State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Governor’s Office of Management and Budget (GOMB) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Justice (DOJ), U.S. Department of Labor (DOL), U.S. Department of Transportation (DOT), U.S. Department of the Treasury (TREAS), U.S. Department of Education (ED), U.S. Department of Health and Human Services (USDHHS) Program Name: Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program, WIOA Cluster, Highway Planning and Construction, Emergency Rental Assistance Program, Homeowner Assistance Fund Program, Coronavirus State and Local Fiscal Recovery Funds, Title I Grants to Local Educational Agencies, Twenty-First Century Community Learning Centers, Supporting Effective Instruction State Grants, Education Stabilization Fund (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families (TANF), Child Support Enforcement, Low-Income Home Energy Assistance Program, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures 10.557 ($168,740,425), 10.558 ($156,353,139), 16.575 ($78,196,419), 17.258/17.259/17.278 ($141,177,677), 20.205 ($1,932,300,419), 21.023 ($179,355,381), 21.026 ($177,107,928), 21.027 ($2,804,581,453), 84.010A ($704,235,726), 84.287 ($77,436,583),84.367A ($76,537,613), 84.425 ($2,227,152,891), 93.323 ($174,636,052), 93.558 ($578,867,422), 93.563 ($131,300,355), 93.568 ($288,503,657), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Finding 2023-002: Inadequate Monitoring of Subrecipient Single Audit Reviews Compliance Requirement: Subrecipient Monitoring Condition Found: The State of Illinois did not establish adequate controls to monitor the completion and documentation of the review single audit reports for its subrecipients of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Child and Adult Care Food Program (CACFP), Crime Victims Assistance Program (CVA), WIOA Cluster (WIOA), Highway and Planning Construction (Highway), Emergency Rental Assistance Program (ERAP), Homeowner Assistance Fund Program (HAF), Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Twenty-First Century Community Learning Centers (Twenty-First), Title I Grants to Local Education Agencies (Title I), Supporting Effective Instruction State Grants (SEISG), Education Stabilization Funds (ESF), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Temporary Assistance for Needy Families Cluster (TANF), Child Support Enforcement (CSE), Low-Income Home Energy Assistance Program (LIHEAP), Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant (SSBG), and Block Grants for Prevention and Treatment of Substance Abuse (SAPT) in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS). The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of GATA on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. The State utilizes a contractor to perform the centralized functions of obtaining the single audit report, verifying the report meets the requirements, and assigning findings to the applicable State agency. During our testing of subrecipient single audit desk review files for our 2023 major programs, we noted instances where single audit desk reviews were still in process and had not been finalized within GATA ARRMS as of the date of our testing (October 7, 2024). One subrecipient in our sample for the WIC program had incomplete single audit reviews for fiscal years 2019 through 2022, despite the fact the State had obtained the single audit report from the Federal Audit Clearinghouse for each of these fiscal years. Upon further review of data contained within GATA ARRMS, we identified 669 single audit reviews were identified as incomplete in GATA ARRMS for grantees who: (1) reported expenditures under fiscal year 2023 major programs, (2) had an audit report with a FAC acceptance date between January 2, 2022 and January 3, 2023 (requiring the report to be reviewed during fiscal year 2023) and (3) were not sanctioned (placed on the Illinois Stop Payment List) by the State for noncompliance with reporting requirements. These 669 reviews were in varying stages of completion with the majority (608 audits) pending documentation supporting the issuance of a final completion letter by the cognizant agency. The remaining 61 audits (9.1%) were pending receipt of documentation, pending a review, or had another error requiring follow-up. These 669 audits included 323 audits (48.3%) with one or more findings potentially requiring a management decision to be issued. We noted the cognizant agencies for the 669 incomplete single audit reviews in GATA ARRMS were as follows: "See Table in the Audit Report". The 669 incomplete single audit reviews in GATA ARRMS pertained to subrecipients of the following major programs: "See Table in the Audit Report". While in many instances there was evidence the State agencies had completed the necessary procedures outside of GATA ARRMS, the purpose of GATA ARRMS is to reduce the duplication of effort across State agencies and to provide a single submission point for the State’s subrecipients. The lack of monitoring controls around this centralized process may result in noncompliance with subrecipient single audit desk review requirements. The State’s subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures to monitor whether single audit reports are reviewed, management decision letters are issued, and single audit desk review files are closed out in GATA ARRMS in a timely manner. Cause: In discussing these conditions with GOMB officials, management stated that the incompleteness of the State’s audit reviews in GATA ARRMS was due to oversight. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in GATA ARRMS in a timely manner may result in noncompliance with the State’s obligation as a pass-through entity to appropriately monitor its subrecipients. Repeat Finding: A similar finding was not reported in the prior year audit (Finding Code 2023-002). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend GOMB establish procedures to monitor the completion and documentation of single audit report reviews in GATA ARRMS to ensure the State complies with its obligation as a pass-through entity. Views of GOMB Officials: GOMB agrees with the finding.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of the Treasury (TREAS) Program Name: COVID-19 – Homeowner Assistance Fund Program ALN and Program Expenditures: 21.026 ($177,107,928) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-004: Failure to Establish Subrecipient Monitoring Procedures Condition Found: IDHS did not perform a risk assessment or subrecipient monitoring procedures for the subrecipient of the COVID-19 – Homeowner Assistance Fund (HAF) program for the year ended June 30, 2023. The State designated IDHS as the State agency responsible for monitoring of the HAF program’s subrecipient, the Illinois Housing Development Authority (IHDA), a discretely presented component unit of the State. As a pass-through entity, IDHS was responsible for: • Identifying the award and applicable requirements, • Evaluating IHDA’s risk of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, • Monitoring the activities of IHDA as necessary to ensure the subaward is used for authorized purposes, IHDA complies with the terms and conditions of the subaward, and IHDA achieves performance goals, and • Issuing a management decision for audit findings pertaining to the federal award provided to IHDA, if applicable. During our testing, we noted IDHS did not perform any subrecipient monitoring procedures over IHDA with respect to the HAF program during the year ended June 30, 2023. Amounts passed through to IHDA for the HAF program totaled $177,107,928 for the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing and performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: In discussing these conditions with IDHS officials, management stated that IDHS lacked dedicated resources needed when the HAF program was assigned to IDHS to collaborate with the Illinois Housing Development Authority. Possible Asserted Effect: Failure to perform required risk assessments and to adequately monitor subrecipients may result in the subrecipient not properly administering the federal programs in accordance with laws, regulations, and the grant agreements. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-004. (Finding Code 2023-004, 2022-004) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS implement subrecipient monitoring procedures in accordance with federal regulations. Views of IDHS Officials: The Department accepts the recommendation. The Department agrees with the finding and recognizes the importance of programmatic reporting. The Department has procedures in place to complete programmatic and financial monitoring for the HAF program.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-010: Failure to Follow Established Program Subrecipient Monitoring Procedures Condition Found: IDHS did not follow its established program monitoring policies and procedures for 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. IDHS has implemented procedures whereby program staff perform periodic program on-site and desk reviews of IDHS subrecipient compliance with regulations applicable to the federal programs administered by IDHS. Generally, these reviews are formally documented and include the issuance of a report of the review results to the subrecipient summarizing the procedures performed, results of the procedures, and any findings or observations for improvement noted. IDHS’s policies require the subrecipient to respond to each finding by providing a written corrective action plan. Additionally, IDHS program staff perform reviews of expenditure reports submitted by subrecipients. IDHS subrecipient monitoring procedures are subject to the review and approval of a supervisor. During our test work over program on-site review procedures performed for 95 subrecipients of the TANF, CCDF, SSBG, and SAPT programs, we noted IDHS did not follow its established program monitoring procedures as follows: We tested the program on-site review procedures performed by IDHS during the year ended June 30, 2023 for a sample of subrecipients of the TANF, CCDF, SSBG, and SAPT programs comprised of the following: "See Table in the Audit Report". We noted the following exceptions in our testing of program on-site reviews performed during the year ended June 30, 2023: • IDHS did not perform on-site monitoring reviews of subrecipients in fiscal year 2023 in accordance with IDHS’ planned monitoring schedule and/or could not provide support for the review. Specifically, we noted the following exceptions: "See Table in the Audit Report". • IDHS did not provide timely notification (within 60 days) of the results of the programmatic on-site reviews. We noted the following exceptions: "See Table in the Audit Report". • IDHS did not complete their quality review on a timely basis (within 60 days). We noted the following exceptions: "See Table in the Audit Report". • IDHS did not receive a corrective action plan from the subrecipient after findings were identified during the review. We noted the following exceptions: "See Table in the Audit Report". • For the SSBG program, IDHS personnel were unable to provide support for managment review of the program review tool for 16 of 41 subrecipients sampled."See Table in the Audit Report". The SAPT program also requires subrecipients to submit periodic reports to allow IDHS to monitor certain programmatic performance metrics. These reports are reviewed quarterly by IDHS program personnel. Any subrecipients who meet less than 80% of the performance metrics reported are also required to submit a corrective action plan to IDHS. During our testing, we noted IDHS was unable to provide documentation evidencing monitoring of the quarterly program reports as follows: "See Table in the Audit Report". Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include ensuring on-site program procedures and expenditure reviews are performed in a timely manner and adequate documentation is maintained. Cause: In discussing these conditions with IDHS officials, management stated that the program monitoring deficiencies noted are due to misplaced or misfiled documentation, untimely monitoring, inadequate staffing, and lack of consistent application in each program division. Possible Asserted Effect: Failure to adequately perform and document program on-site monitoring reviews of subrecipients and notify subrecipients of findings in a timely manner may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Failure to properly review subrecipient expenditures may result in inaccurate payments or unallowable costs. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2022-008. (Finding Code 2023-010, 2022-008, 2021-017, 2020-015, 2019-013, 2018-012, 2017-013, 2016-012, 2015-011, 2014-008, 2013-009, 12-07, 11-09) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS ensure programmatic on-site and expenditure report reviews are performed and documented for subrecipients in accordance with established policies and procedures. In addition, we recommend IDHS review its process for reporting and following up on program findings relative to subrecipient on-site reviews to ensure timely corrective action and quality control is taken. Views of IDHS Officials: The Department accepts the recommendation. The Department will review and update programmatic monitoring guidance and ensure changes are communicated, as appropriate. Additionally, the Department will work to hire additional staff to improve the tracking and performance of compliance reviews.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS), Program Name: Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse ALN and Program Expenditures: 10.557 ($168,740,425), 93.558 ($578,867,422), 93.575/93.596 ($783,907,069), 93.667 ($57,147,970), 93.959 ($101,011,200) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-015: Inadequate Review of Subrecipient Single Audit Reports Condition Found: IDHS did not adequately review single audit reports received from its subrecipients for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), 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 on a timely basis. The State of Illinois established the Grant Accountability Transparency Unit (GATU) to implement the provisions of the State's Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State and working with program personnel to issue management decisions on findings. Subrecipients who are required to report their single audits to GATU must submit their audit report within 9 months of their fiscal year end. Subrecipients who fail to provide the required reporting package within that timeframe will be suspended unless a deadline waiver or extension is granted. IDHS staff are responsible for reviewing the reports assigned to them by GATU and determining whether: (1) federal funds reported in the schedule of expenditures of federal awards (SEFA) reconcile to IDHS records and (2) issuing management decisions on findings reported within required time frames. During our testing of a sample of single audit desk review files for 83 subrecipients of the WIC, TANF, CCDF, SSBG, and SAPT programs we noted the single audit desk reviews are still in process and have not been finalized within the GATA Audit Report Review Management System (ARRMS) as of the date of our test work for two subrecipients of the WIC and SSBG programs. Additionally, we noted one subrecipient of the WIC and SSBG programs, one subrecipient of the SSBG and SAPT programs, and five subrecipients of the SAPT program with June 30, 2022 fiscal year-ends that did not submit their reporting package to ARRMS within 9 months of their fiscal year end in accordance with GATU policies. GATU’s files did not contain evidence that waivers were granted, or sanctions were imposed on these subrecipients. Further, we noted IDHS has not established controls over subrecipient single audit report reviews at an adequate level of precision to ensure single audit reports are received and reviewed timely. IDHS’ subrecipient expenditures under the federal programs for the year ended June 30, 2023 were as follows: "See Table and Audit Reports". Criteria or Requirement: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure the federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on audit findings within six months of acceptance of the audit report by the FAC and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include implementing procedures and hiring adequate resources to ensure single audit reports are reviewed in a timely manner and management decision letters are issued with required timeframes. Cause: In discussing these conditions with IDHS officials, management stated that since the COVID-19 pandemic, IDHS has attempted to maintain communications with non-compliant grantees that have had ongoing issues with accounting staff shortages and scheduling of their required audits. These issues have led to grantees not meeting required timelines for the submissions of their annually-required audits. Additionally, in some instances, IDHS has had issues identifying grantees in the statewide audit review portal, resulting in delays of processing audit reviews and due dates. