not perform certain Medicaid Cluster program drug rebate activities within required timeframes. Additionally, the auditors noted that the DHFS has not established adequate internal control procedures to ensure drug rebate activities are performed within required timeframes and appropriate corrective actions are taken. Name of Contact Person(s): Jamie Tripp, Deputy Finance Administrator - Illinois Department of Healthcare and Family Services Corrective Action(s): The DHFS noted in the cause statement above and as discussed below, the reason for the late invoicing for calendar year 2024 quarter four was an information technology system issue with the contracted pharmacy benefit manager (PBMS) vendor which was beyond the DHFS’ control. After identifying the information system error, the DHFS elected to delay issuance of invoices until the system corrections were completed. This decision was made to prevent the distribution of inaccurate invoices to drug manufacturers for that invoicing cycle. The DHFS does track outstanding drug rebate receivables but will focus efforts on collections of amounts outstanding beyond the federal guidelines. To this end, 1. The DHFS will research and develop a delinquent drug rebate collection plan that is compliant with relevant federal and State laws. (Proposed Completion Date: 01/31/27) 2. The DHFS will implement the finalized collection plan. (Proposed Completion Date: 06/30/27) Proposed Completion Date: June 30, 2027

Finding Number: 2025-047 Finding Name: Failure to Properly Report Medicaid Overpayments Identified by the Medicaid Fraud Control Unit Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not properly report monetary recoveries of overpayments identified by the Medicaid Fraud Control Unit (MFCU) on its quarterly CMS-64 report. The auditors also noted that the DHFS has not established internal controls at a sufficient level of precision to ensure all overpayments identified and recovered by the MFCU are communicated, tracked, and properly reported on the quarterly CMS-64 report. Specifically, there is no formal reconciliation process between the Attorney General's recovery records, the MFCU closed-case database, and the overpayment amounts reported on the CMS-64 report. Name of Contact Person(s): • Jennifer Bourn, Bureau Chief, Bureau of Federal Finance - Illinois Department of Healthcare and Family Services, Division of Finance • Beth Walker, Assistant Bureau Chief, Bureau of Federal Finance - Illinois Department of Healthcare and Family Services, Division of Finance Corrective Action(s): The DHFS will complete the following corrective actions: 1. The DHFS will form a workgroup to meet with the other agencies in the coordination of documented Medicaid Fraud recoveries reconciliation practices and operational procedures to ensure MFCU-identified overpayments are properly reported on the quarterly CMS-64 report in accordance with program regulations. 2. Federal Claiming Guide: a. The DHFS will incorporate language into agency-specific federal claiming guides detailing the requirement to report recoveries, including but not limited to MFCU, to DHFS for the return of Federal Financial Participation (FFP) as applicable and/or required in accordance with program regulations. b. The DHFS to distribute agency-specific federal claiming guides and receive signed acknowledgement of requirements detailed within, including reporting Medicaid Fraud recoveries to DHFS for return of FFP. 3. Ongoing Monitoring: a. Continue quarterly review of MFCU recoveries and verification from other agencies on potential returns of FFP. b. Ensure documentation related to MFCU recoveries accompanies federal reporting support for the return of FFP. Completion Date: March 31, 2027

Finding Number: 2025-046 Finding Name: Inadequate Procedures to Determine Provider Eligibility Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) has not established adequate procedures to ensure providers of the Medicaid Cluster program meet all of the State and Federal provider eligibility requirements. Name of Contact Person(s): Susie Cooper, Interim Bureau Chief, Provider Enrollment Services – Illinois Department of Healthcare and Family Services, Medical Division Corrective Action(s): While this finding is in the area related to provider eligibility, it should be noted that the issues reported in the condition above are completely different than those noted in the previous audit reports for the finding containing the same title, 2024 020, 2023 021, 2022 015, and 2021 006. The issue in those reports related to checking the List of Excluded Individuals/Entities, which has been corrected by the DHFS and is not noted as an