Corrective Action Plans

DPNR will: • Conduct a review of payroll transactions to identify any additional discrepancies between timesheets and payroll registers. • Implement a requirement for supervisory review and certification of employee timesheets prior to payroll processing. • Establish a reconciliation process requiring payroll staff to compare approved timesheets to payroll registers before final payroll approval. Grant Charge Authorization • Review personnel funding assignments to verify that salary charges are consistent with approved Notices of Personnel Action (NOPAs), grant budgets, and personnel authorizations. • Correct the employee's funding allocation to reflect the authorized grant funding source. • Establish a secondary review process to verify funding sources before payroll is posted to grant accounts. Payroll Adjustments • Review outstanding payroll adjustments and correction entries. • Process the identified correction and updated procedures to ensure adjustments are completed promptly upon discovery. • Establish tracking procedures to monitor payroll corrections through completion.

DHS adopted the electronic Timeforce (STATS) system for payroll, replacing manual processes. Time and attendance are approved through management levels, with payroll based on Notice of Personnel Action (NOPA) cost centers. Financial Analysts reconcile payroll, and a workflow ensures accurate NOPA listings for payroll purposes. Additionally, in order to ensure that Notices of Personnel Actions are updated on a timely basis, ensuring that salaries are charged to the respective account, DHS has implemented the following process: Provisional Payroll Codes are requested prior to the close of the Fiscal Year by the Department of Finance through the Office of Management and Budget through the established process. Once the codes are received, the Division of Human Resources will update the most current Personnel Distribution Sheets to reflect active employees. The sheets will be submitted to Fiscal for certification by the CFO.NOPA’s are updated with the provisional codes. Lastly, once payroll is processed by the Department of Finance (DOF), a Flex Earnings Report is generated by the Analyst on each payday. A reconciliation is then performed to ensure that all employees, along with their respective fringe benefits, are accurately captured and drawn. Following this process, DOF posts the payroll to the accounting system. The Federal Grants Financial Analyst, once onboarded, will also play a key role in ensuring that transactions are recorded in the appropriate accounting period and that costs are properly allocated. DHS has added an additional layer of monitoring with the onboarding of a Director of Federal Grants. The newly created unit of Audit and Compliance, once staffed will play a crucial role with periodic monitoring.

UCM is implementing Insperity, a new Human Resource and Payroll software system, to improve the accuracy and documentation of time allocation, payroll processing, and benefit allocation across programs and funding sources, including the Family Achievement Program federal award. UCM will configure Insperity and related procedures to support time allocation by program, grant, or cost objective, supervisor approval, payroll allocation reporting, and retention of supporting documentation. In addition, UCM will develop and implement written policies and procedures addressing time and effort reporting, employee benefit allocations, payroll allocation methodology, review and approval requirements, and documentation retention standards. These procedures will require that employee benefits charged to the federal award are based on actual benefit costs incurred, rather than budgeted or estimated amounts, unless otherwise permitted by the award terms and adjusted to actual costs within the required reporting period. UCM will establish a review process to ensure payroll and benefit costs charged to the federal award are accurate, allowable, based on actual costs incurred, properly supported, and consistent with Uniform Guidance requirements. Staff responsible for grant accounting, payroll processing, and federal award compliance will receive Uniform Guidance training. Responsible for Corrective Action: Shruti Jha, Senior Director of Finance Deborah Ewell, Director of Human Resources Laura D’Ambrogi, Grants Manager Anticipated Completion Date: September 30, 2026

Recommendations: Management should implement procedures to ensure that all payroll-related costs, including bonuses and stipends, are properly classified within the accounting system. Management should also establish review controls over coding of expenditures to ensure consistency with Uniform Guidance and grant reporting requirements. Views of responsible officials and planned corrective actions: Management agrees with the finding and indicates that it will strengthen review procedures over expense classification and ensure that compensation costs are properly recorded within payroll-related accounts going forward. Anticipated Completion Date: September 30, 2026

Recommendations: Management should establish formal procedures requiring documented authorization for all disbursements and ensure that such approvals are retained in an organized and accessible manner. Additionally, the Organization should implement procedures requiring formal documentation of employee compensation arrangements, including established pay rates, and ensure that this documentation is consistently maintained and readily available for audit and compliance purposes. Views of responsible officials and planned corrective actions: Management agrees with the finding and indicates that it will implement formal approval procedures requiring documented authorization for all disbursements and will retain such documentation within its accounting records. Management also plans to implement standardized employment agreements and compensation authorization documentation for all employees and strengthen document retention practices to ensure compliance with federal requirements. Anticipated Completion Date: September 30, 2026

