Human Resource Development Institute, Inc. and AffiliatesNon-Profit

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2024-002 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse 93.696 Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Federal Agency U.S. Department of Health and Human Services Passthrough Agency Illinois Department of Human Services Award Number/Year 2024 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grants for Community Mental Health Services Program, a sample of twenty-nine (29) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grants for Prevention and Treatment of Substance Abuse Program, a sample of thirty (30) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.696, Certified Community Behavioral Health Clinic (CCBHC) – Planning, Development, and Implementation Grants Program, a sample of forty-four (44) payroll expense and fringe benefits transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide sufficient evidence of review and approval of employee salaries and wages charged to these grants. We did note that the payroll and fringe benefit expense transactions tested matched the appropriate vouchers for reimbursement and related supporting documentation of payroll expense and fringe benefits. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures regarding documentation of the time sheets or time studies supporting the allocation of salaries and fringe benefits for each employee charged to grants. Additionally, there was no support in each employee file regarding a merit increase provided in December 2023 for all employees. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs None noted. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine (9) months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2023-01 Noncompliance with Federal and State Reporting Requirements Assistance Listing Numbers: 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse Federal Agency: U.S. Department of Health and Human Services Passthrough Agency: Illinois Department of Human Services Award Number/Year: 2023 Criteria Uniform Guidance requires that single audits be completed, and the reporting package submitted to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report or nine (9) months after the end of the audit period. Condition The Organization did not submit its audited financial statements and SEFA to the Federal Audit Clearinghouse website within nine (9) months of June 30, 2023. The Organization also didn’t submit its audited financial statements, SEFA, CYEFR and other required information to the GATA portal within six (6) months after June 30, 2023. This is a repeat finding (see Finding 2022-003 in the Summary of Prior Audit Findings). Cause This condition was due to the Organization being understaffed within its accounting and finance department resulting in a significant delay in completing the recording of financial transactions, performing account reconciliations and preparing financial reports available for 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 the Organization to delay providing funding for the current fiscal year. Questioned Costs None noted. Recommendation We recommend that management either 1) hire personnel within its accounting and finance department so that all defined tasks can be performed in a more timely manner or 2) evaluate its current processes to determine how to make them more efficient so that the current personnel within the accounting and finance department are able to complete their tasks in a more timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding 2023-02 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting Assistance Listing Numbers 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment Substance Abuse Federal Agency: U.S. Department of Health and Human Services Passthrough Agency: Illinois Department of Human Services Award Number/Year: 2023 Criteria The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grant for Community Mental Health Services, a sample of fourteen (14) expense transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grant for Prevention and Treatment of Substance Abuse, a sample of fourteen (14) expense transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide vendor invoices for any of the expense transactions selected for testing. We did note that the expense transaction details matched the appropriate vouchers for reimbursement and supporting documentation of vendor payment. It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties. Cause The Organization did not follow its established policies and procedures which resulted in new accounting and grant administration personnel not knowing where appropriate documentation was stored so that it could be readily available when required. Effect The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance. Questioned Costs See scope limitation. Repeat Finding Yes Recommendation We recommend that the Organization implement the following corrective actions: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • Require that all expenses have proper invoices with approvals and should be organized within the Organization’s office. • Require that vouchers have all related invoices attached to them and be reconciled with monthly, quarterly and close-out financial reports. • Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • Require that all vouchers and reports should be filed timely in accordance with the various grant agreements. • Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable. • Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