issue in this audit. Below are the corrective actions as they pertain to the FY25 finding. • The Illinois Medical Program Advanced Cloud Technology (IMPACT) system is used by the DHFS for the enrollment and screening of Medicaid providers. The Illinois Department of Public Health (IDPH) is the licensing agency responsible for conducting facility surveys and issuance of facility licensure. Currently, the IMPACT system does not have a licensing interface with the IDPH to systematically verify facility licensure. As a result, staff manually verify licensure on the IDPH’s website. The first bullet point indicates the provider did not have a valid license in the IMPACT system; however, the provider did in fact have a valid license in IMPACT. Staff verified the license on the IDPH website to ensure the license was current in the IMPACT system. The issue noted is that when the auditors requested a copy of the physical license from the IDPH, it could not produce a hard copy that covered 3 months of the audit period. It was not that the provider was not licensed, it was an issue with locating the documentation to support. This is an IDPH function and the DHFS does not have access to these physical copies or any control over the IDPH retaining these. • The second bullet point indicates license numbers in IMPACT did not match with the IDPH. Providers are responsible for entering and maintaining their enrollment information in the IMPACT system, including their applicable licensure. The license number is used for informational purposes only. While staff verified that both providers had valid licenses with the IDPH, the license numbers listed in IMPACT did not match the IDPH license they verified. The discrepancy was due to staff oversight and the DHFS agrees the license numbers should have been updated. The DHFS will work with staff immediately to ensure discrepancies such as this are addressed during the review process. • The third bullet point indicates recertification surveys were not completed timely. The IDPH is the Statewide Survey Agency responsible for conducting facility surveys. The DHFS is not responsible for performing or scheduling these surveys and has no control over timeliness. If the IDPH suspends a facility’s license due to survey findings, the DHFS will take appropriate action, including suspension of payments. Effective immediately, the DHFS will retrain staff on licensure verification procedures to ensure manual verification against the IDPH website are thoroughly documented and reflected accurately in IMPACT and ensure that any identified license discrepancies are addressed during the review process. Proposed Completion Date: November 1, 2026

Finding Number: 2025-043 Finding Name: Failure to Discontinue CHIP Benefits for Ineligible Individuals Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) improperly continued providing benefits under the Children’s Health Insurance Program (CHIP) program to individuals who were over the age of 18. In addition, the auditors noted that the DHFS has not established adequate controls to identify and remove individuals over the age of 18 from the CHIP program and to determine if they are eligible for benefits under the Medicaid Cluster program. Name of Contact Person(s): • George Jacaway, Deputy Administrator - Illinois Department of Healthcare and Family Services, Division of Eligibility • Jacqueline Myers, Bureau Chief - Illinois Department of Healthcare and Family Services, Division of Eligibility Corrective Action(s): The DHFS implemented a monthly process to identify 19+ year old CHIP recipients and submits this list each month for caseworker action. This will continue on an ongoing basis. As of October 2026, there are fewer than 100 cases currently past due. Proposed Completion Date: May 31, 2025 – Complete

Finding Number: 2025-041 Finding Name: Inaccurate RSA-911 Performance Reports for the Vocational Rehabilitation Program Finding Condition(s): The Illinois Department of Human Services (IDHS) does not have an adequate process in place to ensure the Case Service Report (RSA-911) performance report for the Rehabilitation Services Vocational Rehabilitation Grants to States (Vocational Rehabilitation) program is complete and accurate. Additionally, the auditors noted that the supervisory review procedures performed for this report were not designed to operate at an appropriate level of precision to ensure the special report was accurately prepared. Name of Contact Person(s): Rochelle Chambers-Hyndman, Audit and Quality Assurance Administrator – Illinois Department of Human Services, Division of Rehabilitation Services Corrective Action(s): The IDHS has adjusted the report query to obtain the information needed for reporting from the case management system. The new query will ensure that the information is accurate and agrees to data documented in the program beneficiary case file. Additionally, the IDHS will implement a quarterly review process to ensure reports submitted are complete, accurate, and agree with the case management system and underlying file documentation. Proposed Completion Date: October 31, 2026