FINDING 2024-002 Criteria: Recipients of federal awards must follow the costs principles set out at 2 CFR section 200.430 to substantiate compensation and other purchases charged to a federal program. “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: …(iii) reasonable reflect the total activity for which the employee is compensated by the non-Federal entity” 2 CFR section 200.430(i). The Organization’s processes did not maintain sufficient documentation of the approval of the activity of each employee or the purchase of goods/services. Audit Recommendation: We recommend the Organization ensure it 1) maintains records of each employee’s activity and 2) monitors compliance with the job-costing system implemented. Auditee Response: Organization believes that prior leadership and lack of supervision allowed paychecks to be approved without the proper flow. FY24 Turnover was roughly 75% in leadership and 60% across the organization. Corrective Action Plan: UICSL moved away to Paycom early 2024 to better help account for Labor Allocation and Grant Codes. With Paycom, employees are automated to each program and there is a designated reporting function allowing us to review what is assigned. UICSL going into 2025 has better defined leadership and Directors for each division so there are clearly defined approvers and supervisors for each purchase and transaction – leadership turnover was high. Person Responsible: Som Chivukula, Finance Director; Matt Poss, Executive Director; Eva Leyer, Human Resources Manager Timeline: UICSL filled all leadership positions by mid-2025 and went through two organizational restructures, creating more mid-level management. This will help ensure compliance with FY25 Audit.

Schedule of Corrective Action Plan For the Year Ended June 30, 2024 Finding 2024-002: Material Weakness in internal controls over Activities Allowed or Unallowed and Allowable Cost/Cost Principle (Payroll) Responsible Official’s Response and Corrective Action Plan We concur with the finding related to deficiencies in our time tracking process. We have implemented a time tracking system using QuickBooks Time starting in the fourth quarter of fiscal year 2025. This system is designed to accurately capture and record employees’ hours worked by project/grant. Comprehensive training sessions have been conducted for all affected employees to ensure they are proficient in using the new time tracking system. Supervisors have received additional training on monitoring and verifying time entries. Planned Implementation Date of Corrective Action Plan September 1, 2024 Person Responsible for Corrective Action Plan Caryn York, President & CEO

Response: MSP plans to implement changes overall to timekeeping processes to ensure that payroll costs accurately reflect the work performed and to reconcile and true up any budget estimates on a consistent basis.

Finding 2023-005 ● Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. ● Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. ● Corrective Action Plan: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action. Financial policies and procedures will be created and implemented. Annual schedule of expenditures will be created by Executive Director or Bookkeeper and reviewed by Board of Directors. Contact Person: Kirsten Jurcek Anticipated Date of Completion: September 1, 2026

Corrective Action Planned: Management acknowledges the finding related to the lack of formal documentation maintained evidencing a hindsight review of employee working hours to verify alignment between actual hours. The Effort Reporting requirement is now met with a revamped process that includes an updated institutional effort reporting policy and development of a newly developed effort reporting workflow that aligned with the relatively recent (April 2024) implementation of new ERP system Oracle. This new process applies to those team members who have effort either charged, in-kind or cost-shared, to a grant funded project. The new Effort Reporting workflow formally went live institution wide on 10/1/25, with a pilot implementation done in September 2025. Effort reporting is conducted monthly and requires a preview of all team members with effort allocated to grants from an automated report. Each report is reviewed for accuracy and then each line item is entered into a Smartsheet format for automated delivery of an individual effort report to each team member. A mid-month report is automated to flag and identify upcoming end dates of grant funding in preparation of the next month effort report. This midmonth review is necessary to adjust for any edits needed in preparation for the next month effort report workflow. In addition, the new process allows for follow up with escalation if individual effort report(s) are not signed by respective team member(s) within the prescribed monthly due date. Name(s) of Contact Person(s) Responsible for Corrective Action: Kimberly Davey, Director Office for Sponsored Programs Anticipated Completion Date: Completion 9/30/2025, active as of 10/01/2025

Management has reviewed the finding, noting the inherent complexity of time allocation in our operational environment. Because our personnel routinely serve multiple clients simultaneously across various federal grants, tracking exact hours per case presents a significant administrative challenge. Furthermore, the delayed receipt of the FY23 audit-delivered post-FY24-precluded the implementation of procedural adjustments during the audited timeframe. To address our operational realities and ensure strict, ongoing adherence to 2 CFR § 200.430, the agency immediately instituted systemic enhancements for FY25. The Organization has transitioned all time tracking to a streamlined, system-driven process within our UKG platform: • Integrated UKG Time Tracking and Approvals: All employees are now required to punch in and out directly through the UKG system, efficiently assigning their actual hours worked to specific program and grant codes to generate functional, after-the-fact timesheets. To further streamline this documentation, the Organization is gradually transitioning our existing supervisory reviews into UKG’s electronic sign-off workflow, which will centralize our approval records and ensure accurate distribution across federal awards.

