REPORT DIGEST

STATE OF ILLINOIS STATEWIDE SINGLE AUDIT
REPORT

SINGLE AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  December 21, 2023

FINDINGS THIS AUDIT: 34

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  16 -- 15 -- 31
Category 2:  2 -- 1 -- 3
Category 3:  0 -- 0 -- 0
TOTAL:  18 – 16 -- 34

FINDINGS LAST AUDIT: 40

Category 1: Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State laws
and regulations (material noncompliance).
Category 2: Findings that are significant
deficiencies in internal control and
noncompliance with State laws and
regulations.
Category 3: Findings that have no internal
control issues but are in noncompliance with
State laws and regulations.

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, Iles Park
Plaza, 740 E. Ash Street, Springfield, IL
62703
(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

SYNOPSIS

• The State expended approximately $51.2
billion from federal awards in FY22.

• A total of 22 programs or program clusters
were classified and audited as major
programs at 18 State agencies.  These
programs constituted approximately 86.8% of
all federal spending, or about $44.4
billion.  In addition, 45 State agencies
expended federal financial assistance in
FY22.  Twelve State agencies accounted for
about 98.1% of federal dollars spent.

Statewide Finding – Financial Reporting

• The State of Illinois does not have an
adequate process in place to permit the
timely and accurate completion of the
Schedule of Expenditures of Federal Awards.
As a result, the State has a material
weakness on all federal programs for
financial reporting.

Auditor’s Disclaimer of Opinion on a Major
Program

• The Illinois Student Assistance
Commission:
• Was unable to implement all required
elements of the Dear Colleague Letter
GEN-21-03 for loans serviced under the
Federal Family Education Loans – Guaranty
Agencies (FFEL) program due to system
limitations.

Auditor’s Adverse Opinion on Major Program

• The Department of Revenue:
• Passed through most of the advance drawn
funds to its subrecipient while reporting no
activity had occurred for the COVID-19 –
Homeowner Assistance Fund (HAF) program in
the special report prepared during fiscal
year 2022.
• The Department of Human Services:
• Did not perform a risk assessment or
subrecipient monitoring procedures for the
subrecipient of the HAF program for the year
ended June 30, 2022.

Significant Agency Findings Classified as
Material Noncompliance Resulting in an
Auditor Qualification

• The Department of Human Services:
• Could not locate case file documentation
supporting eligibility determinations and
special test requirements for beneficiaries
of the SNAP Cluster and/or Temporary
Assistance for Needy Families (TANF)
program.
• Was unable to provide adequate
documentation to substantiate the
maintenance of effort (MOE) requirements
were met for the Block Grants for Prevention
and Treatment of Substance Abuse (SAPT)
program for award year 2020 that closed
during State fiscal year 2022.
• Did not follow its established program
monitoring policies and procedures for
subrecipients of the TANF, CCDF Cluster, and
SAPT programs.
• Did not obtain the required certifications
at the time of application for certain
providers of the CCDF Cluster receiving
American Rescue Plan (ARP) Act stabilization
funds.
• The Department of Healthcare and Family
Services:
• Did not perform periodic audits of the
accuracy, truthfulness, and completeness of
the encounter and financial data submitted
by, or on behalf of, each Managed Care
Organization (MCO) for the Children’s Health
Insurance Program (CHIP) and Medicaid
Cluster programs.
• Did not report certain Medicaid Cluster
program expenditures on quarterly federal
financial (CMS-64) reports in a timely
manner.
• Improperly continued providing benefits
under the CHIP program to individuals who
were over the age of 19 prior to the start
of the Public Health Emergency on March 13,
2020.
• The Department of Employment Security:
• Did not implement Federal requirements to
improve program integrity and reduce
overpayments.
• The Department on Aging:
• Did not adequately document review over
single audit reports received from its
subrecipients for the Aging Cluster program
on a timely basis.
• The Department of Corrections:
• Charged subrecipient expenditures to the
Coronavirus Relief Fund (CRF) program which
were incurred prior to the period of
performance.


In addition, the Department of Human
Services, the Department of Public Health,
the Illinois Criminal Justice Information
Authority, the Department of Transportation,
and the Department on Aging failed to report
information required by the Federal Funding
Accountability and Transparency Act (FFATA)
for awards granted to subrecipients of
various programs.

