Finding Text
Significant Deficiency Finding 2025-002 – Controls over Grant Reporting and Monitoring (Repeat Finding) Federal Agency: U.S. Department of Health and Human Services Pass-through Entity: Illinois Department on Aging Federal Program: Aging Cluster (Federal Assistance Listing No.’s 93.044, 93.045, 93.053) Requirement: Allowable Costs and Reporting Criteria: To ensure the correctness and completeness of the various required grant reporting performed by the Agency, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports and ensure the underlying costs in the financial records can be supported. It is also imperative to have monitoring procedures in place to ensure compliance with all grant requirements. Condition: During the course of our audit, we noted that the Agency implemented reconciliations between the general ledger and the grant reports. Management is using several worksheets to determine the grant report amounts, and it is evident that the Agency is allotting adequate time to prepare the grant reporting. However, the reconciliations performed by the Agency displayed discrepancies between the general ledger and the grant reports that were not resolved, specifically amounts that were passed through to subrecipients. Rather than utilizing the Agency’s general ledger to report expenses on grant reports, the Agency used subrecipients’ monthly financial reports that were submitted to the Agency to report expenses on the Agency’s grant reports. Additionally, various grant reporting requires input of duplicate information for certain line items, however, these reports contained different amounts for line items that should match. We also noted that a compliance review is not being performed to ensure adherence to all grant requirements. Cause: The Agency continues to improve in this area over prior years. A reconciliation process was implemented; however, discrepancies in reconciliations were noted. All reporting was not derived from general ledger expense accounts nor were reports reconciled to the general ledger expense accounts. There was no consistency in expenses that were being reported on multiple grant reports. Due to the volume of grant reports required to be submitted, the grant reporting process is difficult to maintain. We were also unable to obtain monitoring documentation, indicating that a formal process has not been developed to ensure grant compliance. Effect: Without timely reconciliation and monitoring processes, grant expenditures can be omitted or overstated on the submitted grant reports and other grant noncompliance could be overlooked. This could result in missed funding or noncompliance with the grant agreement which could lead to adverse conditions with the grantor. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic event as these conditions were noted on most of the grants that were tested. Recommendation: We recommend the Agency continue to improve its reconciliation process and further enhance reconciliations to ensure information can be cross-referenced between the various reports required to be submitted. Grant reporting should be performed using the general ledger expense accounts to ensure all expenses are captured. Reconciliations should be presented in a clear and concise manner to enable another party to review and approve the reports before submission to the grantor. This should be attainable as each grant is coded separately in the accounting system. We also recommend the Agency require a periodic review of adherence to the various grant compliance requirements and note that such a review was performed. Response: The Agency will improve its reconciliation and reporting procedures. All grant reports will be prepared using general ledger data and reviewed before submission. Monthly reconciliations and periodic compliance checks will be performed and documented. These actions are intended to improve accuracy, consistency, and compliance across all grants. Monthly check-ins for WCIAAA staff currently take place to help improve communication, monitoring, and oversight of all grant and fiscal reporting.