U.S. Department of Health and Human Services - Community Service Block Grant Significant Deficiency in Internal Control over Compliance - Other Matters Recommendation: We recommend the Neighborhood Service Center, Inc. reevaluate its current process, implement proper controls and perform additional training over time and effort reporting. The Neighborhood Service Center, Inc. should not report salaries and wages unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: The Neighborhood Service, Inc. will require employees whose salaries are allocated to several funding areas to do periodic (at least 2 times per year) time studies to provide documentation to support how salaries are being allocated in the payroll system to grants and other funding areas. These documents will be signed on June 15 and December 15 of each year. Name of the contact persons responsible for corrective action: E. Yvette Robinson, Deputy Director Planned completion date for corrective action plan: For immediate implementation and ongoing.

The Department should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Department of Health should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Response: The Department concurs with the finding and the need for a proper method of time recording for accurate time and effort reporting. Prior to the conclusion of the audit, the agency created an internal review group to assess the need for an efficient time keeping system to be utilized throughout the agency to allow for uniformity and accuracy. Corrective Action: The Department will continue to move forward with the implementation of the new time keeping system which allows for proper time and leave collection for documentation and allocation of employee time. In the system, the employee time will be recorded and approved by supervisory personnel for accuracy prior to submission payroll processing. The system will allow documentation to be assessed when needed. Name of contact person responsible for the corrective action: Lucreta Tribune Anticipated date for completion of corrective action: July 1, 2026

The Department should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Department of Health should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Response: The Department concurs with the finding and the need for a proper method of time recording for accurate time and effort reporting. Prior to the conclusion of the audit, the agency created an internal review group to assess the need for an efficient time keeping system to be utilized throughout the agency to allow for uniformity and accuracy. Corrective Action: The Department will continue to move forward with the implementation of the new acquired time keeping system which allows for proper time and leave collection for documentation and allocation of employee time. In the system, the employee time will be recorded and approved by supervisory personnel for accuracy prior to submission payroll processing. The system will allow documentation to be assessed when needed. Name of contact person for the corrective action: Lucreta Tribune Anticipated date for completion of corrective action: July 1, 2026.

The Department should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Department of Health should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Response: The Department concurs with the finding and the need for an effective method of time recording for accurate time and effort reporting. Prior to the conclusion of the audit, the agency created an internal review group to assess the need for an efficient time keeping system to be utilized throughout the agency to allow for uniformity and accuracy. Corrective Action: The Department will continue to move forward with the implementation of the new time keeping system which allows for proper time and leave collection for documentation and allocation of employee time. In the system, the employee time will be recorded and approved by supervisory personnel for accuracy prior to submission payroll processing. The system will allow documentation to be assessed when needed. Name of contact person responsible for the corrective action: Lucreta Tribune

See the University response section at the end of this report for the corrective action plan for finding 2024-118.

Assistance listing numbers and program names 97.024 Emergency Management Performance Grants Agency: Department of Emergency and Military Affairs (DEMA) Name of contact person and title: Keith Tagaban, Audit Supervisor Anticipated completion date: September 18, 2026 Agency’s Response: Concur The Department of Emergency and Military Affairs will maintain required documentation to support payroll costs charged to the federal program and ensure compliance with award requirements. Internal Audit will review FY2024 payroll charges for allowability and adequate support in coordination with the State Finance Office, the Emergency Management Grants Administration Office, and State Human Resources Office. Unallowable costs, if identified, will be resolved through reimbursement adjustments or repayment, as appropriate. Payroll documentation policies will be updated, and training will be provided to ensure required records are retained for the prescribed retention period.