Finding Number: 2025-040 Finding Name: Inadequate Procedures to Determine Accuracy of the Post Expenditure Report Finding Condition(s): The Illinois Department of Human Services (IDHS) did not maintain or 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. Additionally, the auditors noted that effective internal controls have not been established to ensure supporting documentation is maintained for data reported in the post-expenditure report key line items. Name of Contact Person(s): • Elizabeth Lusk, Social Service Program Planner – Illinois Department of Human Services, Family and Community Services • Kasey Reagan, Division Director – Illinois Department of Human Services, Family and Community Services Corrective Action(s): The IDHS has established uniform procedures to ensure the maintenance of documentation supporting the post-expenditure report. These procedures include those listed below. Additionally, the IDHS will establish a supervisory review process to ensure the report is complete, accurate, and properly supported. • The IDHS’ Family and Community Services (FCS) team emailed notification to all grantees of the requirement to include a client identifier when reporting the number of eligible clients served. (Completed as of 07/01/24) • The IDHS’ Family and Community Services (FCS) team updated its Fiscal Year 2026 Title XX Program Manual to include client identifier as a reporting requirement. The update included the process of how and when the data will be collected. (Completed as of 04/01/25) • The IDHS shifted from annual to quarterly reporting for the post-expenditure report. This change will ensure the report is complete, accurate, and properly supported. (Completed as of 06/30/26) • The IDHS updated the funding requirements to include Social Services Block Grant (SSBG) reporting requirements. (Completed as of 06/30/26) • Supervisory review and approval of the report by the end of the first quarter of the Fiscal Year 2027, ended September 30th. (Proposed Completion Date: 10/30/26) Proposed Completion Date: October 30, 2026 - Complete

Finding Number: 2025-039 Finding Name: Inaccurate Annual TANF ACF-204 Special Report Finding Condition(s): The Illinois Department of Human Services (IDHS) does not have an adequate process in place to ensure the ACF-204, annual special report for the Temporary Assistance for Needy Families (TANF) program is complete and accurate. The auditors also noted that the IDHS does not perform analytical or other procedures during the report preparation process to ensure amounts reported are reasonable in relation to previously reported information or expectations relative to current program activities. Finally, the auditors noted that the supervisory review procedures are not designed to operate at a level of precision to identify errors of this nature. Name of Contact Person(s): Sarah Eves, Deputy Chief Financial Officer – Illinois Department of Human Services, Division of Rehabilitation Services Corrective Action(s): The IDHS will implement additional controls to ensure the data is obtained, compiled, and reviewed to ensure complete and accurate reporting on the ACF-204. Specific IDHS corrective actions are as follows: • Work with the Illinois Department of Healthcare and Family Services (HFS) staff to supply any missing reports, to date. (Completed as of 08/19/26) • Ensure IDHS staff are included in report distribution. (Completed as of 08/24/26) • Develop procedures for the review of supporting schedules which 1) ensure all monthly reports were obtained from the HFS and 2) ensure any reports that are missing will be obtained prior to the submission of the ACF-204. (Proposed Completion Date: 11/01/26) • Develop procedures for review of the reasonableness of amounts reported; comparison of current year ACF-204 data to prior year report data; and further review of significant variances between current year data and prior year data. (Proposed Completion Date: 11/01/26) • Supervisory review of report and supporting documentation prior to the submission to the federal government, including review of any variances between current year and prior year data. (Proposed Completion Date: 11/14/26) Proposed Completion Date: November 14, 2026