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreements. Additionally, failure to issue management decisions within six months of acceptance of the single audit report by the FAC results in noncompliance with federal regulations. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-015). Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to ensure: (1) subrecipient single audit reports are obtained and reviewed within established deadlines, (2) management decisions are issued for all findings affecting its federal programs in accordance with the Uniform Guidance, and (3) follow up procedures are performed to ensure subrecipients have taken timely and appropriate corrective action. Views of IDHS Officials: The Department accepts the recommendation. The Department will review existing policies and procedures and make revisions where possible to strengthen controls over the timeliness of receipt and review of subrecipient single audit reports, issuance of management decisions, and follow up procedures performed to ensure subrecipients have taken timely and appropriate corrective action for findings.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of the Treasury (Treasury) Program Names: COVID-19 – Emergency Rental Assistance (ERA), COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) ALN and Program Expenditures: 21.023 ($179,355,381), 21.027 ($2,804,581,453) Award Numbers: Various - see table of award numbers Federal Award Year: Various - see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-018: Inadequate Monitoring of Subrecipients of the CSLFRF and ERA Programs Condition Found: IDHS did not obtain and review periodic performance reports for subrecipients of the Emergency Rental Assistance (ERA) and COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) programs during the year ended June 30, 2023. Each state agency is responsible for monitoring of their subrecipients of ERA and CSLFRF funding. As a pass-through entity, IDHS was responsible for: • Identifying the awards and applicable requirements, • Evaluating each subrecipient’s risks of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, • Monitoring the activities of each subrecipient as necessary to ensure the subaward is used for authorized purposes, the subrecipients comply with the terms and conditions of the subawards, and the subrecipients achieve performance goals, and • Issuing a management decision for audit findings pertaining to the federal award provided to each subrecipient, if applicable. For the ERA and CSLFRF programs, IDHS requires subrecipients to provide periodic performance reports (PPR) which contain performance measures and accomplishments allowing IDHS to monitor program results. During our testing of 1 grantee for ERA and 40 grantees for CSLFRF, IDHS could not provide evidence periodic performance reports were obtained or reviewed by IDHS for any of the subrecipients tested. Amounts passed through by DHS to subrecipients totaled $15,325,849 for ERA and $127,605,292 for CSLFRF for the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: In discussing these conditions with IDHS officials, management stated the Department was unable to produce all requested PPRs due to staff turnover and the lack of a central repository for PPRs. Possible Asserted Effect: Failure to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-018) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS perform subrecipient monitoring procedures in accordance with federal regulations. Views of IDHS Officials: The Department accepts the recommendation. The Department recognizes the importance of performance monitoring and is taking steps to better preserve and organize performance monitoring reports for future requests.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of the Treasury (Treasury) Program Names: COVID-19 – Emergency Rental Assistance (ERA), COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) ALN and Program Expenditures: 21.023 ($179,355,381), 21.027 ($2,804,581,453) Award Numbers: Various - see table of award numbers Federal Award Year: Various - see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-018: Inadequate Monitoring of Subrecipients of the CSLFRF and ERA Programs Condition Found: IDHS did not obtain and review periodic performance reports for subrecipients of the Emergency Rental Assistance (ERA) and COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) programs during the year ended June 30, 2023. Each state agency is responsible for monitoring of their subrecipients of ERA and CSLFRF funding. As a pass-through entity, IDHS was responsible for: • Identifying the awards and applicable requirements, • Evaluating each subrecipient’s risks of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, • Monitoring the activities of each subrecipient as necessary to ensure the subaward is used for authorized purposes, the subrecipients comply with the terms and conditions of the subawards, and the subrecipients achieve performance goals, and • Issuing a management decision for audit findings pertaining to the federal award provided to each subrecipient, if applicable. For the ERA and CSLFRF programs, IDHS requires subrecipients to provide periodic performance reports (PPR) which contain performance measures and accomplishments allowing IDHS to monitor program results. During our testing of 1 grantee for ERA and 40 grantees for CSLFRF, IDHS could not provide evidence periodic performance reports were obtained or reviewed by IDHS for any of the subrecipients tested. Amounts passed through by DHS to subrecipients totaled $15,325,849 for ERA and $127,605,292 for CSLFRF for the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: In discussing these conditions with IDHS officials, management stated the Department was unable to produce all requested PPRs due to staff turnover and the lack of a central repository for PPRs. Possible Asserted Effect: Failure to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-018) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS perform subrecipient monitoring procedures in accordance with federal regulations. Views of IDHS Officials: The Department accepts the recommendation. The Department recognizes the importance of performance monitoring and is taking steps to better preserve and organize performance monitoring reports for future requests.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of the Treasury (Treasury) Program Names: COVID-19 – Emergency Rental Assistance (ERA), COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) ALN and Program Expenditures: 21.023 ($179,355,381), 21.027 ($2,804,581,453) Award Numbers: Various - see table of award numbers Federal Award Year: Various - see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-018: Inadequate Monitoring of Subrecipients of the CSLFRF and ERA Programs Condition Found: IDHS did not obtain and review periodic performance reports for subrecipients of the Emergency Rental Assistance (ERA) and COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) programs during the year ended June 30, 2023. Each state agency is responsible for monitoring of their subrecipients of ERA and CSLFRF funding. As a pass-through entity, IDHS was responsible for: • Identifying the awards and applicable requirements, • Evaluating each subrecipient’s risks of noncompliance for purposes of determining the appropriate monitoring procedures related to the subaward, • Monitoring the activities of each subrecipient as necessary to ensure the subaward is used for authorized purposes, the subrecipients comply with the terms and conditions of the subawards, and the subrecipients achieve performance goals, and • Issuing a management decision for audit findings pertaining to the federal award provided to each subrecipient, if applicable. For the ERA and CSLFRF programs, IDHS requires subrecipients to provide periodic performance reports (PPR) which contain performance measures and accomplishments allowing IDHS to monitor program results. During our testing of 1 grantee for ERA and 40 grantees for CSLFRF, IDHS could not provide evidence periodic performance reports were obtained or reviewed by IDHS for any of the subrecipients tested. Amounts passed through by DHS to subrecipients totaled $15,325,849 for ERA and $127,605,292 for CSLFRF for the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: In discussing these conditions with IDHS officials, management stated the Department was unable to produce all requested PPRs due to staff turnover and the lack of a central repository for PPRs. Possible Asserted Effect: Failure to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-018) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS perform subrecipient monitoring procedures in accordance with federal regulations. Views of IDHS Officials: The Department accepts the recommendation. The Department recognizes the importance of performance monitoring and is taking steps to better preserve and organize performance monitoring reports for future requests.
State Agency: Illinois Department of Commerce and Economic Opportunity (DCEO) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Low Income Home Energy Assistance Program (LIHEAP) ALN and Program Expenditures: 93.568 ($288,503,657) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-030: Failure to Communicate Award Information to Subrecipients Condition Found: DCEO did not follow its established policies and procedures for monitoring subrecipients of the Low-Income Home Energy Assistance Program (LIHEAP). During our testwork of the award communications for our sample of subrecipients, we selected the contracts under which funds were disbursed during fiscal year 2023 to review for compliance with federal award communication requirements. During our review of the award communication files for a sample of 35 awards, we noted the Federal Award Identification Number (FAIN) was not communicated in the subrecipient award agreement for two of the subrecipients (with payments totaling $1,192,330). Upon further review by the agency, an additional 36 awards (with payments totaling $2,727,317) did not communicate the FAIN in the subrecipient award agreement. Amounts passed through to subrecipients under the LIHEAP program totaled $282,019,216 during the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(a), a pass-through entity is required to identify Federal awards made to the subrecipient by informing each subrecipient of the federal award identification number. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include controls to ensure required information is properly communicated. Cause: In discussing these conditions with DCEO officials, they stated that the FAIN for award 2102ILLIEA was incorrectly labeled as 2101ILLIEA on the issued Grant Agreements for the 36 subrecipients under the 21-224 LIHEAP Grant Series due to an entry error during set up in the DCEO eGrants system for this grant series. The fourth digit of the standard naming convention for HHS award shifted with this award from 1 to 2, as the 2020 award was 2001ILLIEA. To initiate grants, the award number is entered into a single field in the eGrants system and automatically generated on any grant agreement created in this series. While this was missed with the establishment of the 21-224 award series, it was corrected with the 21-221 series. Possible Asserted Effect: Failure to communicate required award information may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-030) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend DCEO implement additional procedures to ensure award information communicated to subrecipients is reviewed for completeness and accuracy. Views of DCEO Officials: DCEO agrees with the finding and recommendation.
State Agency: Illinois Criminal Justice Information Authority (ICJIA) Federal Agency: U.S. Department of Justice (USDOJ) Program Name: Crime Victim Assistance ALN and Program Expenditures: 16.575 ($78,196,419) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-033: Failure to Adequately Monitor Subrecipients Condition Found: ICJIA did not follow its established program monitoring policies and procedures for subrecipients of the Crime Victim Assistance (CVA) program for fiscal year 2023. ICJIA selects subrecipients of the CVA program to perform programmatic monitoring procedures using a risk-based approach. Among other things, ICJIA has identified subrecipients receiving CVA funding under shorter term programs (12 months or less in duration) as higher risk and requires an on-site review to be performed once during the period of performance. Additionally, longer term programs (12 to 36 months in duration) require an on-site review in the first twelve months of the period of performance and a second on-site review during the remaining period of performance. In scheduling the timing of its on-site reviews, ICJIA considers whether there are any additional subrecipient specific risk factors that warrant an earlier review time. Based upon ICJIA’s monitoring criteria, we noted ICJIA should have conducted site visits with 9 subrecipients (with expenditures of $1,542,221) from shorter term programs and 35 subrecipients (with expenditures of $41,777,962) from longer term programs during the year ended June 30, 2023. During our review of the subrecipient site visits conducted during State fiscal year 2023, we noted none of the 9 subrecipients from shorter term programs were subjected to site visits and 19 of the 35 subrecipients from longer term programs (with expenditures of $9,561,899 during the year ended June 30, 2023) were not subjected to site visits. ICJIA passed through approximately $75,301,704 to subrecipients of the CVA program during the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. ICJIA’s Site Visits policy requires Grant Specialists to conduct two site visits within thirty-six months of the start of a grant with the first site visit taking place within the first twelve months, unless the grantee’s Program Risk Assessment requires that a site visit be completed within a shorter time period. One-time, twelve-month (or less) grants will also have a site visit conducted during their period of performance. In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site program monitoring procedures are performed in a timely manner. Cause: In discussing these conditions with ICJIA officials, they stated due to staffing shortages within the federal and state grants unit, all of the required visits were not completed. Possible Asserted Effect: Failure to adequately perform on-site monitoring reviews of subrecipients may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-033) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend ICJIA ensure programmatic on-site reviews are performed and documented for subrecipients in accordance with established policies and procedures. Views of ICJIA Officials: We agree with the recommendation.
