Finding 972329 (2022-002)

Finding 2022-02 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency U.S. Department of Health and Human Services and U.S. Department of Treasury Section III - Findings and Questioned Costs Relating to Compliance Over Federal Awards (continued) Award Number/Year 2022 Criteria C4 has grant agreements from Federal agencies and State of Illinois agencies with terms requiring compliance with financial reporting requirements in accordance with Uniform Guidance and the State of Illinois Grant Accountability and Transparency Act (GATA). As such, for the year ended June 30, 2022, C4 is required to submit audited financial statements, a schedule of expenditures of federal awards (SEFA) and single audit reports to the Federal Audit Clearinghouse and the same audit package plus a Consolidated Year End Financial Report (CYEFR) to the GATA portal. All items are required to be submitted to the GATA portal within six (6) months after C4’s fiscal year-end and to the Federal Audit Clearinghouse within nine (9) months after C4’s fiscal year-end. Condition C4 did not submit its audited financial statements, SEFA and CYEFR and other required information to the Federal Audit Clearinghouse and GATA portal by the required due dates. Cause This condition was due to several factors including significant staff turnover during fiscal years 2021 and 2022 resulting in the accounting and finance function being understaffed. As such, there was a delay in completing the recording of year-end financial transactions, performing account reconciliations and preparing financial reports for fiscal year 2022 as needed for the audit. Effect The effect is that controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware. Additionally, noncompliance with financial reporting deadlines could cause funding sources for C4 to suspend funding until compliance is achieved.