? INTRODUCTION

The Illinois Office of the Auditor General
conducted a Statewide Single Audit of the
FY22 federal grant programs.  The audit was
conducted in accordance with the Uniform
Guidance (Title 2 U.S. Code of Federal
Regulation Part 200, Uniform Administration
Requirements, Cost Principles, and Audit
Requirements for Federal Awards).

The Statewide Single Audit includes State
agencies that are a part of the primary
government and expend federal awards.  In
total, 45 State agencies expended federal
financial assistance in FY22.  A separate
supplemental report has been compiled by the
Governor’s Office of Management and Budget
and provides summary information on federal
spending by State agency.  The Statewide
Single Audit does not include those agencies
that are defined as component units such as
the State universities and finance
authorities.  The component units continue
to have separate single audits when
required.

The Schedule of Expenditures of Federal
Awards (SEFA) reflects total expenditures of
approximately $51.2 billion for the year
ended June 30, 2022.  Overall, the State
participated in 315 different federal
programs; however, 10 of these programs or
program clusters accounted for approximately
85.3% of the total federal award
expenditures.  (Please see Exhibit I in the
PDF digest)

The funding for the 315 programs was
provided by 25 different federal agencies.
Exhibit II shows that five federal agencies
provided Illinois with the vast majority of
federal funding in FY22. (Please see Exhibit
II in the PDF digest)

A total of 22 federal programs or program
clusters were identified as major programs
in FY22.  A major program was defined in
accordance with the Uniform Guidance as any
program with federal awards expended that
meets certain criteria when applying the
risk-based approach.  Exhibit III provides a
brief summary of the number of programs
classified as “major” and “non-major” and
related federal award expenditures. (Please
see Exhibit III in the PDF digest)

Twelve State agencies accounted for
approximately 98.1% of all federal dollars
spent during FY22 as depicted in Exhibit IV.
(Please see Exhibit IV in the PDF digest)

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE
FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON
INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
THE UNIFORM GUIDANCE

The auditors’ report contained a disclaimer
of opinion, an adverse opinion, and
qualifications on compliance as summarized
below.  The complete text of the Auditors’
Report may be found on pages 17-23 of the
audit.

Disclaimer of Opinion

The auditors were unable to express an
opinion on compliance for the following
major program:

State Administering Agency: IL Student
Assistance Commission
Federal Program: Federal Family Education
Loans – Guaranty Agencies
Compliance Requirement(s): Reporting and
Special Tests and Provisions
Finding Number: 2022-002
Page Numbers: 29-31

Adverse Opinion

The auditors expressed an adverse opinion on
compliance for the following major program:

State Administering Agency: IL Department of
Revenue
Federal Program: COVID-19 – Homeowner
Assistance Fund
Compliance Requirement(s): Cash Management
Finding Number: 2022-003
Page Numbers: 32-33

State Administering Agency: IL Department of
Human Services
Federal Program: COVID-19 – Homeowner
Assistance Fund
Compliance Requirement(s): Subrecipient
Monitoring
Finding Number: 2022-004
Page Numbers: 34-35

Qualifications

The auditors qualified their report on major
programs for the following noncompliance
findings:
(Please see 21 entries in chart on in PDF
digest)

Internal Control Over Financial Reporting

We noted a matter involving internal control
over financial reporting for the Schedule of
Expenditures of Federal Awards (Schedule)
that was considered to be a material
weakness.  A material weakness is a
deficiency, or combination of deficiencies,
in internal control over financial
reporting, such that there is a reasonable
possibility that a material misstatement of
the entity’s Schedule will not be prevented,
or detected and corrected on a timely basis.
The auditors recommended the Governor’s
Office of Management and Budget (GOMB) work
together with the State agencies to
establish a corrective action plan to
address the quality of accounting
information provided to the Illinois Office
of Comptroller (IOC) which is used by GOMB
to prepare the Schedule.

Internal Control Over Compliance

We noted certain matters involving internal
control over compliance that were considered
to be significant deficiencies.  A control
deficiency in an entity’s internal control
over compliance exists when the design or
operation of a control over compliance does
not allow management or employees, in the
normal course of performing their assigned
functions, to prevent, or detect and
correct, noncompliance with a type of
compliance requirement of a federal program
on a timely basis.  A significant deficiency
in internal control over compliance is a
deficiency, or combination of deficiencies,
in internal control over compliance with a
type of compliance requirement of a federal
program that is less severe than a material
weakness in internal control over
compliance, yet important enough to merit
attention by those charged with governance.
Overall, 3 of the 34 findings reported in
the single audit were classified as
compliance significant deficiencies.