Finding Number: 2025-038 Finding Name: Failure to Monitor Child Care Provide Health and Safety Requirements Finding Condition(s): The Illinois Department of Human Services (IDHS) did not perform monitoring reviews of health and safety requirements for providers of the Child Care Development Fund Cluster (CCDF) program. The auditors also noted that the IDHS has not established monitoring or other control activities to ensure health and safety monitoring reviews are performed for all child care providers as required by State and Federal law. Additionally, as of the date of the auditors’ testing, the IDHS has not evaluated the population of providers to determine if there are other providers for which reviews were not performed. Name of Contact Person(s): Maureen Bilek, Audit Compliance and Programmatic Monitoring Administrator – Illinois Department of Human Services, Division of Early Childhood (DEC) Corrective Action(s): The IDHS has increased its staffing capacity. Additionally, as of July 1, 2026, this program has transitioned to the Illinois Department of Early Childhood (IDEC), and the IDHS understands that the IDEC is continuing efforts to fill remaining vacancies. The IDHS (and now IDEC) have revised policies and procedures and associated training and have implemented additional monitoring and oversight tools to track and monitor inspections to ensure inspections are conducted timely and in compliance with requirements. Specific IDHS corrective actions are as follows: Licensed Providers • Recruit, hire and onboard eight additional managers to strengthen management capacity, provide support to licensing representatives, and enhance the supervision and monitoring of child care provider health and safety requirements and licensing operations. (Completed as of 08/26/26) • Continue to increase staffing capacity by recruiting, hiring, and onboarding five Day Care Licensing Representatives and one additional manager to strengthen licensing operations, ensure continuity of services, and enhance the capacity to conduct timely and consistent monitoring activities. The additional staffing will support effective oversight and monitoring of child care providers. (Proposed Completion Date: 02/15/27) • Analyze automation needs and identify opportunities to enhance processes for alerting licensing staff of upcoming annual inspection due dates. (Proposed Completion Date: 03/31/27) • Train newly hired managers and Day Care Licensing Representatives on internal licensing procedures and requirements to ensure annual health and safety inspections are completed within the required timeframes. (Proposed Completion Date: 05/31/27) Licensed Exempt Providers • Draft updated the Monitoring & Enforcement Policy & Procedure Guide for IDHS’ Leadership approval. (Completed as of 08/20/26) • Receive IDHS’ Leadership approval of the Monitoring & Enforcement Policy & Procedure Guide. (Proposed Completion Date: 11/15/26) • Meet weekly to track monitoring activities to ensure deadlines are met. (Proposed Completion Date: 11/15/26) • Audit and update all associated forms, checklists, and correspondence for the IDHS’ Monitoring/Enforcement team. (Proposed Completion Date: 11/15/26) • Create a PowerPoint training module for the IDHS’ Monitoring/Enforcement team. (Proposed Completion Date: 11/15/26) • Schedule initial training session for the IDHS’ Monitoring/Enforcement team to orient it to the updated procedures. (Proposed Completion Date: 11/15/26) • Hold initial training, curate users’ questions for post-training launch of FAQs. (Proposed Completion Date: 11/15/26) • Issue formal communication to all providers about anticipating vigorous engagement for support, education, monitoring, and enforcement. (Proposed Completion Date: 12/01/26) • Finalize and issue FAQs to internal staff, based on training inputs. (Proposed Completion Date: 12/01/26) • Monitor incoming customer service inquiries for sentiment, needs, and questions after strengthening the IDHS’ Monitoring team’s resources and communicating expectations to providers. (Proposed Completion Date: 12/01/26) • Maintain monthly workgroup sessions with working team for continual process improvement and team education. (Proposed Completion Date: 12/01/26) • Maintain internal panel review on monthly basis of provider status, needs, and upcoming actions to schedule. (Proposed Completion Date: 12/01/26) Proposed Completion Date: May 31, 2027

