REPORT HIGHLIGHTS STATE’S BEP AND VBP PROGRAMS PERFORMANCE AUDIT Release Date: September 10, 2025 State of Illinois, Office of the Auditor General FRANK J. MAUTINO, AUDITOR GENERAL To obtain a copy of the Report contact: Office of the Auditor General, 400 West Monroe, Suite 306, Springfield, IL 62704-9849 (217) 782-6046 or TTY (888) 261-2887 This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov BACKGROUND: On February 20, 2024, the Legislative Audit Commission adopted Resolution Number 166 requiring a performance audit of both the State’s Business Enterprise Program, including the certification program for businesses owned by minorities, women, and persons with disabilities, and the State’s Veterans Business Program for FY22 and FY23. Auditors established the audit period as FY22-FY24. The Resolution contained six determinations. The Business Enterprise Program began in 1984 to encourage participation in the State’s procurement process as both prime contractors and subcontractors. State contracts that fall under the authority of the Commission on Equity and Inclusion include, but are not limited to: insurance, investment management, information technology, accounting, legal, and architectural and engineering. To be certified, vendors must provide proof that they are owned and controlled by one or more eligible individuals. The Business Enterprise Program (BEP) and Veterans Business Program (VBP) are administered by the Illinois Commission on Equity and Inclusion (CEI). State agency contracts with a contract value of $100,000 or greater are subject to BEP and VBP goals, unless exempted. The overall statewide goal increased to 30 percent effective January 1, 2022. Key Findings: (Full BEP/Full VBP – a certification conducted by CEI staff, which requires submission of numerous documents to verify a vendor’s status as owned and controlled by a minority, woman, person with a disability, or a veteran. BE BEP/FastTrack – Recognition Certifications which allow vendors certified by one of the partner entities to apply for BEP certification with scaled down documentation requirements.) • Auditors tested 65 vendor files, including 31 Full BEP/VBP files and 34 Recognition Certification files. Auditors, in most cases, agreed that there was adequate documentation to meet program qualifications; however, based upon available information, auditors could not determine if 3 of the 65 (5%) vendor files tested met the requirements to be qualified for the respective program. - One Full BEP vendor appeared to be owned by an ineligible owner. The most recent business tax returns provided at the time of certification (2020 and 2021) indicated the ineligible owner was the 100 percent shareholder. The vendor file was missing information, such as individual tax returns, and the certification analyst did not conduct a site visit or any other in-depth interview to assess ownership and control. - One Full VBP vendor was certified, but auditors could not find documentation to support that: 1) the business had a home office in Illinois; and 2) that the veteran was living in Illinois. - One BE BEP vendor file lacked evidence of certification by an approved certifying entity. • Auditors determined that the established certification procedures in place for Full BEP and Full VBP applicants are comprehensive and adequate to assure that businesses are legitimately qualified to participate in the programs; however, auditors encountered a lack of documentation suggesting that established procedures were not always followed. Auditors tested 25 Full BEP and 6 Full VBP and found deficiencies in the vendor files for 15 of the required documentation requirements. Nine of these documentation requirements were missing for just one or two vendors; however, 6 of the 15 documentation requirements were missing from multiple vendor files. • CEI was unable to provide all requested documents and dates due to a data migration and the inability to access files from the previous system. In addition to the missing documents, CEI was unable to provide various application and No Change Application processing dates, such as date submitted, date(s) of request(s) for information, and date the application was accepted and ready for a Certification Analyst to review. As a result, auditors were unable to calculate the timeliness of the application and No Change Application processes. • The FastTrack Recognition Certification entities do not have a cap on gross sales as a requirement for certification and allow for higher gross sales than what is allowed through CEI BEP certification. Auditors tested five FastTrack approved vendors and requested all related certification documents. The certification documents auditors received for these five vendors did not include any company income taxes. It is unclear how CEI was confirming and ensuring that the vendor’s gross annual sales did not exceed the gross sales maximum for program eligibility. • To determine whether certifications are periodically reviewed for continued program participation, auditors reviewed a total of 24 No Change Applications for Full BEP and Full VBP vendor files. Many of the No Change Applications contained all required documents; however, there were some documents missing: 3 out of 24 were missing the no change affidavit, and 9 out of 24 were missing business income taxes. • CEI officials noted that the list of contracts tracked during FY22-FY24 only included contracts with supplier diversity goals under the Chief Procurement Office for General Services, which does not include all construction and non-construction agencies, boards, commissions, public universities, and community colleges. It is difficult for CEI to monitor compliance with the required BEP goals if contracts from all purchasing entities subject to the BEP Act are not tracked. • CEI did not have a formalized training process in place for certification staff. Training files for two of six CEI certification staff lacked documentation to support that the staff received training specific to certification. One of these two certification staff was a new employee, and the training files lacked documentation of the training received during the onboarding process. • Certain policies and procedures were outdated and conflict with current statutory requirements. • The BEP Act requires the creation of a Special Committee on Minority, Female, Persons with Disabilities, and Veterans Contracting; however, this committee has not met since its inception (30 ILCS 575/8j). Key Recommendations: The audit report contains ten recommendations directed to the Illinois Commission on Equity and Inclusion including: • The Commission on Equity and Inclusion should ensure that all applicants certified through the Full BEP and Full VBP certification process meet the requirements for certification. The Commission should also improve its process to ensure it collects and retains all documents required for certification. • The Commission on Equity and Inclusion should ensure No Change Applications are submitted and contain all required documents to ensure vendors continue to be qualified for certification. • The Commission on Equity and Inclusion should work to gain access to the data and documents that are unavailable due to the data migration. Additionally, CEI should develop a procedure to ensure future data migrations do not result in data that is inaccessible. • The Commission on Equity and Inclusion should track contracts from all purchasing entities subject to the BEP Act to monitor compliance with the required goals. • The Commission on Equity and Inclusion should update its administrative rules, policies, and procedures to reflect current statutory requirements. • The Commission on Equity and Inclusion should develop a formalized training process for certification staff. • The Commission on Equity and Inclusion should meet with other certifying entities to help ensure BEP Council requirements and procedures are being met as required by the BEP Administrative Rules (44 Ill. Adm. Code 30.63). This performance audit was conducted by the staff of the Office of the Auditor General.