Corrective Action Plans

Finding 1207070 (2024-032)

Material Weakness 2024

State of Illinois

IL

Reporting Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.303

Finding Number: 2024-032 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)...

Finding Number: 2024-032 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 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, including a second-level review of reports prior to submission. Finally, the IDES implemented procedures for the preparation, the review, and the approval of the reports. Proposed Completion Date: April 30, 2025 - Completed

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Finding 1207068 (2024-031)

Material Weakness 2024

State of Illinois

IL

Subrecipient Monitoring Reporting Matching / Level of Effort / Earmarking § 200.303

Finding Number: 2024-031 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 Insura...

Finding Number: 2024-031 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. The auditors also noted that the IDES does not perform analytical or other procedures over previously reported information or expectations relative to current program activities. Additionally, supervisory review procedures are not designed to operate at a level of precision to identify errors of this nature. Name of Contact Person(s): Kelly McGrath, Manager of Accounting and Reporting – Illinois Department of Employment Security, Accounting and Reporting Corrective Action(s): The IDES hired a Grant Accountant Supervisor and has a new Senior Accountant starting in February 2026. Accounting has been training the new Grant Accountant Supervisor and will be training the new Senior Accountant on how to review and complete 9130 reports. Accounting will review current procedures to determine ways to improve controls over preparation, reviews, and approvals. The IDES, as a whole, will be looking for ways to strengthen internal controls over its multiple divisions to ensure data is complete and accurate. Proposed Completion Date: June 30, 2026

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Finding 1207066 (2024-030)

Material Weakness 2024

State of Illinois

IL

Eligibility Matching / Level of Effort / Earmarking Procurement, Suspension & Debarment § 200.303

Finding Number: 2024-030 Finding Name: Unemployment Benefit Payments to Ineligible Claimants Finding Condition(s): The Illinois Department of Employment Security (IDES) failed to follow established policies when making eligibility determinations for claimants of the Unemployment Insurance (UI) progr...

Finding Number: 2024-030 Finding Name: Unemployment Benefit Payments to Ineligible Claimants Finding Condition(s): The Illinois Department of Employment Security (IDES) failed to follow established policies when making eligibility determinations for claimants of the Unemployment Insurance (UI) program. Additionally, the auditors noted adequate internal controls have not been established to ensure necessary changes resulting from the conclusion of pandemic related provisions are made to UI eligibility procedures in a timely manner. Name of Contact Person(s): Mireya Hurtado, Deputy Director – Illinois Department of Employment Security, Service Delivery Corrective Action(s): The technical solution was implemented within the Illinois Benefits Information System (IBIS) in April 2024 to restore system edits, cross-matches, and related processes that had been deactivated or modified during the pandemic. The Department has also reorganized and expanded training procedures and materials for staff reviewing claim eligibility and established new monitoring tools and reports to help monitor compliance with procedures. Proposed Completion Date: March 31, 2025 - Completed

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Finding 1207064 (2024-029)

Material Weakness 2024

State of Illinois

IL

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.303

Finding Number: 2024-029 Finding Name: Failure to Report Subaward Information Required by FFATA Finding Condition(s): The Illinois Community College Board (ICCB) failed to report information required by the Federal Funding Accountability and Transparency Act (FFATA) for awards granted to subrecipien...

Finding Number: 2024-029 Finding Name: Failure to Report Subaward Information Required by FFATA Finding Condition(s): The Illinois Community College Board (ICCB) failed to report information required by the Federal Funding Accountability and Transparency Act (FFATA) for awards granted to subrecipients of the Child Care and Development Fund (CCDF) Cluster. Name of Contact Person(s): Jennifer Franklin, Deputy Director for Finance and Operations - Illinois Community College Board Corrective Action(s): The ICCB will implement corrective actions to ensure full compliance with FFATA reporting requirements for applicable federal subawards. The ICCB will develop and formalize a written FFATA reporting procedure that defines applicability thresholds, required data elements, reporting timelines, and assigned responsibilities. Additionally, the ICCB will assign FFATA reporting responsibilities to a fiscal staff person and integrate FFATA determination and certification steps into the subaward and amendment workflow. Finally, the ICCB will provide targeted training to fiscal and program staff on FFATA requirements. Proposed Completion Date: July 1, 2026

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Finding 1207061 (2024-028)

Material Weakness 2024

State of Illinois

IL

Reporting § 200.303 § 200.502 § 200.510

Finding Number: 2024-028 Finding Name: Inaccurate Reporting of Federal Expenditures Finding Condition(s): The Illinois Student Assistance Commission (ISAC) did not accurately report federal expenditures, including amounts passed-through to subrecipients, under the Child Care Development Fund (CCDF) ...