Material weaknesses were also disclosed in
our report.  A material weakness in internal
control over compliance is a deficiency, or
combination of deficiencies, in internal
control over compliance, such that there is
a reasonable possibility that material
noncompliance with a type of compliance
requirement of a federal program will not be
prevented, or detected and corrected, on a
timely basis.  Overall, 31 of the 34
findings reported in the single audit were
classified as material weaknesses.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

Exhibit V summarizes the number of report
findings by State agency, identifies the
number of repeat findings, and references
the findings to specific pages in the
report. (Please see 13 entries on Exhibit V
in the PDF digest)

Exhibit VI summarizes the total number of
findings, number of repeated findings, and
the percentage of repeated findings for the
past ten years. (Please see 12 entries on
Exhibit VI in the PDF digest)

INADEQUATE PROCESS FOR COMPILING THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

We noted the State of Illinois’ current
financial reporting process does not allow
the State to prepare a complete and accurate
Schedule of Expenditures of Federal Awards
(SEFA) in a timely manner.  Reporting issues
at various individual agencies caused delays
in finalizing the Statewide SEFA.

The State of Illinois has a highly-
decentralized financial reporting process.
The system requires State agencies to
prepare financial reporting packages
designed by the Illinois Office of
Comptroller (IOC).  These financial
reporting packages are completed by
accounting personnel within each State
agency who have varying levels of knowledge,
experience, and understanding of IOC
accounting policies and procedures.  Agency
personnel involved with this process are not
under the organizational control or
jurisdiction of the IOC.

Although these financial reporting packages
are subject to review by the IOC’s financial
reporting staff during the Annual
Comprehensive Financial Report (ACFR)
preparation process and there are minimum
qualifications recommended for all new
generally accepted accounting principles
(GAAP) Coordinators who oversee the
preparation of financial reporting forms and
the Governor’s Office of Management and
Budget (GOMB) compiles the SEFA data and
performs certain supervisory review
procedures over the SEFA and evaluates
errors identified, the current process still
lacks sufficient internal controls to permit
timely and accurate reporting.  As a result,
late adjustments relative to the SEFA
continue to occur.

During fiscal year 2022, the State’s process
for compilation of the SEFA continued to be
performed on a timeline that does not permit
the State to meet the March 31st single
audit filing deadline.  The first official
draft of the SEFA was provided in December
2022 with several open items.  A number of
revised drafts were provided to update
missing information and to correct for
errors in information originally submitted
by State agencies to the IOC.  Specifically,
we identified the following errors:

• On July 31, 2023, GOMB provided a revised
draft SEFA which included approximately $500
million of Medicaid expenditures which had
not previously been reported and were
required to be subjected to audit
procedures.

• On November 21, 2023, GOMB provide a
revised draft SEFA which removed
approximately $228 million of expenditures
originally reported under the Coronavirus
Relief Fund (CRF) program.  The expenditures
were incorrectly reported under the CRF
program as they were already reported under
separate federal programs.

The final SEFA and related notes were not
finalized by the State until November 2023.
(Finding No. 2022-001, pages 27-28)

GOMB accepted our recommendation.

INABILITY TO IMPLEMENT DEAR COLLEAGUE LETTER

The Illinois Student Assistance Commission
(ISAC) was unable to implement all required
elements of the Dear Colleague Letter
GEN-21-03 for loans serviced under the
Federal Family Education Loans – Guaranty
Agencies (FFEL) program due to system
limitations.

On May 12, 2021, the U.S. Department of
Education (USDE) issued Dear Colleague
Letter (DCL) GEN-21-03, with an update on
May 24, 2021, titled “Expansion of
Collections Pause to Defaulted FFEL Program
Loans Managed by Guaranty Agencies.”  The
purpose of DCL GEN-21-03 was to help
borrowers burdened by debt during the
COVID-19 emergency, and it had a significant
impact on guaranty agency operations,
including the following:

• Interest was required to be retroactively
reduced to zero percent back to March 13,
2020 through May 1, 2022.

• Guaranty agencies were not allowed to
charge and retain collection cost for loan
rehabilitation, and for those
rehabilitations which occurred during the
period, the guarantor was required to make
adjustments on the account before it was
transferred to the new holder for interest
and collection costs charged.

