Finding Text
Federal Agency: U.S. Environmental Protection Agency Program Name: Greenhouse Gas Reduction Fund: Solar For All ALN: 66.959 Award Numbers: 84090501, Federal Award Year 2024 - 2025 Questioned Costs: None 2025-001: Finding: Internal Controls over Allowable Costs/Activities The Illinois Finance Authority (Authority) had weaknesses in its internal controls over reviews of allowable costs and activities. Condition: Out of the 13 payroll transactions and 4 indirect cost transactions tested for allowable activities and costs, we were unable to obtain documentation to support that controls were in place to review for allowable activities and costs prior to applying to the grant for all (100%) of the transactions. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Cause: Authority officials indicated this issue was due to the size of the Authority, there was a lack of segregation of duties or documentation to support reviews. Effect: Without a proper internal control system to support reviews performed over allowable costs and activities, the Authority risks submitting unallowable costs, which could result in a loss of future funding. (Finding Code No. 2025-001) Recommendation: We recommend the Authority develop and document controls for ensuring expenditures applied to the grant are allowable. Authority’s Response: The Authority accepts single audit finding 2025-001 Internal Controls over Allowable Costs/Activities. The Authority has implemented a process and related internal controls and appropriate segregation of duties to ensure Authority financial transactions (i.e., expenditures applied to corresponding grants are allowable; month-end financial entries; etc.) are appropriately prepared, reviewed, authorized, and recorded.