Finding Number: 2024-028 Finding Name: Inaccurate Reporting of Federal Expenditures Finding Condition(s): The Illinois Student Assistance Commission (ISAC) did not accurately report federal expenditures, including amounts passed-through to subrecipients, under the Child Care Development Fund (CCDF) Cluster. Additionally, the auditors noted ISAC’s controls over reporting federal expenditures, including amounts passed-through to subrecipients, were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Name of Contact Person(s): Rolake Adedara, Chief Financial Officer - Illinois Student Assistance Commission, Finance & Accounting Corrective Action(s): The CCDF Cluster program ended as of June 30, 2024. Lapse period payments (reported on a cash basis) made to beneficiaries during the year ended June 30, 2025, have been properly classified, and are not included as payments to subrecipients on the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2025. Proposed Completion Date: February 28, 2026

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Finding 1207058 (2024-027)

Material Weakness 2024

State of Illinois

IL

Procurement, Suspension & Debarment Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.303

Finding Number: 2024-027 Finding Name: Failure to Report Subaward Information Required by Federally Funded Accountability and Transparency Act (FFATA) Finding Condition(s): The Illinois State Board of Education (ISBE) failed to report subaward information required by the Federal Funding Accountabili...

Finding Number: 2024-027 Finding Name: Failure to Report Subaward Information Required by Federally Funded Accountability and Transparency Act (FFATA) Finding Condition(s): The Illinois State Board of Education (ISBE) failed to report subaward information required by the Federal Funding Accountability and Transparency Act (FFATA) for awards granted to subrecipients of the Education Stabilization Fund (ESF) program. Additionally, the auditors noted that ISBE did not have adequate internal controls in place over FFATA reporting to ensure all subawards were reported as required. Name of Contact Person(s): Andy Krupin, Director – Illinois State Board of Education, Department of Funding and Disbursements Corrective Action(s): When a grant runs longer than its financial systems are accustomed to (two state fiscal years), management in the Department of Funding and Disbursements will maintain and present a list of grants previously approved and reported to FFATA to the principal consultant responsible for FFATA reporting, ensuring the principal consultant has the necessary tools to properly reconcile grants that have previously been reported and those that have not. Then, management will review the list of subrecipient projects prepared by the principal consultant for submission to ensure accuracy prior to the data being reported. Proposed Completion Date: January 1, 2026 – Completed

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Finding 1207051 (2024-026)

Material Weakness 2024

State of Illinois

IL

Subrecipient Monitoring Reporting § 200.303

Finding Number: 2024-026 Finding Name: Untimely Review of Subrecipient Performance Reports Finding Condition(s): The Illinois State Board of Education (ISBE) did not review subrecipient performance reports in a timely manner according to its program monitoring policies and procedures for subrecipien...

Finding Number: 2024-026 Finding Name: Untimely Review of Subrecipient Performance Reports Finding Condition(s): The Illinois State Board of Education (ISBE) did not review subrecipient performance reports in a timely manner according to its program monitoring policies and procedures for subrecipients of the Education and Stabilization Fund - Elementary and Secondary Education (ESF) program for fiscal year 2024. Name of Contact Person(s): • Denise Blaney, Director – Illinois State Board of Education, Title Grant Administration Department • Lazell Logan, Supervisor – Illinois State Board of Education, Title Grant Administration Department • Annie Brooks, Executive Director – Illinois State Board of Education, Regulatory Services Corrective Action(s): To ensure proper review procedures are performed in a timely manner in accordance with its program monitoring policies and procedures, ISBE’s Title Grant Administration Department started to send bi-weekly lists of submitted, past due, and disapproved Grant Periodic Reports (GPRS) to each applicable ISBE department. The Title Grant Administration Department analyzes the GPRS reports and prioritizes reviews based on submission dates. The Title Grant Administration Department also trained team members to assist with the review process. Proposed Completion Date: November 15, 2025 – Completed

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Finding 1207044 (2024-025)

Material Weakness 2024

State of Illinois

IL

Subrecipient Monitoring § 200.303 § 200.332

Finding Number: 2024-025 Finding Name: Inadequate Monitoring of 21st Century Subrecipients Finding Condition(s): The Illinois State Board of Education (ISBE) did not adequately monitor and document program monitoring procedures performed over subrecipients of the 21st Century Community Learning Cent...

Finding Number: 2024-025 Finding Name: Inadequate Monitoring of 21st Century Subrecipients Finding Condition(s): The Illinois State Board of Education (ISBE) did not adequately monitor and document program monitoring procedures performed over subrecipients of the 21st Century Community Learning Centers (21st Century) program. Additionally, ISBE’s internal controls over subrecipient on-site monitoring are not designed at an appropriate level of precision to ensure monitoring of subrecipients is completed, documented, and retained as required by ISBE’s policies and procedures. Name of Contact Person(s): • Jeffrey Judge, Director – Illinois State Board of Education, Wellness and Student Care Management Department • Nehemiah Ankoor, Supervisor; 21st Century Community Learning Centers (CCLC) State Education Agency Coordinator – Illinois State Board of Education, Wellness and Student Care Management Department Corrective Action(s): To ensure that 21st Century Community Learning Centers (21st CCLC) subgrantees’ progress and performance are monitored in accordance with 2 CFR 200.331(d), 2 CFR 200.331(b), and 2 CFR 200.303, Wellness and Student Care Management and the 21st CCLC team developed processes and structures to facilitate the procedures, protocols, and efficacy of subgrantee monitoring. Components of this work included, but were not limited to: • Evaluating and revising the program’s subgrantee risk analysis procedures and tools to ensure that they are relevant and accurately reflect the items/actions that suggest higher levels of subgrantee risk (2 CFR 200.331(b)). Complete. After careful examination, we have revised the risk analysis procedures and tools and have begun using them to inform our fiscal year 2026 monitoring. • Reviewing and revising the procedures and/or documentation that is collected for all three tiers of subgrantee monitoring to ensure that all processes are relevant; are not simply perfunctory; ensure compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that the subaward performance goals are achieved (2 CFR 200.331(d)). Complete. We have determined which of the documents we have historically collected meet those requirements, and we have evaluated all remaining documents (extraneous to ED requirements) to determine which we feel are most necessary to keep and what we are able to discontinue requiring. • Establishing and implementing specific processes and protocols to ensure that all components of subgrantee monitoring are timely, that management reviews and provides approval for key components of the process, and that accurate and complete documentation is produced and maintained (2 CFR 200.303). Complete. The expectations herein have been communicated to staff and have begun to be implemented (i.e. management approval, maintaining documentation, etc.). We still need to ensure that we precisely document these expectations and protocols, but through meetings and less formal communications, the required changes to our practices have been implemented. Proposed Completion Date: December 31, 2025 - Completed