State Agency: Illinois Criminal Justice Information Authority (ICJIA) Federal Agency: U.S. Department of Justice (USDOJ) Program Name: Crime Victim Assistance ALN and Program Expenditures: 16.575 ($78,196,419) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-034: Inadequate Review of Subrecipient Single Audit Reports Condition Found: ICJIA did not adequately review single audit reports received from its subrecipients for the Crime Victim Assistance Program (CVA) program on a timely basis. The State of Illinois established the Grant Accountability and Transparency Unit (GATU) to implement the provisions of the State’s Grant Accountability and Transparency Act (GATA) on a centralized basis. GATU has established standardized reporting requirements for subrecipients of the various Federal and State programs administered by the State through its various departments. Subrecipients of the State are required to certify whether they expended more than $750,000 in federal awards during the fiscal year and submit their single audit reporting packages to the Federal Audit Clearinghouse (if required). GATU is then responsible for obtaining the single audit reporting package, verifying the report meets the single audit requirements, and assigning, to the applicable state agency, any findings attributable to amounts passed through to the subrecipient(s) by the State. As a State agency, ICJIA is responsible for reviewing the reports assigned to them by GATU and determining whether Federal funds reported in the consolidated year-end financial report (CYEFR) reconcile to ICJIA records. Additionally, as the cognizant State agency, ICJIA is responsible for issuing management decisions on findings reported and applying sanctions to subrecipients who do not comply with reporting requirements (i.e. stop pay process). During our testing of a sample of single audit desk review files for 16 subrecipients (with expenditures of $52,565,919 in the fiscal year), we noted the following: • For one subrecipient (with expenditures of $471,739), ICJIA did not issue a Management Decision Letter (MDL) in a timely manner. The delay in issuing this management decision letter was 67 days beyond the required timeframe. • For six subrecipients (with expenditures of $28,012,353), ICJIA did not review the single audit reports and did not issue a MDL as required. • For 10 subrecipients (with expenditures of $27,690,600), ICJIA did not reconcile the CYEFR to ICJIA’s records as required. • For two subrecipients (with expenditures of $1,155,919), ICJIA did not receive the single audit reporting package within required timeframes or follow up with the subrecipient. Additionally, ICJIA did not invoke the stop pay process. ICJIA has not established controls over subrecipient single audit reviews at an adequate level of precision to ensure single audit reporting requirements, including obtaining and reviewing single audit reporting packages, issuing management decision letters, reconciling CYEFRs to agency records, and invoking stop payment actions are performed within required timeframes. ICJIA passed through approximately $75,301,704 to subrecipients of the CVA program during the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statues, regulations and the terms and conditions of the subaward, and that the subaward performance goals are achieved. Additionally, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate corrective action on all audit findings. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to established and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure Single Audit reports are reviewed in a timely manner and management decisions are issued within required timeframes. Cause: In discussing these conditions with ICJIA officials, they stated this GATA responsibility has not been performed as consistently as other responsibilities due to competing priorities and staff shortages. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-034) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend ICJIA establish procedures to ensure subrecipient single audit report reviews are completed and documented in a timely manner. Additionally, ICJIA should implement procedures to ensure timely reconciliation of funds, issuance of management decisions letters, and initiation of the stop pay process. Views of ICJIA Officials: ICJIA agrees with the recommendation. ICJIA does not have staff dedicated to this function. We are actively in the hiring process for a person who will be dedicated to this work. We believe once this person is hired, the Authority will be able to meet the GATA requirements.
State Agency: Illinois Criminal Justice Information Authority (ICJIA) Federal Agency: U.S. Department of Justice (USDOJ) Program Name: Crime Victim Assistance ALN and Program Expenditures: 16.575 ($78,196,419) Award Numbers: Various – see schedule of award numbers Federal Award Year: Various – see schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-035: Inadequate Fiscal Monitoring of Subrecipients Condition Found: ICJIA did not follow its established policies and procedures for monitoring subrecipients of the Crime Victim Assistance (CVA) program. ICJIA selects subrecipients of the CVA program to perform fiscal monitoring procedures using a risk-based approach. Specifically, a risk assessment is performed annually over the subrecipient which includes calculating a risk score based upon criteria established by ICJIA. ICJIA’s risk assessment criteria include the total award amount, the subgrantee’s experience with ICJIA grant awards, results of financial monitoring, the percent of grant expended to date, the quality of financial submissions, the timeliness of financial submissions, and the payment type. Based upon the risk score, each subrecipient is designated as needing high, moderate, or low oversight. The oversight category assigned determines the frequency and type of financial monitoring (i.e. desk review or fiscal audit). During our audit procedures, we noted 21 sub-grantees who received CVA program funds were designated for high oversight for which the monitoring policy generally requires a fiscal audit. Of the 21 high oversight designated subrecipients, only two subrecipients had a fiscal audit performed over their CVA program grants. Agency personnel indicated additional risk assessment criteria were considered to reduce the number of high oversight subrecipients; however, these additional criteria are not documented in the fiscal monitoring policy or risk score documentation. ICJIA passed through approximately $75,301,704 to subrecipients of the CVA program during the year ended June 30, 2023. Criteria or Requirement: According to 2 CFR 200.332(b), a pass-through entity must evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. According to 2 CFR 200.332(d), a pass-through entity is required to monitor the activities of subrecipients as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. 2 CFR 200.332(d)(3) requires pass-through entities to issue management decisions for applicable audit findings pertaining to the federal awards provided to the subrecipient and 2 CFR 200.332(d)(4) requires pass through entities to resolve audit findings through corrective action plans (CAP). In addition, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing and performing monitoring procedures in accordance with Uniform Guidance and program requirements. Cause: In discussing these conditions with ICJIA Officials, they stated ICJIA utilizes both a formal, documented policy to determine a risk score for over 600 active grantees and a more subjective, unwritten assessment to determine which higher and medium risk grantees actually will be scheduled to receive one of our active fiscal monitoring procedures. The subjective analysis is used by ICJIA to adjust the potential volume of monitoring effort to the anticipated number of resources available in a given period. Possible Asserted Effect: Failure to fully document required risk assessments and to adequately monitor subrecipients may result in the subrecipient not properly administering the federal program in accordance with laws, regulations, and the grant agreement. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding code 2023-035) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend ICJIA review their fiscal subrecipient monitoring procedures and implement additional procedures as necessary to ensure proper monitoring procedures are performed and documentation of monitoring activities are adequately maintained. Views of ICJIA Officials: ICJIA agrees with the findings as we have additional risk assessment criteria that are established but not documented.
State Agency: Illinois State Board of Education (ISBE) Federal Agency: U.S. Department of Education Program Name: Twenty-First Century Community Learning Centers (21st Century) ALN and Program Expenditures: 84.287 ($77,436,583) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Finding 2023-045: Inadequate Monitoring of 21st Century Subrecipients Condition Found: ISBE did not adequately monitor and document program monitoring procedures performed over subrecipients of the Twenty-First Century Community Learning Centers (21st Century) program. The 21st Century program operates to provide State educational agencies and local educational agencies with funding specific to rural and inner-city public schools. To monitor the 21st Century program activities performed by Illinois elementary and secondary schools, ISBE has established Tier I, Tier II, and Tier III monitoring activities which are applied to each subrecipient depending upon the annual risk score determined by ISBE. ISBE’s 21st Century program subrecipient monitoring manual outlines the risk assessment procedures to determine the tier of monitoring required, the methods used for tier determination, and documentation required for each tier of monitoring. Tier I subrecipient monitoring procedures apply to all subrecipients, with no consideration of the risk assessment score they have received, and consist of a twice-a-year call in which ISBE personnel discuss enrollment and registration statistics, progression towards goals specific to the district, and budgetary changes. A notification email is sent twice a year, alerting the subrecipient that a call is required to be scheduled. Once the call is scheduled, a call form detailing the responses to the discussion points is completed by ISBE personnel during the call to document the call was conducted and any matters for follow up. Tier II applies to the subrecipients who receive a moderate risk assessment score. These procedures consist of a desk review over program compliance, goal attainability specific to the subrecipient, and quality programming. Similar to Tier I, a notification email is initially sent, alerting the subrecipient that a desktop review is going to occur. During the review, a standardized checklist is completed, outlining the documentation provided by the subrecipient to address each portion of review. ISBE documents the completion of its desk review procedures with a letter to the subrecipient communicating any noncompliance and requesting corrective action, if applicable. Any required corrective action plans are reviewed and formally accepted by ISBE in a letter to the subrecipient. Tier III applies to subrecipients who receive a high risk assessment score and consists of an on-site review including interviews with the project director and site coordinators, and observations of the academics and academic enrichment taking place at each site. ISBE personnel complete monitoring checklists to document the completion of its on-site procedures and a summary checklist is completed after the on-site visit to summarize all areas of noncompliance. A letter is sent to the subrecipient communicating the completion of the on-site review and any noncompliance identified, and requesting corrective action, if applicable. Any required corrective action plans are reviewed and formally accepted by ISBE in a letter to the subrecipient. During the year ended June 30, 2023, ISBE passed through 21st Century program funding (totaling $75,983,860) to 139 subrecipients. During our testing of 21st Century program monitoring, we noted ISBE did not follow its subrecipient monitoring procedures during the year ended June 30, 2023. In several instances, documentation supporting monitoring procedures or conclusions was not retained or prepared. In other instances, monitoring documentation was missing required checklists, reports, corrective action plans, or evidence of supervisory review procedures. The following is a summary of the exceptions identified in our testing: "See Table in the Audit Report". We also noted that ISBE’s controls for monitoring are not designed at an appropriate level of precision to ensure monitoring of subrecipients is completed as required. Criteria or Requirement: According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subaward, and that the subaward performance goals are achieved. According to 2 CFR section 200.332(b), a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing supervisory procedures at an appropriate level of precision to ensure adequate monitoring is performed and documentation is maintained. Cause: In discussing these conditions with ISBE officials, they stated the inability to provide required documentation is attributable to staff turnover as those responsible for these monitoring activities have since left ISBE. Possible Asserted Effect: Failure to perform required monitoring procedures and maintain documentation may result in subrecipients not properly administering the Federal programs in accordance with laws, regulations, and grant agreements. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2023-045) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend ISBE establish policies and procedures to ensure programmatic monitoring is performed and appropriately documented. Views of ISBE Officials: Management agrees with the finding and has begun to develop processes and structures to correct it.
