Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - 38080710K, 2022 Pass-through Entity - Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations (COSO). Per 2 CFR 200.318(a), the non-Federal entity must have an use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §200.317 through §200.327. Per 2 CFR 200.318(h), the non-Federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, 2 CFR 200.214 restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition - Controls were not sufficient to ensure that management has written policies and procedures surrounding procurement that align with Federal Procurement Standards outlined within the Uniform Guidance. Further, controls were not adequate to ensure that the history of procurement decisions was documented. Additionally, controls were not sufficient to ensure checks for suspension and debarment were performed and documented before entering into a covered transaction with third parties. Questioned Costs - $3,000,000 If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - Questioned costs represent procured contractor activity reported on the SEFA not in compliance with Federal procurement standards. Context - Through review of management's various policies and procedures in place related to purchasing, we noted that management does not have policies and procedures in place that align with the federal procurements standards under §200.317 through §200.327 to ensure compliance with these standards. Further, while testing a sample of 2 contracts out of 3 vendors with activity on the SEFA, we noted no documented evidence of the history of procurement, rationale for the method of procurement used, selection of the contract type, basis for contract selection, analysis of cost or price, or checks for suspension and debarment. Cause and Effect - A lack of written policies and procedures has resulted in material noncompliance with federal procurement standards, including standards to ensure checks for suspension and debarment are performed before entering into a covered transaction with third parties. Recommendation - We recommend management implement written policies and procedures, as required by the Uniform Guidance, to ensure compliance with the federal procurement standards under §200.317 through §200.327 of the Uniform Guidance. We also recommend management implement a system of internal controls to ensure procurement decisions are documented, including checks for suspension and debarment to ensure compliance with §200.214. Views of Responsible Officials and Planned Corrective Actions - The Organization will update and formally adopt written procurement, suspension, and debarment policies and procedures to conform to Uniform Guidance requirements and implement procedures to ensure those policies are consistently followed and documented for all federally funded procurements.