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Finding 1207043 (2024-024)

Material Weakness 2024

State of Illinois

IL

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.303

Finding Number: 2024-024 Finding Name: Failure to Maintain Documentation to Evidence Timely Reporting of Subaward Information Required by Federally Funded Accountability and Transparency Act (FFATA) Finding Condition(s): The Illinois Department of Public Health (IDPH) did not maintain documentation ...

Finding Number: 2024-024 Finding Name: Failure to Maintain Documentation to Evidence Timely Reporting of Subaward Information Required by Federally Funded Accountability and Transparency Act (FFATA) Finding Condition(s): The Illinois Department of Public Health (IDPH) did not maintain documentation to evidence information required to be reported by the Federal Funding Accountability and Transparency Act (FFATA) was submitted within required timeframes for awards granted to subrecipients of the Immunization Cooperative Agreements (ICA) and Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) programs. Name of Contact Person(s): • Jacob Cisco, Chief Financial Officer/Bureau Chief, Finance – Illinois Department of Public Health, Office of Administrative Affairs • Sheila Jefferson, Chief Accountability Officer – Illinois Department of Public Health, Office of Performance Management • Timothy Stevens, Grant Management Auditor – Illinois Department of Public Health, Office of Performance Management Corrective Action(s): The IDPH revised its policy on the FFATA report submission to capture the change from a FSRS.gov batch upload to a manual entry in SAM.gov. Additionally, the IDPH documented its process to provide evidence of the original submission dates in SAM.gov. Proposed Completion Date: March 23, 2026

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Finding 1207038 (2024-023)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles § 200.303 § 200.403 § 200.430

Finding Number: 2024-023 Finding Name: Failure to Provide Supporting Documentation for Payroll and Related Costs Finding Condition(s): The Illinois Department of Child and Family Services (DCFS) could not provide adequate supporting documentation to substantiate payroll and related costs claimed for...

Finding Number: 2024-023 Finding Name: Failure to Provide Supporting Documentation for Payroll and Related Costs Finding Condition(s): The Illinois Department of Child and Family Services (DCFS) could not provide adequate supporting documentation to substantiate payroll and related costs claimed for federal reimbursement under the Foster Care – Title IV-E (Foster Care), Adoption Assistance, and Temporary Assistance for Needy Families (TANF) programs. Additionally, the auditors noted the controls to ensure required documentation is obtained to support payroll and related costs and maintained to evidence management approval of payroll information were not operating effectively. Finally, the auditors noted adequate internal controls have not been established to ensure the data included in the timekeeping system and used to allocate personal services expenditures to Foster Care, Adoption Assistance, TANF, and other programs operated by DCFS is consistent with the hours reported on manual timesheets prepared by the employees and approved by supervisor. Name of Contact Person(s): David Riley, Director – Illinois Department of Child and Family Services, Budget and Finance Division Corrective Action(s): The new quality controls introduced have helped to identify and correct errors, but system modernization is needed to fully implement. The DCFS is working with the Illinois Department of Innovation and Technology to implement the systems to shift to electronic timesheets. Proposed Completion Date: October 31, 2026

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Finding 1207034 (2024-022)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles § 200.303 § 200.403

Finding Number: 2024-022 Finding Name: Inadequate Process for Foster Care Daycare Maintenance Assistance Payments Finding Condition(s): The Illinois Department of Child and Family Services (DCFS) does not have an adequate process in place to ensure Foster Care daycare maintenance assistance payments...

Finding Number: 2024-022 Finding Name: Inadequate Process for Foster Care Daycare Maintenance Assistance Payments Finding Condition(s): The Illinois Department of Child 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 Child and Family Services, Office of Contract Administration Corrective Action(s): In July 2025, the daycare eligibility program discontinued the use of certification rate forms. As a result, 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 – Completed

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Finding 1207028 (2024-020)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles Special Tests & Provisions § 200.303

Finding Number: 2024-020 Finding Name: Inadequate Procedures to Determine Provider Eligibility Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and the Medicaid Cluster program...