FINDING NO: 2023-013 (Repeat 2022-017, 2021-024) STATE AGENCY: Oklahoma Department of Transportation FEDERAL AGENCY: Federal Transit Authority ALN: 20.509 FEDERAL PROGRAM NAME: Formula Grants for Rural Areas FEDERAL AWARD NUMBER: OK-2017-023-05, OK-2018-023-03, OK-2019-025-03, OK-2020-021-02, OK- 2021-018-00, OK-2022-016-00, OK-2022-025-00, OK-2022-027-00, OK-2023-026-00 FEDERAL AWARD YEAR: 2017, 2018, 2019, 2020, 2021, 2022, 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR 1201.1 states, “Except as otherwise provided in this part, the Department of Transportation adopts the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200). This part supersedes and repeals the requirements of the Department of Transportation Common Rules (49 CFR part 18 - Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments and 49 CFR part 19 - Uniform Administrative Requirements - Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations), except that grants and cooperative agreements executed prior to December 26, 2014 shall continue to be subject to 49 CFR parts 18 and 19 as in effect on the date of such grants or agreements. New parts with terminology specific to the Department of Transportation follow.” 2 CFR 200.332 states in part, “All pass-through entities must: … (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section.” 2 CFR 200.332 states in part, “All pass-through entities must: … (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) Resolve audit findings specifically related to the subaward. ...” 2 CFR 200.332 states in part, “All pass-through entities must: … (g) Verify that a subrecipient is audited as required by subpart F of this part.” 2 CFR 200.332 states in part, “All pass-through entities must: … (i) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 and in program regulations.” 2 CFR 200.521 states in part, “(a) General. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments or take other action. If the auditee has not completed corrective action, a timetable for follow- up should be given. … While not required, the Federal agency or pass-through entity may also issue a management decision on findings relating to the financial statements, which are required to be reported in accordance with GAGAS.” 2 CFR 200.521 states in part, “(d) Time requirements. The Federal agency or pass-through entity responsible for issuing a management decision must do so within six months of the FAC's acceptance of the audit report. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report.” Condition and Context: The Office of Mobility and Public Transit (OMPT) at the Oklahoma Department of Transportation (Department) is responsible for monitoring of subrecipients. Project managers at OMPT monitor specific subrecipients assigned to them. As part of this process, the project managers obtain subrecipients’ audit reports and forward them to the Department’s Cabinet-Wide Audit Office (CWO) for review. OMPT relies on responses received from CWO subsequent to review for identification of findings to monitor and assess the risk related to subrecipients’ compliance with Federal statutes, regulations, and the terms and conditions of the subaward. OMPT uses an audit tracking spreadsheet as a control to ensure the requirements described in 2 CFR 200.332 are met. OMPT’s program managers are required to update the audit tracking spreadsheet for those subrecipients assigned to them. Based on our review of the tracking spreadsheet and supporting documentation, we determined that the control process was designed but not properly implemented. Based on inquiry and review of documentation related to financial and performance audits applicable to 23 subrecipients, we noted: • For 10 (43.48%) of 23 subrecipients, the OMPT did not obtain an audit report. • For 11 (47.83%) of 23 subrecipients, the OMPT was unable to provide documentation to support that a review of the subrecipients’ financial or performance audit was performed by CWO. • The OMPT did not take timely and appropriate action on deficiencies detected through audits and did not issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse. • The Department does not have an adequate process in place to determine whether subrecipients expended $750,000 or more in Federal awards for the year and are, therefore, subject to a single audit. • The OMPT does not have an established process to evaluate the risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subawards. Cause: Internal controls have not been designed and implemented to ensure compliance with all subrecipient monitoring requirements. The Department does not have a process in place to determine the type of audit required for each subrecipient. Each program manager is responsible for updating the information for their assigned subrecipients; however there is no oversight or mechanism in place to ensure that all subrecipients’ are accurately tracked. Effect: The Department is not in compliance with the requirements of 2 CFR 200.332. Because the OMPT is not performing adequate risk assessments, monitoring of subrecipients is not designed to account for the level of noncompliance risk the subrecipient poses. If audits are not adequately tracked, the Department cannot meet the imposed deadlines for follow-up. In addition, because information regarding Federal expenditures is not sought, subrecipients may not obtain a required Single Audit. Lastly, because documentation supporting the review of subrecipients’ audit reports was not maintained by CWO, we were unable to determine that a review of these audits took place. Recommendation: We recommend that the OMPT develop and implement procedures to ensure subrecipient risk assessments are performed annually and then incorporate the assessed risk in the design of its monitoring activities. We recommend the OMPT inquire after the subrecipients’ year-end as to the total Federal expenditures during the preceding fiscal year and update the Single Audit Tracking Sheet with the type of audit required. Further, we recommend the Single Audit Tracking Sheet be updated monthly to ensure all review/follow-up deadlines are met. Lastly, we recommend CWO implement a process to ensure that the review of subrecipients’ audit reports is adequately documented, and results are communicated to OMPT in a timely manner. Views of Responsible Official(s) Contact Person: OMPT - Eric Rose/Bobby Parkinson & Anne Antonelli, Internal Audit – Holly Lowe Anticipated Completion Date: 7/1/2025 Corrective Action Planned: The Oklahoma Department of Transportation agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-013 (Repeat 2022-017, 2021-024) STATE AGENCY: Oklahoma Department of Transportation FEDERAL AGENCY: Federal Transit Authority ALN: 20.509 FEDERAL PROGRAM NAME: Formula Grants for Rural Areas FEDERAL AWARD NUMBER: OK-2017-023-05, OK-2018-023-03, OK-2019-025-03, OK-2020-021-02, OK- 2021-018-00, OK-2022-016-00, OK-2022-025-00, OK-2022-027-00, OK-2023-026-00 FEDERAL AWARD YEAR: 2017, 2018, 2019, 2020, 2021, 2022, 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR 1201.1 states, “Except as otherwise provided in this part, the Department of Transportation adopts the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200). This part supersedes and repeals the requirements of the Department of Transportation Common Rules (49 CFR part 18 - Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments and 49 CFR part 19 - Uniform Administrative Requirements - Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations), except that grants and cooperative agreements executed prior to December 26, 2014 shall continue to be subject to 49 CFR parts 18 and 19 as in effect on the date of such grants or agreements. New parts with terminology specific to the Department of Transportation follow.” 2 CFR 200.332 states in part, “All pass-through entities must: … (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section.” 2 CFR 200.332 states in part, “All pass-through entities must: … (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) Resolve audit findings specifically related to the subaward. ...” 2 CFR 200.332 states in part, “All pass-through entities must: … (g) Verify that a subrecipient is audited as required by subpart F of this part.” 2 CFR 200.332 states in part, “All pass-through entities must: … (i) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 and in program regulations.” 2 CFR 200.521 states in part, “(a) General. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments or take other action. If the auditee has not completed corrective action, a timetable for follow- up should be given. … While not required, the Federal agency or pass-through entity may also issue a management decision on findings relating to the financial statements, which are required to be reported in accordance with GAGAS.” 2 CFR 200.521 states in part, “(d) Time requirements. The Federal agency or pass-through entity responsible for issuing a management decision must do so within six months of the FAC's acceptance of the audit report. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report.” Condition and Context: The Office of Mobility and Public Transit (OMPT) at the Oklahoma Department of Transportation (Department) is responsible for monitoring of subrecipients. Project managers at OMPT monitor specific subrecipients assigned to them. As part of this process, the project managers obtain subrecipients’ audit reports and forward them to the Department’s Cabinet-Wide Audit Office (CWO) for review. OMPT relies on responses received from CWO subsequent to review for identification of findings to monitor and assess the risk related to subrecipients’ compliance with Federal statutes, regulations, and the terms and conditions of the subaward. OMPT uses an audit tracking spreadsheet as a control to ensure the requirements described in 2 CFR 200.332 are met. OMPT’s program managers are required to update the audit tracking spreadsheet for those subrecipients assigned to them. Based on our review of the tracking spreadsheet and supporting documentation, we determined that the control process was designed but not properly implemented. Based on inquiry and review of documentation related to financial and performance audits applicable to 23 subrecipients, we noted: • For 10 (43.48%) of 23 subrecipients, the OMPT did not obtain an audit report. • For 11 (47.83%) of 23 subrecipients, the OMPT was unable to provide documentation to support that a review of the subrecipients’ financial or performance audit was performed by CWO. • The OMPT did not take timely and appropriate action on deficiencies detected through audits and did not issue a management decision on audit findings within six months of acceptance of the audit report by the Federal Audit Clearinghouse. • The Department does not have an adequate process in place to determine whether subrecipients expended $750,000 or more in Federal awards for the year and are, therefore, subject to a single audit. • The OMPT does not have an established process to evaluate the risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subawards. Cause: Internal controls have not been designed and implemented to ensure compliance with all subrecipient monitoring requirements. The Department does not have a process in place to determine the type of audit required for each subrecipient. Each program manager is responsible for updating the information for their assigned subrecipients; however there is no oversight or mechanism in place to ensure that all subrecipients’ are accurately tracked. Effect: The Department is not in compliance with the requirements of 2 CFR 200.332. Because the OMPT is not performing adequate risk assessments, monitoring of subrecipients is not designed to account for the level of noncompliance risk the subrecipient poses. If audits are not adequately tracked, the Department cannot meet the imposed deadlines for follow-up. In addition, because information regarding Federal expenditures is not sought, subrecipients may not obtain a required Single Audit. Lastly, because documentation supporting the review of subrecipients’ audit reports was not maintained by CWO, we were unable to determine that a review of these audits took place. Recommendation: We recommend that the OMPT develop and implement procedures to ensure subrecipient risk assessments are performed annually and then incorporate the assessed risk in the design of its monitoring activities. We recommend the OMPT inquire after the subrecipients’ year-end as to the total Federal expenditures during the preceding fiscal year and update the Single Audit Tracking Sheet with the type of audit required. Further, we recommend the Single Audit Tracking Sheet be updated monthly to ensure all review/follow-up deadlines are met. Lastly, we recommend CWO implement a process to ensure that the review of subrecipients’ audit reports is adequately documented, and results are communicated to OMPT in a timely manner. Views of Responsible Official(s) Contact Person: OMPT - Eric Rose/Bobby Parkinson & Anne Antonelli, Internal Audit – Holly Lowe Anticipated Completion Date: 7/1/2025 Corrective Action Planned: The Oklahoma Department of Transportation agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-096 (Repeat finding 2022-071) STATE AGENCY: State of Oklahoma FEDERAL AGENCY: US Department of the Treasury ALN: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund (CRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $248,779 Criteria: 2 CFR § 200.303 - Internal controls states in part, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.332 - Requirements for pass-through entities states in part, “All pass-through entities must: … (b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). (2) All requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications (see § 200.415) required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency; … (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a passthrough entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). (d) If appropriate, consider implementing specific conditions in a subaward as described in § 200.208 and notify the Federal agency of the specific conditions. (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. … .” The Department of the Treasury Federal Register, Vol. 86, No. 10 from January 15, 2021 states in part, “The CARES [Coronavirus Aid, Relief, & Economic Security Act] Act provides that payments from the Fund may only be used to cover costs that— 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021. … This guidance applies in a like manner to costs of subrecipients. Thus, a grant or loan, for example, provided by a recipient using payments from the Fund must be used by the subrecipient only to purchase (or reimburse a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. The direct recipient of payments from the Fund is ultimately responsible for compliance with this limitation on use of payments from the Fund. Condition and Context: Per the GAAP Package Z - Schedule of Expenditures of Federal Awards (SEFA), the State of Oklahoma reported $249,660.69 in CRF cash basis expenditures reimbursed to subrecipients by the CARES FORWARD1 team. We tested all five (5) reimbursement transactions for one subrecipient and noted the following: • One (20%) of the five (5) transactions totaling $4,594.40 contained no supporting documentation. • Four (80%) of the five (5) transactions totaling $245,066.29 contained costs totaling $244,184.29 that were incurred by the subrecipient after 12/31/2021 (covered period). The State of Oklahoma – CARES FORWARD team failed to perform an adequate review to ensure the subrecipient purchased (or reimbursed a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. Further, we noted Award documents provided to the subrecipient did not include the terms and conditions of the subaward. Also, the CARES FORWARD team did not perform a risk assessment on subrecipients receiving continued funding during SFY 2023. Lastly, while performing Single Audit monitoring testwork on three (3) subrecipients for SFY 2022, we determined that the State of Oklahoma - CARES FORWARD team did not perform tracking on two (2) of the subrecipients that received CRF funds. For the two subrecipients, there is no documentation to show that OMES received the SFY 2022 Single Audit, evaluated whether the subrecipient took corrective action on all significant developments that affect the subaward, and issued a management decision for any audit findings pertaining to the federal award. Cause: Adequate controls were not in place to ensure the monitoring process utilized by the CARES FORWARD team considered the Department of Treasury guidance when determining whether the financial activities of the subrecipients complied with Federal statutes, regulations, and the terms and conditions of the Federal award prior to payment. Also, the State of Oklahoma – CARES FORWARD2 team did not have sufficient internal controls in place to ensure subrecipient award documentation included the terms and conditions of the subaward in accordance with 2 CFR § 200.332. Further, the State of Oklahoma – CARES FORWARD team did not have sufficient internal controls in place to ensure subrecipients are assessed for risk in accordance with 2 CFR § 200.332. Lastly, the State of Oklahoma – CARES Forward team did not have sufficient internal controls in place to ensure subrecipients are monitored for a Single Audit in accordance with 2 CFR § 200.332. Effect: These deficiencies resulted in questioned costs of $248,779 goods or services for which receipt both was needed and occurred within the covered period. The $248,779 in questioned costs related to subrecipient expenses is included in Finding 2023-108 (Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance) as well, as the same transactions failed to meet requirements under all these compliance areas. The amount should not be considered cumulative. The State of Oklahoma – CARES FORWARD team did not comply with 2 CFR § 200.332. Recommendation: We recommend for future grants that the State of Oklahoma strengthen their control process related to subrecipients to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Views of Responsible Official(s) Contact Person: Brandy Manek Anticipated Completion Date: September 2022 Corrective Action Planned: The State of Oklahoma/Office of Management and Enterprise Services partially agrees with this finding. See corrective action plan located in the corrective action plan section of the report. Auditor Response: The State Auditor & Inspector’s Office questioned $248,779 to one subrecipient for SFY 2023 based on the expenditures for goods or services both needing to be within the covered period and occurring within the covered period. Therefore, since the subrecipient payments were after the covered period (December 31, 2021), the finding will stand. Further, since there was not a risk assessment performed during the year and the Single Audit tracking was not performed for SFY 2022 for 2 of the 3 subrecipients, the finding will stand.