Finding Number: 2025-037 Finding Name: Inadequate Process to Communicate Award Information to Subrecipients Finding Condition(s): The Illinois Department of Human Services (IDHS) does not have an adequate process in place to ensure required award information is accurately communicated to subrecipients of the Women, Infants, and Children (WIC), Temporary Assistance for Needy Families (TANF), Child Care Development Fund Cluster (CCDF), Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Name of Contact Person(s): Brian Bond, Director – Illinois Department of Human Services, Office of Contract Administration Corrective Action(s): The IDHS’ Office of Contract Administration (OCA) staff coordinated with IDHS’ Fiscal Services, Bureau of Federal Reporting staff and the Illinois Department of Innovation and Technology (DoIT) staff in 2024 and 2025 to create an Application Programming Interface (API) between the IDHS grant making system and the IDHS accounting system to perform a coding validation look-up that auto-populates the award coding information which is designed to eliminate end user manual entry errors. Proposed Completion Date: May 1, 2025

Finding Number: 2025-035 Finding Name: Failure to Follow Established Program Subrecipient Monitoring Procedures Finding Condition(s): The Illinois Department of Human Services (IDHS) did not follow its established program monitoring policies and procedures for subrecipients of the Temporary Assistance for Needy Families (TANF), Child Care Development Fund Cluster (CCDF), Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Further, the IDHS did not have adequate policies or procedures to ensure fiscal and administrative reviews were completed timely to detect potential non compliance. Name of Contact Person(s): • Rochelle Chambers-Hyndman, Audit and Quality Assurance Administrator – Illinois Department of Human Services, Division of Rehabilitation Services (DRS) • Christina Miller, Fund Disbursement Manager – Illinois Department of Human Services, Prevention and Treatment of Substance Abuse (SAPT) Program • Kasey Reagan, Division Director – Illinois Department of Human Services, Family and Community Services (FCS) • Maureen Bilek, Audit Compliance and Programmatic Monitoring Administrator – Illinois Department of Human Services, Division of Early Childhood (DEC) Corrective Action(s): This finding covers multiple programs and requires corrective actions from various divisions with the IDHS, including the DRS, the SAPT Program area, the FCS, and the DEC. In summary, the IDHS will work to ensure programmatic on-site and expenditure report reviews are completed and documented in accordance with policies and procedures and will review its process for reporting and follow up on program findings resulting from on-site reviews. Additionally, the IDHS will continue to work to fill vacancies, administer training programs, increase oversight, develop automated processes, implement tracking tools, and review and revise procedures to improve internal controls over these functions. Specific corrective actions from each division are listed below. DRS • Establish written policies and procedures. (Proposed Completion Date: 01/31/27) • Identify roles and responsibilities, including back-up roles. (Proposed Completion Date: 01/31/27) • Publish programmatic review cycle or timetable for the SSBG. (Proposed Completion Date: 01/31/27) • Create OneDrive folders to house all programmatic onsite reviews. (Proposed Completion Date: 08/31/26) • Evaluate effectiveness of policies and procedures biannually. (Proposed Completion Date: 01/31/27) SAPT Program • Hire an administrative assistant to assist with compliance monitoring tracking activities to maintain communication about important deadlines. (Completed as of 03/01/25) • Hire compliance monitors to engage in conducting compliance reviews. (Completed as of 02/17/26) • Meet weekly to track monitoring activities to ensure deadlines are met. (Completed as of 08/30/26) • Review policy and procedures to assess timelines associated with the monitoring process. (Completed as of 08/30/26) • Train all monitors to use the updated tool, templates, and updated policies and procedures. (Completed as of 08/30/26) FCS • The SSBG team is requiring program managers to submit required proof of monitoring annually to centralize records and identify programs and grantees that were not compliant. This step will occur every fiscal year to allow reverification of records and monitoring requirements and awareness across multiple divisions of compliance. (Proposed Completion Date: 05/30/27) • The SSBG team informed all program/grant managers that failure to maintain monitoring compliance could result in reduction or denial of access to SSBG funds. This is the second year this step has occurred. Starting in FY28, non-compliance will result in executive review of award amount. (Proposed Completion Date: 05/30/27) • The SSBG team created