Finding Number: 2024-020 Finding Name: Inadequate Procedures to Determine Provider Eligibility Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not adequately screen providers of the Children’s Health Insurance Program (CHIP) and the Medicaid Cluster programs to ensure that Medicaid providers were not on the USDHHS Office of the Inspector General’s (OIG) List of Excluded Individuals/Entities (LEIE) at the time the vouchers for the related services performed were paid. Name of Contact Person(s): Susie Brown, Interim Bureau Chief - Illinois Department of Healthcare and Family Services, Provider Enrollment Services Corrective Action(s): The Illinois Medicaid Program Advanced Cloud Technology (IMPACT) system is used by the DHFS for the enrollment and screening of CHIP and Medicaid providers. On a monthly basis, IMPACT automatically checks providers enrolled within IMPACT to the LEIE to verify the provider is not on the LEIE. The IMPACT system is updated through quarterly system releases. As part of the 1.6 quarterly release, the DHFS’ Provider Enrollment Services (PES) updated the system to address the monthly screening check box defect causing the issue. In the Lexis Nexis monthly job, as part of license information, the DHFS receives files from the American Board of Medical Specialties (ABMS), the Clinical Laboratory Improvement Amendments (CLIA), the Drug Enforcement Administration (DEA), and the NCPDP (National Council for Prescription Drug Programs (NCPDP) and other states (out-of-state license/medical license files). Only the corresponding license check boxes are checked for the provider. As an example, for a provider with an ABMS license, the corresponding ABMS check box would be checked. Furthermore, as part of sanction information, the DHFS receives a discipline file, which has the information from the Excluded Parties List System (EPLS), the LEIE, the Medicaid Services Administration (MSA), and other federal and state databases to ensure all databases are checked for active providers in a monthly batch. Any sanctions identified from the sources during the monthly batch screenings will be marked based on the corresponding data source where the sanction was found. If a sanction is found, the system generates an email to the OIG that the provider has been identified as having a potential sanction through the Medicaid Management Information System (MMIS) automated validation process. The email contains the provider name, the National Provider Identifier (NPI), the IMPACT provider identifier, the provider’s address, and the sanction type. The email instructs the OIG to verify the sanction and proceed with the appropriate administrative action. The OIG will provide the necessary administrative action to provider enrollment staff to handle appropriately. Proposed Completion Date: June 30, 2024 - Completed

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Finding 1207021 (2024-019)

Material Weakness 2024

State of Illinois

IL

Special Tests & Provisions Reporting Matching / Level of Effort / Earmarking § 200.303

Finding Number: 2024-019 Finding Name: Failure to Ensure Managed Care Organizations Properly Prepare Financial Reports Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not ensure the annual financial audits prepared during the year ended June 30, 2024, for M...

Finding Number: 2024-019 Finding Name: Failure to Ensure Managed Care Organizations Properly Prepare Financial Reports Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) did not ensure the annual financial audits prepared during the year ended June 30, 2024, for Managed Care Organizations (MCOs) of the Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs met the requirements of the MCO contracts and federal regulations. Specifically, the auditors noted that the MCO annual financial reports were prepared on a statutory basis of accounting which is assumed to be materially different than Generally Accepted Accounting Principles (GAAP). Additionally, the auditors noted that the DHFS has not established internal control procedures to ensure the financial reports are prepared in accordance with GAAP. Name of Contact Person(s): • Helena Lefkow, Deputy Administrator - Illinois Department of Healthcare and Family Services, Division of Medical Programs, Bureau of Managed Care • Keshonna Lones, Bureau Chief, Quality and Compliance Operations Manager - Illinois Department of Healthcare and Family Services, Division of Medical Programs, Bureau of Managed Care • Jessica Pickens, Account Manager Supervisor - Illinois Department of Healthcare and Family Services, Division of Medical Programs, Bureau of Managed Care Corrective Action(s): Starting in calendar year 2025, the Bureau of Managed Care began receiving MCO GAAP reports that were determined to comply with the reporting requirements of 42 CFR 438.3(m) and the Managed Care Program Contracts. The MCOs that do not comply with the reporting requirements of the contracts, or 42 CFR 439.3(m), are subject to sanctions as outlined in the contracts, which include one or more of the following: initiating corrective action plans, monetary penalties, and suspension of enrollment. Note: As during its 2025 reviews, the DHFS noted that one MCO was deemed to be non-complaint for lack of a 2025 GAAP report submission. In addition to issuing sanctions to the MCO for reporting non-compliance, the DHFS’ Account Management team engaged in discussions with the MCO to determine the cause of the untimely report submission, next steps, and to identify a final report submission date. Per discussions with the MCO, the DHFS learned that the MCO’s board members required education on the distinction between statutory financial and GAAP financial reports. In addition, the MCO’s board is required to review and approve all financial reports prior to submitting them to the DHFS. That approval process was delayed, which resulted in the report not being available to submit to the DHFS timely. The DHFS has established a revised report due date that allows for the MCO’s Board to complete its review and approval process. As such, the MCO shall submit its final, approved 2025 GAAP report to the DHFS no later than Feb 20, 2026. Proposed Completion Date: December 9, 2024

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Finding 1207014 (2024-018)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303 § 200.400

Finding Number: 2024-018 Finding Name: Improper Calculation of Qualified Incentive Payments Claimed under the Medicaid Cluster Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) incorrectly calculated qualified incentive payments charged to the Medicaid Cluster pr...