FINDING NO: 2023-096 (Repeat finding 2022-071) STATE AGENCY: State of Oklahoma FEDERAL AGENCY: US Department of the Treasury ALN: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund (CRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $248,779 Criteria: 2 CFR § 200.303 - Internal controls states in part, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.332 - Requirements for pass-through entities states in part, “All pass-through entities must: … (b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). (2) All requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications (see § 200.415) required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency; … (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a passthrough entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). (d) If appropriate, consider implementing specific conditions in a subaward as described in § 200.208 and notify the Federal agency of the specific conditions. (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. … .” The Department of the Treasury Federal Register, Vol. 86, No. 10 from January 15, 2021 states in part, “The CARES [Coronavirus Aid, Relief, & Economic Security Act] Act provides that payments from the Fund may only be used to cover costs that— 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021. … This guidance applies in a like manner to costs of subrecipients. Thus, a grant or loan, for example, provided by a recipient using payments from the Fund must be used by the subrecipient only to purchase (or reimburse a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. The direct recipient of payments from the Fund is ultimately responsible for compliance with this limitation on use of payments from the Fund. Condition and Context: Per the GAAP Package Z - Schedule of Expenditures of Federal Awards (SEFA), the State of Oklahoma reported $249,660.69 in CRF cash basis expenditures reimbursed to subrecipients by the CARES FORWARD1 team. We tested all five (5) reimbursement transactions for one subrecipient and noted the following: • One (20%) of the five (5) transactions totaling $4,594.40 contained no supporting documentation. • Four (80%) of the five (5) transactions totaling $245,066.29 contained costs totaling $244,184.29 that were incurred by the subrecipient after 12/31/2021 (covered period). The State of Oklahoma – CARES FORWARD team failed to perform an adequate review to ensure the subrecipient purchased (or reimbursed a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. Further, we noted Award documents provided to the subrecipient did not include the terms and conditions of the subaward. Also, the CARES FORWARD team did not perform a risk assessment on subrecipients receiving continued funding during SFY 2023. Lastly, while performing Single Audit monitoring testwork on three (3) subrecipients for SFY 2022, we determined that the State of Oklahoma - CARES FORWARD team did not perform tracking on two (2) of the subrecipients that received CRF funds. For the two subrecipients, there is no documentation to show that OMES received the SFY 2022 Single Audit, evaluated whether the subrecipient took corrective action on all significant developments that affect the subaward, and issued a management decision for any audit findings pertaining to the federal award. Cause: Adequate controls were not in place to ensure the monitoring process utilized by the CARES FORWARD team considered the Department of Treasury guidance when determining whether the financial activities of the subrecipients complied with Federal statutes, regulations, and the terms and conditions of the Federal award prior to payment. Also, the State of Oklahoma – CARES FORWARD2 team did not have sufficient internal controls in place to ensure subrecipient award documentation included the terms and conditions of the subaward in accordance with 2 CFR § 200.332. Further, the State of Oklahoma – CARES FORWARD team did not have sufficient internal controls in place to ensure subrecipients are assessed for risk in accordance with 2 CFR § 200.332. Lastly, the State of Oklahoma – CARES Forward team did not have sufficient internal controls in place to ensure subrecipients are monitored for a Single Audit in accordance with 2 CFR § 200.332. Effect: These deficiencies resulted in questioned costs of $248,779 goods or services for which receipt both was needed and occurred within the covered period. The $248,779 in questioned costs related to subrecipient expenses is included in Finding 2023-108 (Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance) as well, as the same transactions failed to meet requirements under all these compliance areas. The amount should not be considered cumulative. The State of Oklahoma – CARES FORWARD team did not comply with 2 CFR § 200.332. Recommendation: We recommend for future grants that the State of Oklahoma strengthen their control process related to subrecipients to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Views of Responsible Official(s) Contact Person: Brandy Manek Anticipated Completion Date: September 2022 Corrective Action Planned: The State of Oklahoma/Office of Management and Enterprise Services partially agrees with this finding. See corrective action plan located in the corrective action plan section of the report. Auditor Response: The State Auditor & Inspector’s Office questioned $248,779 to one subrecipient for SFY 2023 based on the expenditures for goods or services both needing to be within the covered period and occurring within the covered period. Therefore, since the subrecipient payments were after the covered period (December 31, 2021), the finding will stand. Further, since there was not a risk assessment performed during the year and the Single Audit tracking was not performed for SFY 2022 for 2 of the 3 subrecipients, the finding will stand.
FINDING NO: 2023-096 (Repeat finding 2022-071) STATE AGENCY: State of Oklahoma FEDERAL AGENCY: US Department of the Treasury ALN: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund (CRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $248,779 Criteria: 2 CFR § 200.303 - Internal controls states in part, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.332 - Requirements for pass-through entities states in part, “All pass-through entities must: … (b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). (2) All requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications (see § 200.415) required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency; … (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a passthrough entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). (d) If appropriate, consider implementing specific conditions in a subaward as described in § 200.208 and notify the Federal agency of the specific conditions. (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. … .” The Department of the Treasury Federal Register, Vol. 86, No. 10 from January 15, 2021 states in part, “The CARES [Coronavirus Aid, Relief, & Economic Security Act] Act provides that payments from the Fund may only be used to cover costs that— 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021. … This guidance applies in a like manner to costs of subrecipients. Thus, a grant or loan, for example, provided by a recipient using payments from the Fund must be used by the subrecipient only to purchase (or reimburse a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. The direct recipient of payments from the Fund is ultimately responsible for compliance with this limitation on use of payments from the Fund. Condition and Context: Per the GAAP Package Z - Schedule of Expenditures of Federal Awards (SEFA), the State of Oklahoma reported $249,660.69 in CRF cash basis expenditures reimbursed to subrecipients by the CARES FORWARD1 team. We tested all five (5) reimbursement transactions for one subrecipient and noted the following: • One (20%) of the five (5) transactions totaling $4,594.40 contained no supporting documentation. • Four (80%) of the five (5) transactions totaling $245,066.29 contained costs totaling $244,184.29 that were incurred by the subrecipient after 12/31/2021 (covered period). The State of Oklahoma – CARES FORWARD team failed to perform an adequate review to ensure the subrecipient purchased (or reimbursed a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. Further, we noted Award documents provided to the subrecipient did not include the terms and conditions of the subaward. Also, the CARES FORWARD team did not perform a risk assessment on subrecipients receiving continued funding during SFY 2023. Lastly, while performing Single Audit monitoring testwork on three (3) subrecipients for SFY 2022, we determined that the State of Oklahoma - CARES FORWARD team did not perform tracking on two (2) of the subrecipients that received CRF funds. For the two subrecipients, there is no documentation to show that OMES received the SFY 2022 Single Audit, evaluated whether the subrecipient took corrective action on all significant developments that affect the subaward, and issued a management decision for any audit findings pertaining to the federal award. Cause: Adequate controls were not in place to ensure the monitoring process utilized by the CARES FORWARD team considered the Department of Treasury guidance when determining whether the financial activities of the subrecipients complied with Federal statutes, regulations, and the terms and conditions of the Federal award prior to payment. Also, the State of Oklahoma – CARES FORWARD2 team did not have sufficient internal controls in place to ensure subrecipient award documentation included the terms and conditions of the subaward in accordance with 2 CFR § 200.332. Further, the State of Oklahoma – CARES FORWARD team did not have sufficient internal controls in place to ensure subrecipients are assessed for risk in accordance with 2 CFR § 200.332. Lastly, the State of Oklahoma – CARES Forward team did not have sufficient internal controls in place to ensure subrecipients are monitored for a Single Audit in accordance with 2 CFR § 200.332. Effect: These deficiencies resulted in questioned costs of $248,779 goods or services for which receipt both was needed and occurred within the covered period. The $248,779 in questioned costs related to subrecipient expenses is included in Finding 2023-108 (Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance) as well, as the same transactions failed to meet requirements under all these compliance areas. The amount should not be considered cumulative. The State of Oklahoma – CARES FORWARD team did not comply with 2 CFR § 200.332. Recommendation: We recommend for future grants that the State of Oklahoma strengthen their control process related to subrecipients to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Views of Responsible Official(s) Contact Person: Brandy Manek Anticipated Completion Date: September 2022 Corrective Action Planned: The State of Oklahoma/Office of Management and Enterprise Services partially agrees with this finding. See corrective action plan located in the corrective action plan section of the report. Auditor Response: The State Auditor & Inspector’s Office questioned $248,779 to one subrecipient for SFY 2023 based on the expenditures for goods or services both needing to be within the covered period and occurring within the covered period. Therefore, since the subrecipient payments were after the covered period (December 31, 2021), the finding will stand. Further, since there was not a risk assessment performed during the year and the Single Audit tracking was not performed for SFY 2022 for 2 of the 3 subrecipients, the finding will stand.