• Guaranty agencies were allowed to charge
2.8% collection cost to borrowers for
consolidation loans, which represented a
change from 18.5%, and any previous charges
were required to be refunded to the Direct
Loan consolidating servicer to adjust the
borrower accounts.

• Guaranty agencies were required to make
adjustments to interest and involuntary
payments to loans which defaulted on/after
March 13, 2020; these loans were required to
be transferred to USDE under Special
Mandatory Assignment.

• Guaranty agencies may transfer funds from
the Federal Fund to the Operating Fund
without prior permission from USDE to
reimburse themselves for lost revenue and to
make refunds to borrowers.  Guaranty
agencies who received additional funds from
USDE were required to report that activity
on their Annual Report.

As a direct result of the requirements
established upon issuance of the DCL
GEN-21-03, on July 29, 2021, ISAC notified
USDE of its request to terminate its
operations as a guaranty agency of the FFEL
program.  On September 22, 2021, USDE
approved ISAC’s request for termination as a
guaranty agency of FFEL, and also informed
ISAC of its decision to designate an
unrelated third party to act as the
guarantor for the State of Illinois.
Effective May 1, 2022, the FFEL loan
portfolio was transitioned to the third
party loan servicer.

Although the loan portfolio was transitioned
to a third party to act as guaranty agency,
ISAC was responsible to service the
outstanding FFEL loan portfolio and maintain
compliance with USDE requirements through
the May 1, 2022 transition date.  Through
discussions with ISAC officials, given the
limitations of its legacy guaranty system,
ISAC was unable to set interest rates for
outstanding loans to 0% as required by the
DCL.

Further, given the loan portfolio was
transferred to the third party servicer on
May 1, 2022, we were unable to test ISAC’s
compliance with requirements that are direct
and material to the FFEL program.  (Finding
No. 2022-002, pages 29-31)

As a result of ISAC’s inability to implement
the DCL due to system limitations, the State
did not comply in all material respects with
specific compliance requirements.  Due to
this inability, the auditors were unable to
render an opinion on the Federal Family
Education Loans – Guaranty Agencies program.

We recommended ISAC work with USDE to
finalize closeout of the FFEL program.

ISAC accepted our recommendation and pointed
to corrective action already taken in
transitioning the portfolio to a third party
servicer.

FAILURE TO MONITOR SUBRECIPIENT CASH DRAWS
AND FAILURE TO ESTBLISH SUBRECIPIENT
MONITORING PROCEDURES

We noted the Illinois Department of Revenue
(IDOR) passed through most of the advance
drawn funds to its subrecipient while
reporting no activity had occurred for the
COVID-19 – Homeowner Assistance Fund (HAF)
program in the special report prepared
during fiscal year 2022.  We noted the State
receive $211,309,688 of COVID-19 – HAF
program funding from the U.S. Treasury in
January 2022.  At the time of the January
2022 cash receipt, we noted IDOR had passed
through $32,886,765 to the Illinois Housing
Development Authority (IHDA), a component
unit of the State who works directly with
program beneficiaries.  During our review of
subrecipient payments (totaling
$209,795,189) made to IHDA during the year
ended June 30, 2022, we noted IHDA had only
reported expenditures of $6,901,019 during
the year ended June 30, 2022.  Accordingly,
IDOR had provided HAF program advances
totaling $202,894,170 during the year ended
June 30, 2022.  IDOR did not have procedures
in place to monitor whether IHDA had
incurred or would be incurring program
expenditures to minimize federal cash on
hand.  (Finding No. 2022-003, pages 32-33)

In addition, we noted DHS did not perform a
risk assessment or subrecipient monitoring
procedures for IHDA as subrecipient of the
COVID-19 – HAF program for the year ended
June 30, 2022.  The State designated DHS as
the State agency responsible for monitoring
of IHDA as subrecipient of the COVID-19 –
HAF program, and as a pass-through entity,
DHS was responsible for:

• Identifying the award and applicable
requirements,

• Evaluating IHDA’s risk of noncompliance
for purposes of determining the appropriate
monitoring procedures related to the
subaward,

• Monitoring the activities of IHDA as
necessary to ensure the subaward is used for
authorized purposes, IHDA complies with the
terms and conditions of the subaward, and
IHDA achieves performance goals, and

• Issuing a management decision for audit
findings pertaining to the federal award
provided to IHDA, if applicable.