Finding Number: 2024-018 Finding Name: Improper Calculation of Qualified Incentive Payments Claimed under the Medicaid Cluster Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) incorrectly calculated qualified incentive payments charged to the Medicaid Cluster program using the enhanced federal medical assistance percentage (FMAP) rate applicable to payments under the Affordable Care Act (ACA) rather than its regular FMAP rate. Additionally, the auditors noted the supervisory review procedures related to the calculation of the qualified incentive payments were not designed to and did not operate at a level of precision to identify an error of this nature. Name of Contact Person(s): Rene Corso, Senior Public Service Administrator - Illinois Department of Healthcare and Family Services, Long Term Care (LTC) Rate Setting Unit Corrective Action(s): The LTC Rate Setting Unit has updated the spreadsheet for calculating the Quality Incentive Payment (QIP) to ensure the percentages for the ACA and the FMAP are distinguishable. Peer checking has also been implemented to ensure amounts are correct before processing Proposed Completion Date: April 16, 2025

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Finding 1207009 (2024-017)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles Eligibility Matching / Level of Effort / Earmarking § 200.303

Finding Number: 2024-017 Finding Name: Inadequate Procedures to Determine and Document Beneficiary Eligibility Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) does not have adequate procedures to determine and document eligibility for beneficiaries of the Child...

Finding Number: 2024-017 Finding Name: Inadequate Procedures to Determine and Document Beneficiary Eligibility Finding Condition(s): The Illinois Department of Healthcare and Family Services (DHFS) does not have adequate procedures to determine and document eligibility for beneficiaries of the Children’s Health Insurance Program (CHIP) and the Medicaid Cluster programs. Additionally, the auditors noted that the DHFS does not have adequate resources to perform and document eligibility determinations. Finally, the auditors noted that the DHFS has not established appropriate monitoring procedures to ensure eligibility determinations are properly documented in accordance with program requirements. Name of Contact Person(s): • Jacqueline Myers, Interim Deputy Administrator - Illinois Department of Healthcare and Family Services, Eligibility Data and Systems • Pam Winsel, Bureau Chief, Waiver Operations Management - Illinois Department of Healthcare and Family Services, Division of Medical Programs • Jeremy Thomas, Impact Technical Lead - Illinois Department of Healthcare and Family Services, Bureau of Technical Support Corrective Action(s): A report will be created to identify those enrolled in the waiver program, but not receiving full Medicaid that makes them ineligible for payment. This report will be run monthly and worked on manually until a system edit is implemented to reject claims when there is no match on full Medicaid coverage coding. Program staff at the waiver operating agencies will also be trained to assist them in identifying certain criteria that would exclude a waiver program enrollee from being eligible for payment. Rules have been modified (PIR #53483) to make sure eligibility in the RDB (Medicaid Management Information System (MMIS)) gets closed. In addition, a monthly report has been developed and is run monthly to identify any case with the eligibility closed in the IES, yet open in the Recipient Database (RDB). Cases shown on this report are worked to ensure both the Integrated Eligibility System (IES) and the RDB (MMIS) match. Proposed Completion Date: September 1, 2026

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Finding 1207002 (2024-016)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles Eligibility Matching / Level of Effort / Earmarking § 200.303

Finding Number: 2024-016 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 indivi...

Finding Number: 2024-016 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): • Katherine A. Yager, Administrator, Illinois Department of Healthcare and Family Servies, Division of Eligibility • George Jacaway, Deputy Administrator - Illinois Department of Healthcare and Family Services, Eligibility Operations • Jacqueline Myers, Interim Deputy Administrator - Illinois Department of Healthcare and Family Services, Eligibility Data and Systems Corrective Action(s): Currently, the DHFS identifies and redetermines eligibility for this population each month. Each month, DHFS systemically identifies this population and provides a report to both DHFS and DHS to redetermine eligibility. Previously, this population was not being systematically identified. The amount of medical payments have decreased by 85% from fiscal year 2024 to 2025. A review of FY26 data indicates a continual decrease, currently at 93%. The DHFS will continue to identity and redetermine eligibility for this population group on a monthly basis. Proposed Completion Date: April 30, 2025 - Completed

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Finding 1207000 (2024-015)

Material Weakness 2024

State of Illinois

IL

Reporting § 200.303

Finding Number: 2024-015 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 f...