FINDING NO: 2023-096 (Repeat finding 2022-071) STATE AGENCY: State of Oklahoma FEDERAL AGENCY: US Department of the Treasury ALN: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund (CRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $248,779 Criteria: 2 CFR § 200.303 - Internal controls states in part, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.332 - Requirements for pass-through entities states in part, “All pass-through entities must: … (b) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information provided below. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: (1) Federal award identification. (i) Subrecipient's name (must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated in the subaward; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity; (xii) Assistance Listings title and number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement; (xiii) Identification of whether the Federal award is for research and development; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used in accordance with § 200.414). (2) All requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award. This includes information and certifications (see § 200.415) required for submitting financial and performance reports that the pass-through entity must provide to the Federal agency; … (c) Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a passthrough entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). (d) If appropriate, consider implementing specific conditions in a subaward as described in § 200.208 and notify the Federal agency of the specific conditions. (e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports. (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the pass-through entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. … .” The Department of the Treasury Federal Register, Vol. 86, No. 10 from January 15, 2021 states in part, “The CARES [Coronavirus Aid, Relief, & Economic Security Act] Act provides that payments from the Fund may only be used to cover costs that— 1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19); 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and 3. were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021. … This guidance applies in a like manner to costs of subrecipients. Thus, a grant or loan, for example, provided by a recipient using payments from the Fund must be used by the subrecipient only to purchase (or reimburse a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. The direct recipient of payments from the Fund is ultimately responsible for compliance with this limitation on use of payments from the Fund. Condition and Context: Per the GAAP Package Z - Schedule of Expenditures of Federal Awards (SEFA), the State of Oklahoma reported $249,660.69 in CRF cash basis expenditures reimbursed to subrecipients by the CARES FORWARD1 team. We tested all five (5) reimbursement transactions for one subrecipient and noted the following: • One (20%) of the five (5) transactions totaling $4,594.40 contained no supporting documentation. • Four (80%) of the five (5) transactions totaling $245,066.29 contained costs totaling $244,184.29 that were incurred by the subrecipient after 12/31/2021 (covered period). The State of Oklahoma – CARES FORWARD team failed to perform an adequate review to ensure the subrecipient purchased (or reimbursed a purchase of) goods or services for which receipt both is needed within the covered period and occurs within the covered period. Further, we noted Award documents provided to the subrecipient did not include the terms and conditions of the subaward. Also, the CARES FORWARD team did not perform a risk assessment on subrecipients receiving continued funding during SFY 2023. Lastly, while performing Single Audit monitoring testwork on three (3) subrecipients for SFY 2022, we determined that the State of Oklahoma - CARES FORWARD team did not perform tracking on two (2) of the subrecipients that received CRF funds. For the two subrecipients, there is no documentation to show that OMES received the SFY 2022 Single Audit, evaluated whether the subrecipient took corrective action on all significant developments that affect the subaward, and issued a management decision for any audit findings pertaining to the federal award. Cause: Adequate controls were not in place to ensure the monitoring process utilized by the CARES FORWARD team considered the Department of Treasury guidance when determining whether the financial activities of the subrecipients complied with Federal statutes, regulations, and the terms and conditions of the Federal award prior to payment. Also, the State of Oklahoma – CARES FORWARD2 team did not have sufficient internal controls in place to ensure subrecipient award documentation included the terms and conditions of the subaward in accordance with 2 CFR § 200.332. Further, the State of Oklahoma – CARES FORWARD team did not have sufficient internal controls in place to ensure subrecipients are assessed for risk in accordance with 2 CFR § 200.332. Lastly, the State of Oklahoma – CARES Forward team did not have sufficient internal controls in place to ensure subrecipients are monitored for a Single Audit in accordance with 2 CFR § 200.332. Effect: These deficiencies resulted in questioned costs of $248,779 goods or services for which receipt both was needed and occurred within the covered period. The $248,779 in questioned costs related to subrecipient expenses is included in Finding 2023-108 (Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance) as well, as the same transactions failed to meet requirements under all these compliance areas. The amount should not be considered cumulative. The State of Oklahoma – CARES FORWARD team did not comply with 2 CFR § 200.332. Recommendation: We recommend for future grants that the State of Oklahoma strengthen their control process related to subrecipients to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Views of Responsible Official(s) Contact Person: Brandy Manek Anticipated Completion Date: September 2022 Corrective Action Planned: The State of Oklahoma/Office of Management and Enterprise Services partially agrees with this finding. See corrective action plan located in the corrective action plan section of the report. Auditor Response: The State Auditor & Inspector’s Office questioned $248,779 to one subrecipient for SFY 2023 based on the expenditures for goods or services both needing to be within the covered period and occurring within the covered period. Therefore, since the subrecipient payments were after the covered period (December 31, 2021), the finding will stand. Further, since there was not a risk assessment performed during the year and the Single Audit tracking was not performed for SFY 2022 for 2 of the 3 subrecipients, the finding will stand.
FINDING NO: 2023-026 (Repeat 2022-032, 2022-033, 2022-034) STATE AGENCY: State of Oklahoma, Office of Management and Enterprise Services (OMES) FEDERAL AGENCY: US Department of Treasury ALN: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance (ERA 1 and ERA 2) FEDERAL AWARD NUMBER: ERA028 and ERAE0259 FEDERAL AWARD YEAR: 2022 and 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: U.S Department of the Treasury Emergency Rental Assistance Grantee Award Form (8) (a-b) Compliance with Applicable Law and Regulations, states in part, “ a. Recipient agrees to comply with the requirements of Section 501 and Treasury interpretive guidance regarding such requirements. Recipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and Recipient shall provide for such compliance in any agreements it enters into with other parties relating to this award. b. Federal regulations applicable to this award include, without limitation, the following: i. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart F -Audit Requirements of the Uniform Guidance, implementing the Single Audit Act, shall apply to this award… iii. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference. 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.332 Requirements for pass-through entities states in part, “All pass-through entities must: … (b) evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” 2 CFR § 200.334 – Retention requirements for records states in part, “Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.” 2 CFR § 200.337 Access to records states in part, “(a) Records of non-Federal entities. The Federal awarding agency, Inspectors General, the Comptroller General of the United States, and the pass-through entity, or any of their authorized representatives, must have the right of access to any documents, papers, or other records of the non-Federal entity which are pertinent to the Federal award, in order to make audits, examinations, excerpts, and transcripts. The right also includes timely and reasonable access to the non-Federal entity's personnel for the purpose of interview and discussion related to such documents.” Condition and Context: The State of Oklahoma entered into agreements with two non-profit entities, Restore Hope Ministries and Communities Foundation of Oklahoma (RHM and CFO), to administer the ERA program for the State of Oklahoma. SAI reviewed the agreements for these two entities and determined that both agreements constituted a subrecipient relationship that would be subject to Part M Subrecipient Monitoring requirements. The Office of Management Enterprise Services (OMES) did not perform any subrecipient monitoring procedures during State Fiscal Year (SFY) 2023. In addition, the agreements with both subrecipients to administer the ERA 1 program ended on March 31, 2022, and stated funds were “to be used for necessary expenditures/obligations that were or will be incurred through March 31, 2022.” The State did not obtain a new agreement to cover fiscal year 2023 when they advanced ERA 1 payments totaling $25,878,270.13, of which the subrecipients expended $9,459,407.08. OMES provided these subrecipients advance payments based on expected program rental and utility expenditures for the month and administrative costs on a set percentage, 9.3% for RHM for ERA 1; and 10 % and 15% for CFO for ERA 1 and ERA 2 respectively. The subrecipients did not submit, and OMES did not review, any supporting documentation for program expenditures incurred by the subrecipients. While OMES did obtain summary information related to rental and utility payments and housing stability payments made for reporting purposes, OMES did not obtain or review any support for administrative costs to ensure that the costs were attributable to providing financial assistance and housing stability services to eligible households. OMES did not have a process in place to review potential fraud identified by the subrecipients and ensure that the agency’s response was adequate. OMES also did not have a process in place to ensure subrecipients were adequately evaluating for the types of fraud that may occur or identifying fraud risk factors applicable to the ERA program. OMES was unable to provide documentation to support that a risk assessment was performed in which each subrecipient would have been verified to have maintained an active status in the SAM.gov system, and that subrecipients were not suspended or disbarred. Cause: OMES did not establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Adequate subrecipient monitoring policies and procedures were not established by the State prior to entering into agreements with subrecipients. OMES personnel responsible for oversight of the ERA grant do not normally oversee Federal grant programs, and do not have an adequate understanding or experience with administering Federal grant funds and understanding the types of activities that may be supported by the ERA grant. Effect: Failure to ensure subrecipient agreements are appropriately updated to cover the Federal grant period could result in inappropriate use of federal funds past the expiration date of the agreement. The OMES did not comply with 2 CFR § 200.332. In addition, without proper monitoring the subrecipients may not comply with the award terms and there is an increased risk of mismanagement and fraud by the subrecipients. Recommendation: We recommend that OMES develop and implement internal controls to ensure: • Each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward is appropriately evaluated for monitoring purposes. • Current and future ERA grant funds are administered in accordance with applicable Federal laws and grant requirements, including ensuring that grant subrecipients are provided the proper award documentation. • Adequate supporting documentation for actual program and administrative expenditures incurred is obtained, reviewed, and maintained by the State in order to ensure subrecipients are only expending ERA funds for allowable costs. • Fraud identified by subrecipients is appropriately reviewed and response is adequate. • Subrecipients adequately evaluate types of fraud that may occur and identify fraud risk factors applicable to ERA program. • Subrecipients are reimbursed for administrative costs based on supporting documentation for actual costs incurred rather than making advanced payments for a set percentage of program funds advanced. • Subrecipient records are available for inspection for monitoring and other audit purposes as required by OMES. • Subrecipient agreements are reviewed and updated regularly so the subrecipient is not operating under an expired agreement. Views of Responsible Official(s) Contact Person: Brandy Manek Anticipated Completion Date: Ongoing throughout the life of the grant Corrective Action Planned: The Office of Management and Enterprise Services agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Auditor Response: The attached risk assessments were completed in 2020 by another agency, and SAI would have no way of knowing if they were used by OMES. In addition, a risk assessment needs to be performed annually by OMES.