During our testing, we noted DHS did not
perform any subrecipient monitoring
procedures over IHDA with respect to the HAF
program during the year ended June 30, 2022.
Amounts passed through to IHDA totaled
$209,795,189 for the year ended June 30,
2022.  (Finding No. 2022-004, pages 34-35)

As a result of the failures described above,
the State did not comply in all material
respects with specific compliance
requirements.  Due to these matters, the
auditors rendered an adverse opinion on the
COVID-19 – HAF program.

We recommended IDOR implement procedures to
monitor subrecipients to ensure funds are
requested only for expenditures which have
been incurred or will be incurred within a
reasonable time period to minimize federal
cash on hand.  We also recommended DHS
implement subrecipient monitoring procedures
in accordance with federal regulations.

IDOR and DHS accepted our recommendations.

DEPARTMENT OF HUMAN SERVICES (DHS)

We noted DHS, as the administering State
agency, did not materially comply with
specific compliance requirements described
on p. 19-20 of the Single Audit Report.

Specifically, we noted the following:

• DHS could not locate case file
documentation supporting eligibility
determinations and special test requirements
for beneficiaries of the SNAP Cluster and/or
Temporary Assistance for Needy Families
(TANF) program.  Similar findings on this
issue have been reported since 2001.
(Finding No. 2022-005, pages 36-38)

• DHS was unable to provide adequate
documentation to substantiate the
maintenance of effort (MOE) requirements
were met for the Block Grants for Prevention
and Treatment of Substance Abuse (SAPT)
program for award year 2020 which closed
during State fiscal year 2022.  Similar
findings on this issue have been reported
since 2014.  (Finding No. 2022-006, pages
39-40)

• DHS did not follow its established program
monitoring policies and procedures for
subrecipients of the TANF Cluster, CCDF
Cluster, and SAPT programs.  In addition,
DHS did not provide timely notification
(within 60 days) of the results of the
programmatic on-site reviews, and DHS did
not complete their quality review on a
timely basis (within 60 days).  Lastly, for
1 of 28 SAPT subrecipient expenditures
sampled, DHS could not provide supporting
documentation that reconcile to the sampled
amount.  Similar findings on this issue have
been reported since 2011.  (Finding No.
2022-008, pages 44-46)

• DHS did not obtain the required
certifications at the time of application
for certain providers of the CCF Cluster
receiving American Rescue Plan (ARP) Act
stabilization funds.  During our test work
over 40 child care providers receiving ARP
Act stabilization funds (totaling
$545,843,265), we noted DHS could not
provide the require certifications for ARP
Act stabilization funds for 39 providers who
were noted as “license exempt” providers by
DHS.  (Finding No. 2022-009, pages 47-48)

The material noncompliance noted resulted in
modified opinions on compliance for the SNAP
Cluster, TANF, SAPT, and CCDF Cluster
programs.  DHS accepted our recommendations.

DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES
(DHFS)

We noted DHFS, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 20 of the Single Audit Report.

Specifically, we noted the following:

• DHFS did not perform periodic audits of
the accuracy, truthfulness, and completeness
of the encounter and financial data
submitted by, or on behalf of, each Managed
Care Organization (MCO) for the Children’s
Health Insurance Program (CHIP) and Medicaid
Cluster programs.  Additionally, we noted
DHFS had not established internal control
procedures to ensure the encounter data
audits are performed and posted as require.
(Finding No. 2022-013, pages 56-57)

• DHFS did not report certain Medicaid
Cluster program expenditures on quarterly
federal financial (CMS-64) reports in a
timely manner.  DHFS is the State Medicaid
agency and is responsible for determining
whether payments made to providers were for
permissible services on behalf of eligible
beneficiaries.  The Illinois Department of
Human Services (DHS) is responsible for
determining the eligibility of certain
Medicaid Cluster beneficiaries and for
administering certain Medicaid waiver
programs, including certain Home and
Community Base Services provided by the
State.  In January 2023, DHFS and DHS
discovered expenditures under the Home and
Community Based Services waiver program
operated by DHS had not been claimed since
January 1, 2021.  As a result, DHFS had not
reported expenditures totaling $508,822,205
paid by the State during the year ended June
30, 2022 on any of the quarterly reports
filed for this period.  On July 28, 2023,
the State provide a revise Schedule of
Expenditures of Federal Awards (SEFA) for
the year ended June 30, 2022 which include a
correction to add the previously unreported
$508,822,205 of Medicaid Cluster Home and
Community Base Services expenditures.  The
addition of these expenditures delayed the
completion of the State’s single audit.
(Finding No. 14, pages 58-60)