Finding Number: 2024-015 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 adequate internal controls had not been established to ensure the data used to calculate drug rebates reported on the quarterly CMS-64 reports are complete and accurate. Specifically, the supervisory reviews and analytical procedures performed over the quarterly CMS-64 reports were not designed at an appropriate level of precision to detect the drug rebates errors. Name of Contact Person(s): • Jason Rosado Timmerhaus, Bureau Chief – Illinois Department of Human Services, Budget and Cash Management • Tyler White, Drug Rebate Manager – Illinois Department of Human Services, Budget and Cash Management Corrective Action(s): Issue: Medicare Part D claims were not being excluded from the Drug Rebate invoicing process. Root Cause: The system programming did not capture the necessary data points to identify and exclude Part D claims during rebate processing. Corrective Actions Taken: 1. System Programming Fix a. The DHFS’ Pharmacy Benefit Manager updated the rebate system coding to correctly identify and exclude Part D claims. b. Documentation was provided by the DHFS’ Pharmacy Benefit Manager detailing the parameters used for testing and confirming that Part D claims are now excluded from the rebate process. 2. Manufacturer Credit Process a. The HFS Drug Rebate team, in collaboration with the DHFS’ Pharmacy Benefit Manager, identified all drugs that were mistakenly invoiced as Part D claims. b. Prior Quarter Adjustments (PQA) are applied during each invoice cycle to credit manufacturers for any incorrect charges. c. The DHFS’ Pharmacy Benefit Manager provides documentation verifying claims eligible for PQA. d. The Drug Rebate team conducts sampling tests to ensure credits are accurately applied. 3. Ongoing Monitoring a. Continue quarterly review and sampling of claims to confirm Part D exclusions remain effective. b. Maintain documentation from the DHFS’ Pharmacy Benefit Manager for audit and compliance purposes. These actions began on January 9, 2025, and will continue until all PQAs are made. Proposed Completion Date: August 31, 2024 – Completed

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Finding 1206995 (2024-014)

Material Weakness 2024

State of Illinois

IL

Reporting § 200.303 § 200.502 § 200.510

Finding Number: 2024-014 Finding Name: Inaccurate Reporting of Federal Expenditures Finding Condition(s): The Illinois Department of Human Services (IDHS) did not accurately report federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) C...

Finding Number: 2024-014 Finding Name: Inaccurate Reporting of Federal Expenditures Finding Condition(s): The Illinois Department of Human Services (IDHS) did not accurately report federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, the Food Distribution Cluster (FDC), the Supplemental Nutrition for Women, Infants, and Children (WIC) programs, the Vocational Rehabilitation (VR) program, the Temporary Assistance for Needy Families (TANF), the Child Care Development Funds (CCDF) Cluster, the Social Services Block Grants (SSBG), the Block Grants for Prevention and Treatment of Substance Abuse (SAPT) program, and the Disability Insurance/SSI (SSDI) Cluster. Specifically, the auditors noted differences between the expenditure amounts provided for audit by the IDHS and the Schedule of Expenditures of Federal Awards (SEFA) amounts reported to the IOC, differences relative to amounts provided to program subrecipients, the cash basis expenditures provided by the IDHS for audit procedures included accrued (not paid) expenditures, and amounts passed through to other State agencies from the IDHS provided by the IDHS for audit procedures included expenditures paid outside of the fiscal year. Finally, IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Name of Contact Person(s): Sarah Eves, Deputy Chief Financial Officer – Illinois Department of Human Services Corrective Action(s): The IDHS will hire additional staff to ensure accurate review, reconciliation, and presentation of its federal grant expenditure data. Additionally, the IDHS has written draft procedures that will include (1) the identification and exclusion of accruals from total expenditures, ensuring cash-basis reporting, (2) how to identify and include/exclude current and prior year vouchers in transit, and (3) the review and validation of federal expenditures (and subrecipient expenditures). Proposed Completion Date: June 1, 2026

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Finding 1206977 (2024-013)

Material Weakness 2024

State of Illinois

IL

Procurement, Suspension & Debarment Subrecipient Monitoring Reporting § 200.303

Finding Number: 2024-013 Finding Name: Failure to Report Subaward Information Required by FFATA Finding Condition(s): The Illinois Department of Human Services (IDHS) failed to report information required by the Federal Funding Accountability and Transparency Act (FFATA) for awards granted to subrec...

Finding Number: 2024-013 Finding Name: Failure to Report Subaward Information Required by FFATA Finding Condition(s): The Illinois Department of Human Services (IDHS) failed to report information required by the Federal Funding Accountability and Transparency Act (FFATA) for awards granted to subrecipients of the Temporary Assistance for Needy Families (TANF), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) programs. Name of Contact Person(s): • Kyle Thomas, Bureau Chief of Planning and Evaluation – Illinois Department of Human Services, Division of Family and Community Services • Christina Miller, Fund Disbursement Manager, Illinois Department of Human Services, Behavioral Health and Recovery - SAPT Program Corrective Action(s): The IDHS will (1) revise its FFATA reporting procedures to address the timely reporting of contracts with new federal awards, (2) revise its contract procedures to require that the contract signature date be recorded in its financial management system (FMS) on the same day the contract is signed., (3) revise its contract procedures to include the verification of contract signature dates in its FMS, (4) develop a checklist for its contract staff, (5) hire a manager in its IDHS-SAPT Program to develop revised procedures and complete FFATA reporting, and (6) identify interim controls and milestones in its IDHS-SAPT Program that will operate prior to full automation. Proposed Completion Date: April 1, 2026

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Finding 1206969 (2024-012)

Material Weakness 2024

State of Illinois

IL

Matching / Level of Effort / Earmarking Reporting § 200.303

Finding Number: 2024-012 Finding Name: Failure to Meet the SAPT MOE Requirement Finding Condition(s): The Illinois Department of Human Services (IDHS) did not maintain the required aggregate State expenditures for the maintenance of effort (MOE) requirements for the Block Grants for Prevention and T...