SECTION II - FINANCIAL STATEMENT FINDINGS Finding No. 2022-001: Financial Close Process and Account Reconciliations – Material Weakness in Internal Control Over Financial Reporting Criteria Human Resources Development, Inc. and Affiliates’ (HRDI) is responsible for keeping an accurate accounting of its financial information. Condition During the audit, there were several errors which were not discovered during the financial close process or review of the financial reports. Adjustments were needed to correctly reconcile beginning net assets to the prior year audit, to correct accounts payable and various accruals, to tie intercompany balances, to adjust the allowance, and to correct depreciation expense. This resulted in multiple adjustments proposed by Marcum and approved by HRDI’s management that took place between June 2023 and December 2023 to correct and reconcile the balances as of June 30, 2022. Cause HRDI did not follow its established policies and procedures which resulted in there being a lack of appropriate documentation for its financial reporting. This hindered HRDI’s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner, thus resulting in a delayed financial reporting audit in the current year. Effect This could lead to inaccurate financial information, on the basis of which HRDI’s decisions are made. In addition, it is not allowing HRDI to complete its financial reporting audit in a timely manner and by the due date required by the Uniform Guidance, which is nine months after HRDI’s year end. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed, reconciled and any required adjustments posted. We also recommend that HRDI implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that HRDI enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2022-002: Financial Close Process and Account Reconciliations – Material Weakness in Internal Control Over Financial Reporting U.S. Department of Housing and Urban Development, AL No. 14.267, Shelter Plus Care U.S. Department of Housing and Urban Development, AL No. 14.241, Housing Opportunities for Persons with AIDS Passed-through Alabama Department of Mental Health and Retardation, AL No. 93.778, Medicaid Cluster Medical Assistance Program The 2022-002 finding expands finding 2022-001 for the federal award program as it impacted the expenses charged to the federal awards above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for AL No. 14.267 were overstated by approximately $3,015 and the expenses reported on the SEFA for AL No. 14.241 were overstated by approximately $37,649. In addition, the expenses reported on the SEFA for AL No. 93.778 were overstated by approximately $456,701. Repeat Finding Yes Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

Finding No. 2022-003: Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting U.S. Department of Health and Human Services AL No. 93.958 Block Grant for Community Mental Health Services U.S. Department of Health and Human Services AL No. 93.959, Block Grant for Prevention and Treatment of Substance Abuse U.S. Department of Health and Human Services AL No. 21.027 Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Health and Human Services AL No. 93.778 Medicaid Cluster Medical Assistance Program. Criteria Human Resources Development, Inc. and Affiliates’ (HRDI) is responsible for keeping an accurate accounting and all of the required documentation in accordance with applicable federal regulations. Condition For AL No. 93.958, Block Grant for Community Mental Health Services, we chose a sample size of 40 payroll and 20 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted no instances where HRDI was able to provide support and approval for the current pay rate in an employees’ personnel file. HRDI was not able to provide an indication as to which grant the employees’ salary and fringe benefits should be charged for any of our selected sample. We noted two instances for which we did not receive a timecard. There were nine instances where the department on the timecard did not match the general ledger department. During our expense testing, HRDI was unable to provide approval for two expenses and was unable to provide neither an invoice nor an approval for one invoice. For Cash Management, we noted that all four of the vouchers tested did not have all of the proper documentation for reimbursement. We also noted that one person prepared, reviewed and submitted all vouchers. For Reporting, for our sample of two quarterly financial reports, we were unable to trace the quarterly financial reports to the underlying accounting records and noted one of the reports was not submitted timely. For our sample of four monthly reports, we were unable to trace the monthly financial reports to the underlying accounting records and noted one of the reports was not submitted timely. The reports were also prepared, reviewed and submitted by one individual. For AL No. 93.959, Substance Abuse Prevention and Treatment Block Grant, we chose a sample size of 42 payroll and 27 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted no instances where HRDI was able to provide support and approval for the current pay rate in an employees’ personnel file. We noted two instances for which we did not receive a timecard. HRDI was not able to provide an indication as to which grant the employees’ salary and fringe benefits should be charged for any of our selected sample. For Cash Management, we noted that one person prepared, reviewed and submitted the vouchers. For Reporting, we sampled three financial close-out reports. We noted that the reports did not equal the underlying accounting records and that the selected reports were prepared, reviewed and submitted by one individual. HRDI indicated that no financial reports were submitted quarterly and that they were not asked to provide any quarterly reports although there was a requirement in each of the three grant agreements. We tested six quarterly performance reports and noted that two were not submitted timely. All of the selected reports were also prepared, reviewed and submitted by one individual. HRDI indicated that no close-out performance reports were submitted and that they were not asked to provide any close-out performance reports although there was a requirement in each of the three grant agreements. For AL No. 93.778, Medicaid Cluster, we chose a sample size of 43 payroll and 17 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted no instances where HRDI was able to provide support and approval for the current pay rate in an employees’ personnel file. HRDI was not able to provide