a unified dashboard of monitoring for all offices and grantees to track compliance, last visit dates, and to advise divisions and offices of monitoring requirements. The IDHS continues to follow up with all teams who are out of compliance. Non-responsive teams and teams who continue to be out of compliance risk losing or having reduced awards. (Completed as of 09/30/26) • The SSBG team will send follow up messages to program managers across the agency whose records were missing, incomplete, or lacking sufficient information to determine if monitoring had occurred. (Completed as of 08/31/26) • The SSBG Monitoring team will utilize the plan to eliminate the backlog of subrecipient monitoring reviews to reach full compliance across all SSBG funded programs. (Proposed Completion Date: 07/31/27) • The IDHS’ Office of Workforce Development (OWD) Leadership met with staff responsible for annual monitoring to reinforce the need for thorough, accurate, and timely adherence to established processes and timeframes. Leadership reviewed the FY26 Monitoring Standard Operating Procedures (SOP) and Checklist, made updates based on staff feedback, and posted the final version to SharePoint. These expectations continue to be emphasized in weekly meetings with monitoring staff. (Completed as of 03/04/26) • OWD Associate Director and Manager hosted Monitoring Office Hours every Monday and Friday to answer staff questions and ensure adherence to the new Monitoring SOP. (Completed as of 04/30/26) • OWD Leadership has implemented tracking tools and incorporated them into the ongoing office workflow. Leadership will continue regular follow-up with staff to ensure full adherence to the Monitoring SOP. (Completed as of 06/30/25) • OWD Leadership is reinforcing the importance of Monitoring SOP compliance by incorporating adherence into annual performance evaluations for staff who conduct monitoring. (Completed as of 06/30/25) • The IDHS’ Office of Community and Positive Youth Development (OCPYD) hired one new staff person in March 2023. In fiscal year 2024, seven site visits were conducted in person. In fiscal year 2025 and fiscal year 2026, in-person site visits were conducted for 100% of providers in this program. Beginning in fiscal year 2027 (07/01/26), the IDHS’ Comprehensive Community Based Youth Services Program (CCBYS) was transferred to the Illinois Department of Children and Family Services (DCFS) and is no longer with the IDHS. (Completed as of 06/30/26) • The OCPYD program staff retained a time-stamped email replying to the three providers included in this audit that their in-person site visit was completed, and there were no findings. (Completed as of 06/30/26) DEC • Develop and implement a standardized deadline tracking tool to monitor review completion dates and required subrecipient notifications, including documented supervisory review and management oversight to ensure timeliness. (Completed as of 03/16/26) • Establish and implement internal corrective action plan (CAP) procedures that outline standardized processes for CAP tracking, documentation, escalation efforts, and define protocols when subrecipients fail to submit required CAPs within established timeframes (Completed as of 09/30/26) • Initiate and implement a CAP tracking tool to monitor review dates, findings issuance, subrecipient notification dates, CAP receipt, and implementation follow-up activities, with documented management oversight and approval to ensure timeliness, accountability, and consistent monitoring. (Completed as of 07/01/25) • Conduct formal staff training on procedures for accurately completing and maintaining the CAP tracking tool, including documentation standards, required data elements, and supervisory review expectations to ensure consistent and compliant use. (Completed as of 12/10/25) • Increase management capacity to provide supervision and oversight of programmatic monitoring activities, including monitoring review completion and provider notification timeframes. Management will routinely review monitoring activity and tracking information to identify outstanding or approaching deadlines. (Completed as of 08/03/26) • Continue implementation and finalize the centralization of subrecipient monitoring activities for the Home Visiting program to ensure consistent oversight of monitoring schedules, completion of reviews, timely notification of findings, and tracking and follow-up of corrective actions through resolution. (Proposed Completion Date: 06/30/27) • Complete required training for Home Visiting monitoring staff to ensure staff have the knowledge and skills necessary to consistently perform and document subrecipient monitoring reviews, communicate findings in a timely manner, and track and follow up on corrective actions through resolution in accordance with established policies and procedures. (Proposed Completion Date: 06/30/27) Proposed Completion Date: July 31, 2027