Finding Number: 2024-012 Finding Name: Failure to Meet the SAPT MOE Requirement Finding Condition(s): The Illinois Department of Human Services (IDHS) did not maintain the required aggregate State expenditures for the maintenance of effort (MOE) requirements for the Block Grants for Prevention and Treatment of Substance Abuse (SAPT) program. In addition, the auditors noted that the IDHS has not established internal control procedures to monitor whether maintenance of effort requirements are met. Name of Contact Person(s): • Christina Miller, Fund Disbursement Manager, Illinois Department of Human Services, Behavioral Health and Recovery - SAPT Program • Brock Dunlap, Chief Financial Officer – Illinois Department of Human Services, Division of Behavioral Health and Recovery Corrective Action(s): The IDHS will (1) establish a procedure to run quarterly expenditure reports on the fund sources identified in the approved MOE methodology and compare them to expected expenditures, (2) train fiscal staff on the importance of running quarterly MOE reports so that the IDHS will not have repeat audit findings, and (3) will have grant managers communicate with providers who are funded by MOE-identified fund sources that are underutilized to understand possible reasons for underutilization and provide technical assistance as needed. Proposed Completion Date: July 30, 2026

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Finding 1206967 (2024-011)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles § 200.303 § 200.403

Finding Number: 2024-011 Finding Name: Unallowable Costs Charged to the TANF and CCDF Cluster Programs Finding Condition(s): The Illinois Department of Human Services (IDHS) could not provide documentation to support payments made on behalf of beneficiaries of the Temporary Assistance for Needy Fami...

Finding Number: 2024-011 Finding Name: Unallowable Costs Charged to the TANF and CCDF Cluster Programs Finding Condition(s): The Illinois Department of Human Services (IDHS) could not provide documentation to support payments made on behalf of beneficiaries of the Temporary Assistance for Needy Families (TANF) and Child Care and Development Fund (CCDF) Cluster programs. Additionally, the auditors noted that the IDHS does not have adequate controls in place to ensure information provided by providers is accurate and the related child care payments made were appropriate. 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 will (1) develop and implement internal procedures to conduct quarterly reviews of billing certificates for payments entered through the Interactive Voice Response (IVR) system, (2) assess existing deliverables, its Child Care Assistance Program (CCAP) policy and its CCDF State Plan responses related to IVR payments and determine and implement any necessary revisions, (3) develop external guidance for providers and Child Care Resource & Referral (CCR&R) agencies outlining IVR payment requirements, documentation standards, record-retention expectations, and the review process, (4) initiate and continue implementation of a communication plan to announce upcoming reviews, including the Service Employees International Union (SEIU), the Division of Early Childhood (DEC), CCR&Rs, and all providers utilizing IVR (additional communications will be issued as the process is refined), (5) commence IVR payment reviews in June 2026 and continue on a quarterly basis, and (6) Establish and maintain a master tracking log of provider reviews by year, subject to management review and oversight. Proposed Completion Date: June 30, 2026

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Finding 1206962 (2024-010)

Material Weakness 2024

State of Illinois

IL

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Eligibility § 200.303 § 200.403

Finding Number: 2024-010 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 J...

Finding Number: 2024-010 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. Finally, 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): Kasey Reagan, Interim Director – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): The IDHS has submitted a repair ticket to repair the system it uses to calculate its diverted income. Additionally, the cases affected by the diverted income error are being reviewed and referend to the Bureau of Collections for overpayment, as needed. The cases with incorrect beneficiary payments, outside of the diverted income errors, have been corrected and overpayment/supplements have been completed. Finally, the IDHS will require its TANF managers to conduct a monthly review of TANF cases to include all components of the cases. Proposed Completion Date: June 30, 2026

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Finding 1206960 (2024-009)

Material Weakness 2024

State of Illinois

IL

Eligibility Matching / Level of Effort / Earmarking Special Tests & Provisions § 200.303

Finding Number: 2024-009 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...

Finding Number: 2024-009 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. Also, the auditors noted that the IDHS does not have adequate resources to perform and document eligibility determinations. Additionally, the auditors noted that the IDHS has not established appropriate monitoring procedures to ensure eligibility determinations are properly documented in accordance with program requirements. Name of Contact Person(s): Kasey Reagan, Interim Director – Illinois Department of Human Services, Division of Family and Community Services (FCS) Corrective Action(s): The IDHS’ TANF Managers will conduct a monthly review of TANF cases to include all components of the TANF cases. Additionally, an Integrated Eligibility System (IES) enhancement will be implemented to allow telephonic signatures for TANF Responsibility and Service Plans. This will eliminate the need to use a paper process. Proposed Completion Date: March 21, 2027

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Finding 1206948 (2024-008)

Material Weakness 2024

State of Illinois

IL

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

Finding Number: 2024-008 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...