• DHFS improperly continued providing
benefits under the Children’s Health
Insurance Program (CHIP) program to
individuals who were over the age of 19
prior to the start of the Public Health
Emergency (PHE) on March 13, 2020.  The CHIP
program provides benefits to children under
the age of 19 at an enhanced federal
participation (FFP) rate.  CHIP benefits
should be discontinued when a beneficiary
turns 19; however, if they meet all other
eligibility criteria, these beneficiaries
are allowed to transition to benefits under
the Medicaid Cluster program.  During our
testing of payments (totaling $351,494) made
on behalf of 60 CHIP beneficiaries, we
identified three beneficiaries (with sampled
medical payments of $3,246) who were over
the age of 19 on or before March 13, 2020
(the beginning of the PHE).  The total
medical payments made on behalf of these
three beneficiaries during the year ended
June 30, 2022, were $264,418.  DHFS
performed a review of medical payments made
during the year ended June 30, 2022 and
identified a total of 1,330 CHIP
beneficiaries who attained the age of 19
prior to the beginning of the PHE for whom
medical payments totaling $3,218,270 were
made during the year ended June 30, 2022.
We also noted DHFS had not established
adequate controls to identify and remove
individuals over the age of 19 (who did not
meet the eligibility requirements for the
CHIP program) prior to the PHE to determine
if they were eligible for the Medicaid
Cluster program.  (Finding No. 2022-016,
pages 63-64)

The material noncompliance noted resulted in
modified opinions on compliance for the CHIP
and Medicaid Cluster programs.  DHFS
accepted our recommendations.

DEPARTMENT OF EMPLOYMENT SECURITY (IDES)

We noted IDES, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 20 of the Single Audit Report.
Specifically, we noted IDES did not
implement Federal requirements to improve
program integrity and reduce overpayments.
The State is required to establish written
procedures for: (1) identifying
overpayments, (2) classifying overpayments
into categories based on the reason the
overpayment occurred (i.e. employer error,
non-response from employers, beneficiary
fraud, etc.), and (3) establishing
appropriate methods for following up on each
category of overpayment. In establishing
these procedures, the State is required to
enter into three agreements prior to
commending recoveries, including an
agreement to permit the State to offset
State unemployment insurance (UI) from
Federal UI overpayments, an agreement to
permit the State to recover overpayments
from benefits being administered by another
State, and an agreement to permit the State
to utilize the Treasury Offset Program to
recover overpayments that remain
uncollected.  During our testing, we noted
that while IDES has developed the written
procedures relative to overpayments and has
entered into the required agreements
described in the previous paragraph, the
written procedures did not address the
requirement to impose a monetary penalty on
fraud overpayments.  Additionally, we noted
the policies do not address the prohibition
of providing employers relief resulting from
an employer failing to provide timely or
adequate information.  Similar findings on
this issue have been reported since 2015.
(Finding No. 2022-025, pages 81-82)

We recommended IDES develop and implement
written procedures to improve UI program
integrity and reduce overpayments that
incorporate the required monetary penalty on
fraud overpayments and prohibit providing
relief to employers who fail to provide
timely and adequate responses to information
requests.

The material noncompliance noted resulted in
a modified opinion on compliance for the
Unemployment Insurance program.  IDES
accepted our recommendations.

DEPARTMENT ON AGING (IDOA)

We noted IDOA, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 20 of the Single Audit Report.
Specifically, we noted IDOA did not
adequately document review over single audit
reports received from its subrecipients for
the Aging Cluster program on a timely basis.
During our testing of a sample of single
audit desk review files for four
subrecipients (with expenditures of
$36,828,349 in the fiscal year), we noted
IDOA did not document the reconciliation of
the subrecipient SEFAs to IDOA records
within the State’s Grant Accountability and
Transparency Act (GATA) Audit Report Review
Management System (ARRMS) and did not issue
management decision letters to each
subrecipient as of the date of our testing
(June 2023).  (Finding No. 2022-031, pages
95-96)

We recommended IDOA establish procedures to
ensure subrecipient single audit reviews are
completed and documented in a timely manner.
Additionally, we recommended IDOA ensure
procedures will permit the issuance of
management decisions within required
timeframes.