FINDING NO: 2023-026 (Repeat 2022-032, 2022-033, 2022-034) STATE AGENCY: State of Oklahoma, Office of Management and Enterprise Services (OMES) FEDERAL AGENCY: US Department of Treasury ALN: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance (ERA 1 and ERA 2) FEDERAL AWARD NUMBER: ERA028 and ERAE0259 FEDERAL AWARD YEAR: 2022 and 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: U.S Department of the Treasury Emergency Rental Assistance Grantee Award Form (8) (a-b) Compliance with Applicable Law and Regulations, states in part, “ a. Recipient agrees to comply with the requirements of Section 501 and Treasury interpretive guidance regarding such requirements. Recipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and Recipient shall provide for such compliance in any agreements it enters into with other parties relating to this award. b. Federal regulations applicable to this award include, without limitation, the following: i. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart F -Audit Requirements of the Uniform Guidance, implementing the Single Audit Act, shall apply to this award… iii. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference. 2 CFR § 200.303(a) – Internal Controls states in part, “The Non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR § 200.332 Requirements for pass-through entities states in part, “All pass-through entities must: … (b) evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: … (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” 2 CFR § 200.334 – Retention requirements for records states in part, “Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.” 2 CFR § 200.337 Access to records states in part, “(a) Records of non-Federal entities. The Federal awarding agency, Inspectors General, the Comptroller General of the United States, and the pass-through entity, or any of their authorized representatives, must have the right of access to any documents, papers, or other records of the non-Federal entity which are pertinent to the Federal award, in order to make audits, examinations, excerpts, and transcripts. The right also includes timely and reasonable access to the non-Federal entity's personnel for the purpose of interview and discussion related to such documents.” Condition and Context: The State of Oklahoma entered into agreements with two non-profit entities, Restore Hope Ministries and Communities Foundation of Oklahoma (RHM and CFO), to administer the ERA program for the State of Oklahoma. SAI reviewed the agreements for these two entities and determined that both agreements constituted a subrecipient relationship that would be subject to Part M Subrecipient Monitoring requirements. The Office of Management Enterprise Services (OMES) did not perform any subrecipient monitoring procedures during State Fiscal Year (SFY) 2023. In addition, the agreements with both subrecipients to administer the ERA 1 program ended on March 31, 2022, and stated funds were “to be used for necessary expenditures/obligations that were or will be incurred through March 31, 2022.” The State did not obtain a new agreement to cover fiscal year 2023 when they advanced ERA 1 payments totaling $25,878,270.13, of which the subrecipients expended $9,459,407.08. OMES provided these subrecipients advance payments based on expected program rental and utility expenditures for the month and administrative costs on a set percentage, 9.3% for RHM for ERA 1; and 10 % and 15% for CFO for ERA 1 and ERA 2 respectively. The subrecipients did not submit, and OMES did not review, any supporting documentation for program expenditures incurred by the subrecipients. While OMES did obtain summary information related to rental and utility payments and housing stability payments made for reporting purposes, OMES did not obtain or review any support for administrative costs to ensure that the costs were attributable to providing financial assistance and housing stability services to eligible households. OMES did not have a process in place to review potential fraud identified by the subrecipients and ensure that the agency’s response was adequate. OMES also did not have a process in place to ensure subrecipients were adequately evaluating for the types of fraud that may occur or identifying fraud risk factors applicable to the ERA program. OMES was unable to provide documentation to support that a risk assessment was performed in which each subrecipient would have been verified to have maintained an active status in the SAM.gov system, and that subrecipients were not suspended or disbarred. Cause: OMES did not establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Adequate subrecipient monitoring policies and procedures were not established by the State prior to entering into agreements with subrecipients. OMES personnel responsible for oversight of the ERA grant do not normally oversee Federal grant programs, and do not have an adequate understanding or experience with administering Federal grant funds and understanding the types of activities that may be supported by the ERA grant. Effect: Failure to ensure subrecipient agreements are appropriately updated to cover the Federal grant period could result in inappropriate use of federal funds past the expiration date of the agreement. The OMES did not comply with 2 CFR § 200.332. In addition, without proper monitoring the subrecipients may not comply with the award terms and there is an increased risk of mismanagement and fraud by the subrecipients. Recommendation: We recommend that OMES develop and implement internal controls to ensure: • Each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward is appropriately evaluated for monitoring purposes. • Current and future ERA grant funds are administered in accordance with applicable Federal laws and grant requirements, including ensuring that grant subrecipients are provided the proper award documentation. • Adequate supporting documentation for actual program and administrative expenditures incurred is obtained, reviewed, and maintained by the State in order to ensure subrecipients are only expending ERA funds for allowable costs. • Fraud identified by subrecipients is appropriately reviewed and response is adequate. • Subrecipients adequately evaluate types of fraud that may occur and identify fraud risk factors applicable to ERA program. • Subrecipients are reimbursed for administrative costs based on supporting documentation for actual costs incurred rather than making advanced payments for a set percentage of program funds advanced. • Subrecipient records are available for inspection for monitoring and other audit purposes as required by OMES. • Subrecipient agreements are reviewed and updated regularly so the subrecipient is not operating under an expired agreement. Views of Responsible Official(s) Contact Person: Brandy Manek Anticipated Completion Date: Ongoing throughout the life of the grant Corrective Action Planned: The Office of Management and Enterprise Services agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Auditor Response: The attached risk assessments were completed in 2020 by another agency, and SAI would have no way of knowing if they were used by OMES. In addition, a risk assessment needs to be performed annually by OMES.
FINDING NO: 2023-014 STATE AGENCY: State of Oklahoma FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition and Context: The State of Oklahoma transferred all CSLFRF funds (except for administrative funds used by OMES-Grants Management Office (GMO) and the Legislative Service Bureau) to state agencies for them to execute projects they are charged with administering. The Oklahoma State Department of Health (agency #340), Health Care Workforce Training Commission (agency #619), and Department of Human Services (agency #830) had the material subrecipient monitoring activity for SFY 2023. These three state agencies notified their subrecipients of $750,000 federal expenditure threshold requiring a Single Audit per 2 CFR § 200.501 - Audit Requirements; however, they failed to track subrecipients that expended federal expenditures for CSLFRF, or in combination with other federal programs, to ensure that every subrecipient expending over $750,000 obtained a Single Audit. Cause: State agencies 340, 619, and 830 did not have sufficient processes or internal controls in place to ensure subrecipient Single Audits were tracked in accordance with 2 CFR § 200.332(d) and (f). Effect: State agencies 340, 619, and 830 may not be aware of potential subrecipient Single Audits with noncompliance issues related to the CSLFRF program. In addition, the agencies may fail to ensure that the subrecipient took appropriate corrective action on findings within the required timeframe. Recommendation: We recommend state agencies 340, 619, and 830 develop policies and procedures and internal controls to ensure that all CSLFRF subrecipients are tracked to determine if the subrecipient had $750,000 in total federal expenditures for the year. In addition, we recommend state agencies utilize a track sheet that documents the following: • Subrecipient SFY CSLFRF expenditures • If subrecipient is subject to single audit (y/n) • If subrecipient had CSLFRF findings (y/n) • Concerns with CSLFRF findings • Date single audit is received from subrecipient or obtained from the federal audit clearing house • Single Audit Report period (period covered by the single audit) • Whether the state agency received a copy of the required audit from the subrecipient within 9 months of the subrecipient's fiscal year end • Dates of follow-ups made to the subrecipient requesting single audits • Notes to document additional information such as delays in audit reports • Whether the state agency issued a management decision on audit findings within 6 months after receipt of the subrecipient's audit report • Whether the state agency ensured that subrecipients took appropriate and timely corrective action on all CSLFRF audit findings Views of Responsible Official(s) Contact Person: OMES: Parker Wise 619: Sara Librandi, Kami Fullingim 340: Diane Brown, Danielle Smith, Tracey Douglas 830: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: State agency 830 states “a process is already in place through the Office of Inspector General (OIG) to identify subrecipients exceeding the $750,000 threshold”; however, subrecipients with expenditures below the threshold must also be tracked to ensure total federal expenditures from all federal awards obtain a Single Audit. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited”. Therefore, state agency 830 acting as the pass-through entity must verify every subrecipient is audited. In addition, contractual language requiring the subrecipient submit a single audit if the threshold is met does not release the passthrough entity of ensuring the subrecipient’s total federal expenditures are tracked. We have encountered instances where subrecipients fail to provide single audits to pass-through entities; therefore, increasing the chances of the passthrough entity not issuing a management decision for applicable audit findings pertaining only to the federal award provided.
FINDING NO: 2023-014 STATE AGENCY: State of Oklahoma FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition and Context: The State of Oklahoma transferred all CSLFRF funds (except for administrative funds used by OMES-Grants Management Office (GMO) and the Legislative Service Bureau) to state agencies for them to execute projects they are charged with administering. The Oklahoma State Department of Health (agency #340), Health Care Workforce Training Commission (agency #619), and Department of Human Services (agency #830) had the material subrecipient monitoring activity for SFY 2023. These three state agencies notified their subrecipients of $750,000 federal expenditure threshold requiring a Single Audit per 2 CFR § 200.501 - Audit Requirements; however, they failed to track subrecipients that expended federal expenditures for CSLFRF, or in combination with other federal programs, to ensure that every subrecipient expending over $750,000 obtained a Single Audit. Cause: State agencies 340, 619, and 830 did not have sufficient processes or internal controls in place to ensure subrecipient Single Audits were tracked in accordance with 2 CFR § 200.332(d) and (f). Effect: State agencies 340, 619, and 830 may not be aware of potential subrecipient Single Audits with noncompliance issues related to the CSLFRF program. In addition, the agencies may fail to ensure that the subrecipient took appropriate corrective action on findings within the required timeframe. Recommendation: We recommend state agencies 340, 619, and 830 develop policies and procedures and internal controls to ensure that all CSLFRF subrecipients are tracked to determine if the subrecipient had $750,000 in total federal expenditures for the year. In addition, we recommend state agencies utilize a track sheet that documents the following: • Subrecipient SFY CSLFRF expenditures • If subrecipient is subject to single audit (y/n) • If subrecipient had CSLFRF findings (y/n) • Concerns with CSLFRF findings • Date single audit is received from subrecipient or obtained from the federal audit clearing house • Single Audit Report period (period covered by the single audit) • Whether the state agency received a copy of the required audit from the subrecipient within 9 months of the subrecipient's fiscal year end • Dates of follow-ups made to the subrecipient requesting single audits • Notes to document additional information such as delays in audit reports • Whether the state agency issued a management decision on audit findings within 6 months after receipt of the subrecipient's audit report • Whether the state agency ensured that subrecipients took appropriate and timely corrective action on all CSLFRF audit findings Views of Responsible Official(s) Contact Person: OMES: Parker Wise 619: Sara Librandi, Kami Fullingim 340: Diane Brown, Danielle Smith, Tracey Douglas 830: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: State agency 830 states “a process is already in place through the Office of Inspector General (OIG) to identify subrecipients exceeding the $750,000 threshold”; however, subrecipients with expenditures below the threshold must also be tracked to ensure total federal expenditures from all federal awards obtain a Single Audit. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited”. Therefore, state agency 830 acting as the pass-through entity must verify every subrecipient is audited. In addition, contractual language requiring the subrecipient submit a single audit if the threshold is met does not release the passthrough entity of ensuring the subrecipient’s total federal expenditures are tracked. We have encountered instances where subrecipients fail to provide single audits to pass-through entities; therefore, increasing the chances of the passthrough entity not issuing a management decision for applicable audit findings pertaining only to the federal award provided.