an indication as to which grant the employees’ salary and fringe benefits should be charged for any of our selected sample. During our expense testing, HRDI was unable to provide approval for three expenses and was unable to provide neither an invoice nor an approval for three invoices. During our expense testing, HRDI was unable to provide invoices for three selections. In addition, there was a duplicate payment. For Reporting, HRDI indicated that no statistical information reports were submitted and that they were not asked to provide any statistical information reports although there was a requirement in the grant agreement. For AL No. 21.027, Coronavirus State and Local Fiscal Recovery Funds, we chose a sample size of 24 payroll and 36 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles. During our payroll testing, we noted no instances where HRDI was able to provide support and approval for the current pay rate in an employees’ personnel file. HRDI was not able to provide an indication as to which grant the employees’ salary and fringe benefits should be charged for any of our selected sample. We noted three instances for which we did not receive a timecard. There were five instances where the department on the timecard did not match the general ledger department. For Reporting, we tested four quarterly financial reports and one financial close-out report. We noted none of the reports were submitted timely. We tested three quarterly performance reports and noted that two were not submitted timely. All of the selected reports were also prepared, reviewed and submitted by one individual. HRDI indicated that no close-out performance reports were submitted and that they were not asked to provide any close-out performance reports although there was a requirement in each of the two grant agreements. The data collection form for June 30, 2021 was not submitted timely in that it was submitted on June 29, 2023 when it was due March 31, 2022. There was no extension requested or granted for the late submission. Cause HRDI did not follow its established policies and procedures which resulted in there being a lack of appropriate documentation for its compliance with applicable federal regulations. Effect HRDI is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting requirements of the grant agreement and OMB Uniform Guidance. Questioned CostsSee scope limitation. SECTION III - FEDERAL AWARD FINDING AND QUESTIONED COSTS. Repeat Finding Yes Recommendation We recommend that HRDI implement the following: • Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. • All personnel files should have authorization and approval of current pay rates along with correspondence regarding to which grant an employees’ salary and fringe benefits should be expensed including any allocations if the employee worked on several grants. • All expenses should have proper invoices with approvals and that they be organized within HRDI’s office. • Vouchers should have all related invoices attached to them and be reconciled with the financial reporting. • All vouchers and reports should be prepared by one individual and reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials. • All vouchers and reports should be filed timely in accordance with the various grant agreements. • For reports that were not prepared despite their requirement in the respective grant agreements, we recommend that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary. • The data collection form should be filed the earlier of thirty days after the report date or no later than nine months after the fiscal year-end. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.

SECTION II - FINANCIAL STATEMENT FINDINGS Finding No. 2021-001: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial ReportingCriteriaHuman Resources Development, Inc. and Affiliates? (HRDI) is responsible for keeping an accurate accounting of its financial information.ConditionDuring the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correctly record income from the Paycheck Protection Program Loan, to correct accounts payable and various accruals, to correct depreciation expense, to correct various receivables, to record rent expense, to tie intercompany balances, to adjust the allowance for doubtful accounts, to record income from an investment and to restate beginning net assets. This resulted in multiple adjustments proposed by Marcum and HRDI?s management that took place between October 2021 and April 2023 to correct and reconcile the balances as of June 30, 2021.CauseHRDI did not follow its established policies and procedures which resulted in there being a lack of appropriate documentation for its financial reporting. This hindered HRDI?s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner, thus resulting in a delayed audit in the current year.EffectThis could lead to inaccurate financial information, on the basis of which HRDI?s decisions are made. In addition, it is not allowing HRDI to complete its audit in a timely manner and by the due date required by the Uniform Guidance, which is nine months after HRDI?s year end.RecommendationWe recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that were added during the year are properly classified. We also recommend that HRDI implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that HRDI enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained.Views of Responsible Officials and Planned Corrective ActionsSee corrective action plan.

Finding No. 2021-002: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial ReportingU.S. Department of Housing and Urban Development, CFDA No. 14.267, Shelter Plus CareU.S. Department of Housing and Urban Development, CFDA No. 14.241, Housing Opportunities for Persons with AIDSThe 2021-002 finding expands finding 2021-001 for the federal award program as it impacted the expenses charged to the federal awards above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 14.267 were overstated by approximately $30,997 and the expenses reported on the SEFA for CFDA 14.241 were overstated by approximately $103,475.