Finding Number: 2025-033 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. The auditors also noted that one TANF beneficiary payment was improperly calculated due to a diverted income system error. Further, the auditors noted that the IDHS did not establish control procedures at an adequate level of precision to ensure TANF program benefits were accurately calculated based on the beneficiary’s case file supporting documentation. Name of Contact Person(s): • Elizabeth Lusk, Social Service Program Planner – Illinois Department of Human Services, Family and Community Services • Kasey Reagan, Division Director – Illinois Department of Human Services, Family and Community Services Corrective Action(s): The IDHS reviewed its current process for calculating beneficiary payments and make changes necessary to ensure payments are properly calculated and paid. Furthermore, Temporary Assistance for Needy Families (TANF) training was provided in 2026 to address policies and procedures. Additionally, monthly communications have been established by the Associate Director for the Office of Family and Community Resource Centers (FCRCs) to ensure TANF reviews are prioritized and findings are addressed. Finally, agency leadership has scheduled needed system enhancements. The IDHS has noted the following actions for implementation: • A repair ticket has been issued and will be released in the Illinois Eligibility System (IES) on the diverted income error. The original ticket was combined with a larger TANF budgeting ticket to ensure all factors are functioning in accordance with policy. This ticket is currently awaiting a final release date. (Proposed Completion Date: 08/31/27) • An IES enhancement will be implemented to allow telephonic signatures for TANF Responsibility and Service Plans (RSPs). This will eliminate the need to use a paper process. (Proposed Completion Date: 03/31/27) • TANF training was released in April 2026 to all staff to ensure proper documentation for TANF programs, specifically targeting the RSP signatures and child support documentation rules and regulations. (Completed as of 04/30/26) • Regional Administrators will discuss TANF review trends and RSP signature errors with their Local Office Administrators (LOAs) monthly during their regularly scheduled LOA meeting or via email to ensure ongoing priority is given to this matter. (Proposed Completion Date: 12/31/26) • Regional Administrators will track the number of TANF completed reviews for the 4th quarter of 2026, and then again in 1st quarter of 2027, to compare date trends. Specifically, they will note the number of correct cases and the number of reviewed cases missing RSP signatures (Proposed Completion Date: 12/31/26) Proposed Completion Date: August 31, 2027

Finding Number: 2025-032 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), the Children’s Health Insurance Program (CHIP), and the Medicaid Cluster program. The auditors also noted the State does not have adequate resources to perform and document eligibility determinations. Additionally, the State has not established appropriate monitoring procedures to ensure eligibility determinations are properly documented in accordance with program requirements. Name of Contact Person(s): • Elizabeth Lusk, Social Service Program Planner – Illinois Department of Human Services, Family and Community Services • Kasey Reagan, Division Director – Illinois Department of Human Services, Family and Community Services Corrective Action(s): The IDHS will work to ensure that support for all eligibility items is properly retained in the record. Improved collection and retention of eligibility items will be achieved through Integrated Eligibility System (IES) enhancements and through implementation of quarterly administrative reviews of TANF cases to track trends and address any issues identified. Specific corrective actions include the following: • An IES enhancement will be implemented to allow telephonic signatures for TANF Responsibility and Service Plans (RSPs). This will eliminate the need to use a paper process. (Proposed Completion Date: 03/31/27) • Regional Administrators will discuss TANF review trends and RSP signature errors with their Local Office Administrators (LOAs) monthly during their regularly scheduled LOA meeting or via email to ensure ongoing priority is given to this matter. (Proposed Completion Date: 12/31/26) • Regional Administrators will track the number of TANF completed reviews for the 4th quarter of 2026, and then again in 1st quarter of 2027, to compare data trends. Specifically, they will note the number of correct cases, the number of reviewed cases missing RSP signatures, and the number of budgeting errors. (Proposed Completion Date: 12/31/26) Proposed Completion Date: March 31, 2027