Finding Number: 2024-008 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): Kasey Reagan, Interim Director – Illinois Department of Human Services, Division of Family and Community Services Corrective Action(s): The IDHS updated its funding requirements to include Social Services Block Grant (SSBG) reporting requirements. The updates included the shift from annual to quarterly reporting for the post-expenditure report and that every office or bureau awarded SSBG funding are required to include SSBG reporting requirements (i.e., quarterly reporting on expenditures and clients served) in their contract exhibits. These actions were implemented starting in fiscal year 2026. Offices and bureaus have met the expectations for the first 2 quarters of implementation, as the team is anticipating Q3 reporting on April 30, 2026. The first post-expenditure annual report under this structure will be completed later this year. Finally, the IDHS updated its procedures to have its supervisory reviews and approvals of the post-expenditure report completed within 90 days of the fiscal year end. The due date for the collection of all data needed for the post-expenditure is July 30th. The post-expenditure report is not due until December 30th. Supervisory approvals completed within 90 days allow the team to check for and request any missing data well before the deadline. These updated reporting requirements and procedures are critical in supporting the post-expenditure report with accurate information on dollars spent, clients served, and service type delivered. Proposed Completion Date: September 30, 2026

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Finding 1206947 (2024-007)

Material Weakness 2024

State of Illinois

IL

Subrecipient Monitoring Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking § 200.303 § 200.332

Finding Number: 2024-007 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 Assistan...

Finding Number: 2024-007 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 auditors noted that 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): • Kasey Reagan, Interim Director – Illinois Department of Human Services, Division of Family and Community Services (FCS) • Christina Miller, Fund Disbursement Manager – Illinois Department of Human Services, Division of Behavioral Health and Recovery (IDHS-SAPT-Program) • Maureen Bilek, Audit Compliance and Programmatic Monitoring Administrator – Illinois Department of Human Services, Division of Early Childhood (DEC) • Brian Bond, Director – Illinois Department of Human Services, Office of Contract Administration (OCA) Corrective Action(s): The IDHS has completed or will take the following actions within four of its divisions/offices: Division of Family and Community Services (FCS) The FCS (1) has worked to identify the late subrecipient monitoring reviews and created a plan to address the backlog, (2) will utilize the plan to eliminate the back log of subrecipient monitoring reviews, (3) will meet with staff to reinforce the importance of adhering to the agreed upon monitoring processes and timeframes, (4) will update and circulate to staff the revised monitoring standard operating procedure, and (5) will review staff adherence to monitoring SOP timeframes during weekly meetings with staff who conduct monitoring. Division of Behavioral Health and Recovery (IDHS-SAPT PROGRAM) The IDHS-SAPT PROGRAM will (1) hire an administrative assistant to assist with compliance monitoring tracking activities to maintain communication about important deadlines, (2) hire compliance monitors to engage in conducting compliance reviews, (3) meet weekly to track monitoring activities to ensure deadlines are met, (4) review policy and procedures to assess timelines associated with the monitoring process, and (5) train all monitors to use the updated tool, templates and updated policies and procedures and the new electronic system. Division of Early Childhood (DEC) The DEC will (1) 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, (2) establish and implement internal Corrective Action Plan (CAP) procedures that outline standardized processes for CAP tracking, documentation, and escalation efforts and define protocols when subrecipients fail to submit required CAPs within established timeframes, (3) 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, and (4) 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. Office of Contract Administration (OCA) The OCA (1) has formally briefed leadership and management the issues noted in the finding and initiated a cross-division review of current subrecipient monitoring execution to identify gaps, inconsistencies, and needed revisions, (2) will complete a structured validation of monitoring expectations to ensure programmatic on-site reviews and expenditure/performance report reviews are occurring at the required frequency and depth, consistent with pass-through monitoring responsibilities, (3) will review minimum documentation standards and supervisory quality control checkpoints for review workpapers, expenditure/performance report review evidence, and monitoring report issuance, to strengthen internal controls over compliance, (4) will standardize and revise the data tracking definitions to ensure program findings from subrecipient monitoring are issued, tracked, and followed through to corrective action completion, including defined escalation steps when responses are delinquent or incomplete, (5) will align enforcement actions with the Statewide Grantee Compliance Enforcement System (GCES) framework (e.g., stop-payment status triggers, notices, objection windows, and resolution and closure steps), and ensure staff understand how and when to apply GCES in response to unresolved monitoring deficiencies, (6) finalize recommendations to streamline Fiscal Administrative Review (FAR) production triggers (pre-draft and post-draft), clarify program engagement in special condition processing post-FAR, and reduce reliance on informal technical assistance in CAP in favor of documented compliance correction and closure, (7) revised procedures and controls will be implemented for FARs scheduled on/after August 1, 2026 (target), with interim guidance applied as feasible to active cases prior to that date, and (8) will conduct structured database integrity review and update process aligned with official guidance and source documentation to ensure accuracy, completeness, consistency, and reliability of all FAR database records. Proposed Completion Date: December 31, 2026

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Corrective Action Plans

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