The material noncompliance noted resulted in
a modified opinion on compliance for the
Aging Cluster program.  IDOA accepted our
recommendations.

DEPARTMENT OF CORRECTIONS (IDOC)

We noted IDOC, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 20 of the Single Audit Report.
Specifically, we noted IDOC charged
subrecipient expenditures to the Coronavirus
Relief Fund (CRF) program which were
incurred prior to the period of performance.
During our testing of 19 expenditures
(totaling $3,869,083) charged to the CRF
program during the year ended June 30, 2022,
we noted two expenditures for payments to
subrecipients (totaling $219,695) for which
the underlying expenditures submitted to the
IDOC for reimbursement pertained to
expenditures incurred by the subrecipient
prior to March 1, 2020.  As these
expenditures were incurred prior to the
beginning of the period of performance for
the CRF program, they are not allowable
costs.  Additionally, we noted seven CRF
expenditures (totaling $2,007,224) from the
19 tested that were not paid by the State
until after June 30, 2022, but were included
in the 2022 Schedule of Expenditures of
Federal Awards (SEFA).  As the State
prepares its SEFA using the cash basis of
accounting, these expenditures were
erroneously reported on the 2022 SEFA.
Further, in review of the expenditures
claimed under the CRF program by DOC, we
noted 69 expenditures (totaling $18,080,783)
that were not paid by the State until after
June 30, 2022.  The State’s 2022 SEFA was
not corrected for this error.  (Finding No.
2022-033, pages 99-101)

We recommended IDOC implement procedures to
properly review detail expenditures at the
appropriate level of precision to ensure
federal expenditures: (1) are within the
period of performance and (2) are reported
on the State’s SEFA in accordance with the
cash basis of accounting.

The material noncompliance noted resulted in
a modified opinion on compliance for the
COVID-19 – CRF program.  IDOC accepted our
recommendations.

FAILURE TO REPORT SUBAWARD INFORMATION
REQUIRED BY FFATA

The Illinois Department of Transportation
(IDOT), the Illinois Department of Public
Health (IDPH), the Illinois Criminal Justice
Information Authority (ICJIA), the Illinois
Department of Human Services (DHS), and the
Illinois Department on Aging (IDOA)
(collectively, the agencies) failed to
report information required by the Federal
Funding Accountability and Transparency Act
(FFATA) for awards granted to subrecipients
of multiple programs.

FFATA requires the State to report certain
identifying information related to awards
made to subrecipients in amounts greater
than or equal to $30,000.  Of the
information required to be reported, the
following key data elements are required to
be audited:

1.	Subawardee Name
2.	Subawardee DUNS number
3.	Amount of subaward
4.	Subaward obligation or action date
5.	Date of report submission
6.	Subaward number
7.	Subaward project description
8.	Subawardee names and compensation of
highly compensated officers

Failure to identify awards subject to FFATA
and to report subawards in accordance with
FFATA results in noncompliance with federal
requirements.  (Finding No. 2022-007, pages
41-43 ; Finding No. 2022-020, pages 71-72 ;
Finding No. 2022-022, pages 75-76 ; Finding
No. 2022-029, pages 91-92 ; Finding No.
2022-030, pages 93-94 )

The material noncompliance described above
resulted in modified opinions on the TANF,
CCDF Cluster, SAPT, COVID-19 – Epidemiology
and Laboratory Capacity for Infectious
Diseases, Crime Victim Assistance, COVID-19
– Airport Improvement Program, and Aging
Cluster programs.

We recommended the agencies establish
procedures to identify awards subject to
FFATA reporting requirements and report
required subaward information in accordance
with FFATA.

The agencies accepted our recommendations.

OTHER FINDINGS

The remaining findings pertain to other
compliance and internal control matters.  We
will follow up on the status of corrective
action on all findings in our next Statewide
Single Audit for the year ended June 30,
2023.

AUDITORS’ OPINION

The auditors stated the Schedule of
Expenditures of Federal Awards for the State
of Illinois as of and for the year ended
June 30, 2022, is presented fairly in all
material respects.

This single audit was conducted by the firm
of KPMG LLP.

Jane Clark
Division Director


This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:CMD