Finding Reference: 2024-007 Finding Title: Timecard Approval Controls – Payroll Charge to Federal Grant, Significant Deficiency CAP Contact Persons: • John Morris, Chief Financial Officer, Financial Affairs, (312) 322-6420 • Scott Dolude, Director of Payroll, Financial Affairs, (312) 322-6526 Planned Corrective Actions: 1. Timecard Approval Requirements for Federal Grants: Management will reinforce payroll control procedures to require that all employee timecards charged to Federal grants are reviewed and approved by designated supervisors in a timely manner and in accordance with established payroll deadlines. Specifically, that all required approvals must be completed prior to payroll processing and fiscal period close to ensure the allowability, accuracy, and proper allocation of costs charged to Federal awards. By June 30, 2026, management will send an email to all impact supervisory and management personnel responsible for time review and approval processes. 2. Documentation Standards and Audit Trail: Management will establish formal documentation standards to ensure that evidence of supervisory review and approval, including approval dates, is consistently retained in a secure, centralized system. These standards will support a clear and retrievable audit trail demonstrating compliance with the payroll documentation and allowability requirements of 2 CFR §200.430(i). 3. Monitoring and Compliance Oversight: Management will implement periodic monitoring procedures to assess compliance with timecard review and approval requirements. These procedures will include exception reporting, timely follow-up on identified deficiencies, and management review of monitoring results. Corrective actions will be implemented, as necessary, to address recurring or systemic issues related to untimely, incomplete, or undocumented approvals. Based on the results of monitoring processes, Director of Payroll and Timekeeping will conduct organizational, departmental, or team-based follow-up to address non-compliance or other issues. Anticipated Completion Date: 06/30/2026

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

1. Implement and maintain a formal time and effort process for payroll charged to Federal and other restricted awards. 2. Require approved time records or other compliant personnel activity documentation that accurately reflects work performed and is incorporated into payroll allocations. 3. Train program and finance staff on requirements for payroll allocation support under 2 CFR 200.430. 4. Retain supporting records in the grant file and review payroll allocation support as part of monthly close and grant reporting.

Finding reference: 2024-008 - 93.224, 93.527 – Health Center Program Cluster Significant Deficiency and Noncompliance over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Recommendation: The department should maintain support and rationale for all allocations of payroll costs for employees charged to federal awards. Additionally, employees should earmark their timesheets with the number of hours worked on each program. Action taken: The City has moved to personnel activity reports (PARS) for timesheet reporting to ensure the allocation of the number of hours performed on each program is accurate. The only exception is an employee that works 100% on one grant. Total working hours are recorded to the grant for this individual.

Finding reference: 2024-003 - 14.218 – CDBG - Entitlement Grants Cluster Significant Deficiency and Noncompliance over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Recommendation: The department should maintain support and rationale for all allocations of payroll costs for employees charged to federal awards. Additionally, employees should earmark their timesheets with the number of hours worked on each program. Action taken: The City has moved to personnel activity reports (PARS) for timesheet reporting to ensure the allocation of the number of hours performed on each program is accurate. The only exception is when an employee works 100% on one grant. Then all working hours are recorded to the grant.

Audit Finding Reference: 2024-006 Improve Documentation and Controls over Allowable Costs Planned Corrective Action: The Town will implement and enforce procedures to ensure all employees whose salaries or wages are charged to federal grants maintain and retain appropriate time and effort documentation, including timesheets for hourly staff and semi-annual certifications for salaried staff, in compliance with Uniform Guidance. Management has made staff aware of the Time and Effort reporting requirements associated with Federal grants and will work with grant managers and finance department staff to ensure this requirement is implemented during Fiscal 2026; on or about March 18th.

Management acknowledges the importance of ensuring that payroll costs charged to the program are consistent between the payroll system and the employee’s timesheet. The City continues to monitor its internal control process to ensure thorough review procedures are being followed. Timesheets are reviewed, bi-weekly, by payroll and adjusted to reflect actual hours as they relate to a specific activity. The City was able to hire a permanent accountant hiring who will provide additional oversight of these processes ensuring that hours worked are both reported correctly on the timesheets and are following the funding allocations that are approved by the grant.

Management acknowledges the importance of ensuring that payroll costs charged to the program are consistent between the payroll system and the employee’s timesheet. The City continues to monitor its internal control process to ensure thorough review procedures are being followed. Timesheets are reviewed, bi-weekly, by payroll and adjusted to reflect actual hours as they relate to a specific activity. The City was able to hire a permanent accountant hiring who will provide additional oversight of these processes ensuring that hours worked are both reported correctly on the timesheets and are following the funding allocations that are approved by the grant.