SECTION III - FEDERAL AWARD FINDING AND QUESTIONED COSTS Finding No. 2021-003: Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and ReportingU.S. Department of Health and Human Services, CFDA No. 93.958, Block Grant for Community Mental Health Services, CFDA No. 93.959, Block Grant for Prevention and Treatment of Substance Abuse, CFDA No. 93.779, Medicaid ClusterCriteriaHuman Resources Development, Inc. and Affiliates? (HRDI) is responsible for keeping an accurate accounting and all of the required documentation in accordance with applicable federal regulations.ConditionFor CFDA 93.958, Block Grant for Community Mental Health Services, we chose a sample size of 38 payroll and 22 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted five instances where HRDI was able to provide support and approval for the pay rate in an employees? personnel file. HRDI was not able to provide an indication as to which grant the employees? salary and fringe benefits should be charged for any of our selected sample. We noted eight months for which we were unable to verify a review and approval of the payroll journal entries. During our expense testing, HRDI was unable to provide approval for one expense. For Cash Management, we noted that two of our sample of four vouchers did not have all of the proper documentation for reimbursement. We noted that one person prepared, reviewed and submitted the report. For our sample of two quarterly financial reports, we were unable to trace the quarterly financial reports to the underlying accounting records. In addition, we were unable to verify that the two quarterly financial reports and the four performance reports were submitted timely to the respective agencies. The reports were also prepared, reviewed and submitted by one individual.For CFDA 93.959, Substance Abuse Prevention and Treatment Block Grant, we chose a sample size of 31 payroll and 29 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. During our payroll testing, we noted four instances where HRDI was able to provide support and approval for the pay rate in an employees? personnel file. We noted two instances where the time card we received did not match the employee?s pay stub. HRDI was not able to provide an indication as to which grant the employees? salary and fringe benefits should be charged for any of our selected sample. We noted eight months for which we were unable to verify a review and approval of the payroll journal entries. During our expense testing, HRDI was unable to provide invoices for five selections. There were three instances where we could not trace the expense to the bank statement. For Cash Management, we noted that two of our sample of four vouchers did not have all of the proper documentation for reimbursement and did not agree with the financial reports. We noted that one person prepared, reviewed and submitted the report. We sampled three close-out reports. One of the three reports was not submitted timely as the date on the report was past the due date. HRDI indicated that no financial reports were submitted quarterly and that they were not asked to provide any quarterly reports although there was a requirement in each of the three grant agreements. In addition, we were unable to verify that the other two close-out reports and our sample of six performance reports were submitted timely to the respective agencies. The reports were also prepared, reviewed and submitted by one individual.For CFDA 93.778, Medicaid Cluster, we chose a sample size of 34 payroll and 26 expense items to test for Activities Allowed or Unallowed, Allowable Costs/Cost Principles. During our payroll testing, we noted no instances where HRDI was able to provide support and approval for the pay rate in an employees? personnel file. HRDI was not able to provide an indication as to which grant the employees? salary and fringe benefits should be charged for any of our selected sample. We noted eight months for which we were unable to verify a review and approval of the payroll journal entries. During our expense testing, HRDI was unable to provide invoices for three selections. There were six instances where we could not trace the expense to the bank statement. HRDI indicated that no statistical information reports were submitted and that they were not asked to provide any statistical information reports although there was a requirement in the grant agreement.The data collection form for June 30, 2020 was not submitted timely in that it was submitted on April 12, 2021 when it was due March 31, 2021. There was no extension requested or granted for the late submission.CauseHRDI did not follow its established policies and procedures which resulted in there being a lack of appropriate documentation for its compliance with applicable federal regulations.EffectHRDI is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting requirements of the grant agreement and OMB Uniform Guidance.Questioned CostsSee scope limitation.Repeat FindingNoRecommendationWe recommend that HRDI enforce its current specific internal control procedures to ensure compliance with applicable federal regulations. We recommend that all personnel files have authorization and approval of pay rates along with correspondence regarding to which grant an employees? salary and fringe benefits should be expensed. We recommend that all expenses have proper invoices with approvals and that they be organized within HRDI?s office. We recommend that all vouchers have all related invoices attached to them and that the vouchers reconcile with the financial reporting. We recommend that all reports be prepared by one individual and reviewed and approved by a second individual prior to submission. For reports that were not prepared despite their requirement in the respective grant agreements, we recommend that correspondence be received from those agencies indicating that required reports per the written grant agreements is not necessary. We recommend that the data collection form be filed the earlier of thirty days after the report date or no later than nine months after the fiscal year-end.Views of Responsible Officials and Planned Corrective ActionsSee corrective action plan.SECTION IV - SUMMARY OF PRIOR YEAR FINDINGSNo findings were reported relating to the prior period financial statements.No single audit findings were reported relating to the prior year single audit.