Finding Number: 2025-030 Finding Name: Inadequate Review of Recipient Agencies of the Food Distribution Cluster Program Finding Condition(s): The Illinois Department of Human Services (IDHS) did not adequately review the recipient agencies of the Food Distribution Cluster (FDC) program. Name of Contact Person(s): • Elizabeth Lusk, Social Services Program Planner – Illinois Department of Human Services, Family and Community Services • Kasey Reagan, Division Director – Illinois Department of Human Services, Family and Community Services Corrective Action(s): The IDHS’ program and fiscal officials will take steps to address the deficiencies noted, including collection of inventory records and appropriate reviews. Steps taken include the following: • The IDHS The Emergency Food Assistance Program (TEFAP) will include the requirement that an annual inventory count and reconciliation of inventory records be submitted for all recipient agencies at the end of each State fiscal year in the SFY27 Procedure Manual. Contract exhibits and the procedure manual has been updated, approved by leadership, and all providers have been notified. (Completed as of 07/01/26) • Five of the seven food banks have submitted annual inventory counts. The IDHS’ receipt of inventory is based on individual food bank annual count schedule. The TEFAP is in the process of reviewing and reconciling those count that have been received. The final due date for the last two food banks is 08/28/26. Reconciliations will be completed by 09/15/2026 and then the IDHS will finalize its documentation. (Proposed Completion Date: 10/31/26) • The IDHS has implemented a Risk-Based Evaluation System to determine when management evaluation/quality assurance monitoring will be conducted. Previously, the monitoring schedule was based on every four years. This has been updated. (Completed as of 03/01/26) Proposed Completion Date: October 31, 2026

Finding Number: 2025-025 Finding Name: Inadequate Process for Foster Care Daycare Maintenance Assistance Payments Finding Condition(s): The Illinois Department of Children and Family Services (DCFS) does not have an adequate process in place to ensure Foster Care daycare maintenance assistance payments are accurately paid based on its approved rate schedule. Name of Contact Person(s): • Stacy Mixon, Daycare Eligibility Administrator – Illinois Department of Children and Family Services • Will Blount-Stephens, Deputy Director – Illinois Department of Children and Family Services, Office of Contract Administration • Kiersten Neswick, Chief Fiscal Officer – Illinois Department of Children and Family Services Corrective Action(s): All childcare providers now receive the State-established reimbursement rate, regardless of the rate they charge private-paying families. This change ensures that all childcare providers receive the funding that they are entitled to. Proposed Completion Date: July 1, 2025 – Complete

Finding Number: 2025-018 Finding Name: Failure to Perform Cash Draws in Accordance with the Treasury State Agreement Finding Condition(s): The Illinois Department of Commerce and Economics Opportunity (DCEO) did not perform its cash draws in accordance with the funding technique prescribed in the Treasury State Agreement (TSA). Additionally, the auditors noted that internal controls have not been established to ensure cash draws are calculated and requested in accordance with Treasury regulations and the funding technique prescribed by the Treasury-State agreement. Name of Contact Person(s): • Lisa Clement, Audit and Resolution Manager – Illinois Department of Commerce and Economic Opportunity • Jared Ebel, Chief Accountability Officer – Illinois Department of Commerce and Economic Opportunity • Phil Keshen, Deputy Director – Illinois Department of Commerce and Economic Opportunity, Office of Fiscal Management Corrective Action(s): The DCEO’s Office of Financial Management requested that the Governor’s Office of Management and Budget (GOMB) change the funding technique for the Low-Income Home Energy Assistance Program within the Treasury-State Agreement to Pre-Issuance. This change eliminates the need to re-certify to the accuracy of the clearance pattern. GOMB approved the change to the Treasury-State Agreement for Fiscal Year 2026. Proposed Completion Date: July 1, 2025 – Complete