FINDING NO: 2023-014 STATE AGENCY: State of Oklahoma FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition and Context: The State of Oklahoma transferred all CSLFRF funds (except for administrative funds used by OMES-Grants Management Office (GMO) and the Legislative Service Bureau) to state agencies for them to execute projects they are charged with administering. The Oklahoma State Department of Health (agency #340), Health Care Workforce Training Commission (agency #619), and Department of Human Services (agency #830) had the material subrecipient monitoring activity for SFY 2023. These three state agencies notified their subrecipients of $750,000 federal expenditure threshold requiring a Single Audit per 2 CFR § 200.501 - Audit Requirements; however, they failed to track subrecipients that expended federal expenditures for CSLFRF, or in combination with other federal programs, to ensure that every subrecipient expending over $750,000 obtained a Single Audit. Cause: State agencies 340, 619, and 830 did not have sufficient processes or internal controls in place to ensure subrecipient Single Audits were tracked in accordance with 2 CFR § 200.332(d) and (f). Effect: State agencies 340, 619, and 830 may not be aware of potential subrecipient Single Audits with noncompliance issues related to the CSLFRF program. In addition, the agencies may fail to ensure that the subrecipient took appropriate corrective action on findings within the required timeframe. Recommendation: We recommend state agencies 340, 619, and 830 develop policies and procedures and internal controls to ensure that all CSLFRF subrecipients are tracked to determine if the subrecipient had $750,000 in total federal expenditures for the year. In addition, we recommend state agencies utilize a track sheet that documents the following: • Subrecipient SFY CSLFRF expenditures • If subrecipient is subject to single audit (y/n) • If subrecipient had CSLFRF findings (y/n) • Concerns with CSLFRF findings • Date single audit is received from subrecipient or obtained from the federal audit clearing house • Single Audit Report period (period covered by the single audit) • Whether the state agency received a copy of the required audit from the subrecipient within 9 months of the subrecipient's fiscal year end • Dates of follow-ups made to the subrecipient requesting single audits • Notes to document additional information such as delays in audit reports • Whether the state agency issued a management decision on audit findings within 6 months after receipt of the subrecipient's audit report • Whether the state agency ensured that subrecipients took appropriate and timely corrective action on all CSLFRF audit findings Views of Responsible Official(s) Contact Person: OMES: Parker Wise 619: Sara Librandi, Kami Fullingim 340: Diane Brown, Danielle Smith, Tracey Douglas 830: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: State agency 830 states “a process is already in place through the Office of Inspector General (OIG) to identify subrecipients exceeding the $750,000 threshold”; however, subrecipients with expenditures below the threshold must also be tracked to ensure total federal expenditures from all federal awards obtain a Single Audit. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited”. Therefore, state agency 830 acting as the pass-through entity must verify every subrecipient is audited. In addition, contractual language requiring the subrecipient submit a single audit if the threshold is met does not release the passthrough entity of ensuring the subrecipient’s total federal expenditures are tracked. We have encountered instances where subrecipients fail to provide single audits to pass-through entities; therefore, increasing the chances of the passthrough entity not issuing a management decision for applicable audit findings pertaining only to the federal award provided.
FINDING NO: 2023-014 STATE AGENCY: State of Oklahoma FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition and Context: The State of Oklahoma transferred all CSLFRF funds (except for administrative funds used by OMES-Grants Management Office (GMO) and the Legislative Service Bureau) to state agencies for them to execute projects they are charged with administering. The Oklahoma State Department of Health (agency #340), Health Care Workforce Training Commission (agency #619), and Department of Human Services (agency #830) had the material subrecipient monitoring activity for SFY 2023. These three state agencies notified their subrecipients of $750,000 federal expenditure threshold requiring a Single Audit per 2 CFR § 200.501 - Audit Requirements; however, they failed to track subrecipients that expended federal expenditures for CSLFRF, or in combination with other federal programs, to ensure that every subrecipient expending over $750,000 obtained a Single Audit. Cause: State agencies 340, 619, and 830 did not have sufficient processes or internal controls in place to ensure subrecipient Single Audits were tracked in accordance with 2 CFR § 200.332(d) and (f). Effect: State agencies 340, 619, and 830 may not be aware of potential subrecipient Single Audits with noncompliance issues related to the CSLFRF program. In addition, the agencies may fail to ensure that the subrecipient took appropriate corrective action on findings within the required timeframe. Recommendation: We recommend state agencies 340, 619, and 830 develop policies and procedures and internal controls to ensure that all CSLFRF subrecipients are tracked to determine if the subrecipient had $750,000 in total federal expenditures for the year. In addition, we recommend state agencies utilize a track sheet that documents the following: • Subrecipient SFY CSLFRF expenditures • If subrecipient is subject to single audit (y/n) • If subrecipient had CSLFRF findings (y/n) • Concerns with CSLFRF findings • Date single audit is received from subrecipient or obtained from the federal audit clearing house • Single Audit Report period (period covered by the single audit) • Whether the state agency received a copy of the required audit from the subrecipient within 9 months of the subrecipient's fiscal year end • Dates of follow-ups made to the subrecipient requesting single audits • Notes to document additional information such as delays in audit reports • Whether the state agency issued a management decision on audit findings within 6 months after receipt of the subrecipient's audit report • Whether the state agency ensured that subrecipients took appropriate and timely corrective action on all CSLFRF audit findings Views of Responsible Official(s) Contact Person: OMES: Parker Wise 619: Sara Librandi, Kami Fullingim 340: Diane Brown, Danielle Smith, Tracey Douglas 830: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: State agency 830 states “a process is already in place through the Office of Inspector General (OIG) to identify subrecipients exceeding the $750,000 threshold”; however, subrecipients with expenditures below the threshold must also be tracked to ensure total federal expenditures from all federal awards obtain a Single Audit. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited”. Therefore, state agency 830 acting as the pass-through entity must verify every subrecipient is audited. In addition, contractual language requiring the subrecipient submit a single audit if the threshold is met does not release the passthrough entity of ensuring the subrecipient’s total federal expenditures are tracked. We have encountered instances where subrecipients fail to provide single audits to pass-through entities; therefore, increasing the chances of the passthrough entity not issuing a management decision for applicable audit findings pertaining only to the federal award provided.
FINDING NO: 2023-014 STATE AGENCY: State of Oklahoma FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition and Context: The State of Oklahoma transferred all CSLFRF funds (except for administrative funds used by OMES-Grants Management Office (GMO) and the Legislative Service Bureau) to state agencies for them to execute projects they are charged with administering. The Oklahoma State Department of Health (agency #340), Health Care Workforce Training Commission (agency #619), and Department of Human Services (agency #830) had the material subrecipient monitoring activity for SFY 2023. These three state agencies notified their subrecipients of $750,000 federal expenditure threshold requiring a Single Audit per 2 CFR § 200.501 - Audit Requirements; however, they failed to track subrecipients that expended federal expenditures for CSLFRF, or in combination with other federal programs, to ensure that every subrecipient expending over $750,000 obtained a Single Audit. Cause: State agencies 340, 619, and 830 did not have sufficient processes or internal controls in place to ensure subrecipient Single Audits were tracked in accordance with 2 CFR § 200.332(d) and (f). Effect: State agencies 340, 619, and 830 may not be aware of potential subrecipient Single Audits with noncompliance issues related to the CSLFRF program. In addition, the agencies may fail to ensure that the subrecipient took appropriate corrective action on findings within the required timeframe. Recommendation: We recommend state agencies 340, 619, and 830 develop policies and procedures and internal controls to ensure that all CSLFRF subrecipients are tracked to determine if the subrecipient had $750,000 in total federal expenditures for the year. In addition, we recommend state agencies utilize a track sheet that documents the following: • Subrecipient SFY CSLFRF expenditures • If subrecipient is subject to single audit (y/n) • If subrecipient had CSLFRF findings (y/n) • Concerns with CSLFRF findings • Date single audit is received from subrecipient or obtained from the federal audit clearing house • Single Audit Report period (period covered by the single audit) • Whether the state agency received a copy of the required audit from the subrecipient within 9 months of the subrecipient's fiscal year end • Dates of follow-ups made to the subrecipient requesting single audits • Notes to document additional information such as delays in audit reports • Whether the state agency issued a management decision on audit findings within 6 months after receipt of the subrecipient's audit report • Whether the state agency ensured that subrecipients took appropriate and timely corrective action on all CSLFRF audit findings Views of Responsible Official(s) Contact Person: OMES: Parker Wise 619: Sara Librandi, Kami Fullingim 340: Diane Brown, Danielle Smith, Tracey Douglas 830: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: State agency 830 states “a process is already in place through the Office of Inspector General (OIG) to identify subrecipients exceeding the $750,000 threshold”; however, subrecipients with expenditures below the threshold must also be tracked to ensure total federal expenditures from all federal awards obtain a Single Audit. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited”. Therefore, state agency 830 acting as the pass-through entity must verify every subrecipient is audited. In addition, contractual language requiring the subrecipient submit a single audit if the threshold is met does not release the passthrough entity of ensuring the subrecipient’s total federal expenditures are tracked. We have encountered instances where subrecipients fail to provide single audits to pass-through entities; therefore, increasing the chances of the passthrough entity not issuing a management decision for applicable audit findings pertaining only to the federal award provided.
FINDING NO: 2023-014 STATE AGENCY: State of Oklahoma FEDERAL AGENCY: U.S. Department of the Treasury ALN: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) FEDERAL AWARD NUMBER: N/A FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.332(d) – Requirements for Pass-through Entities states in part, “All pass-through entities must: … (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the passthrough entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501.” Condition and Context: The State of Oklahoma transferred all CSLFRF funds (except for administrative funds used by OMES-Grants Management Office (GMO) and the Legislative Service Bureau) to state agencies for them to execute projects they are charged with administering. The Oklahoma State Department of Health (agency #340), Health Care Workforce Training Commission (agency #619), and Department of Human Services (agency #830) had the material subrecipient monitoring activity for SFY 2023. These three state agencies notified their subrecipients of $750,000 federal expenditure threshold requiring a Single Audit per 2 CFR § 200.501 - Audit Requirements; however, they failed to track subrecipients that expended federal expenditures for CSLFRF, or in combination with other federal programs, to ensure that every subrecipient expending over $750,000 obtained a Single Audit. Cause: State agencies 340, 619, and 830 did not have sufficient processes or internal controls in place to ensure subrecipient Single Audits were tracked in accordance with 2 CFR § 200.332(d) and (f). Effect: State agencies 340, 619, and 830 may not be aware of potential subrecipient Single Audits with noncompliance issues related to the CSLFRF program. In addition, the agencies may fail to ensure that the subrecipient took appropriate corrective action on findings within the required timeframe. Recommendation: We recommend state agencies 340, 619, and 830 develop policies and procedures and internal controls to ensure that all CSLFRF subrecipients are tracked to determine if the subrecipient had $750,000 in total federal expenditures for the year. In addition, we recommend state agencies utilize a track sheet that documents the following: • Subrecipient SFY CSLFRF expenditures • If subrecipient is subject to single audit (y/n) • If subrecipient had CSLFRF findings (y/n) • Concerns with CSLFRF findings • Date single audit is received from subrecipient or obtained from the federal audit clearing house • Single Audit Report period (period covered by the single audit) • Whether the state agency received a copy of the required audit from the subrecipient within 9 months of the subrecipient's fiscal year end • Dates of follow-ups made to the subrecipient requesting single audits • Notes to document additional information such as delays in audit reports • Whether the state agency issued a management decision on audit findings within 6 months after receipt of the subrecipient's audit report • Whether the state agency ensured that subrecipients took appropriate and timely corrective action on all CSLFRF audit findings Views of Responsible Official(s) Contact Person: OMES: Parker Wise 619: Sara Librandi, Kami Fullingim 340: Diane Brown, Danielle Smith, Tracey Douglas 830: Jaretta Murphy, Lindsey Kanaly, Danielle Durkee, Katey Campbell Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Office of Management Enterprise Services – Grants Management Office partially agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report. Auditor Response: State agency 830 states “a process is already in place through the Office of Inspector General (OIG) to identify subrecipients exceeding the $750,000 threshold”; however, subrecipients with expenditures below the threshold must also be tracked to ensure total federal expenditures from all federal awards obtain a Single Audit. 2 CFR 200.332 states in part, “All pass-through entities must: … (f) Verify that every subrecipient is audited”. Therefore, state agency 830 acting as the pass-through entity must verify every subrecipient is audited. In addition, contractual language requiring the subrecipient submit a single audit if the threshold is met does not release the passthrough entity of ensuring the subrecipient’s total federal expenditures are tracked. We have encountered instances where subrecipients fail to provide single audits to pass-through entities; therefore, increasing the chances of the passthrough entity not issuing a management decision for applicable audit findings pertaining only to the federal award provided.