KANKAKEE COUNTY COMMUNITY SERVICES

Finding Number: 2024-001 Repeat Finding: Yes Type of Finding: Material Weakness in Internal Control over Financial Reporting Description: Internal Controls over Financial Reporting and Late Filing of Data Collection Form Condition: During the audit, Wipfli noted that not all accounts were consistently reconciled on a timely basis and there is no indication that adjusting journal entries are consistently reviewed by someone other than the preparer. Based on the lack of internal controls over account reconciliations and adjusting journal entries during 2024, a material weakness exists in Kankakee County Community Services, Inc.'s internal controls over financial reporting and the preparation of the financial statements in accordance with accounting principles generally accepted in the United States (GAAP). Due to the issues described above, the audit was delayed and as a result, the 2024 data collection form and audit reporting package was not submitted to the Federal Audit Clearinghouse in a timely manner. Criteria: Internal controls are effective if they are properly designed and implemented to prevent or detect account misstatements prior to the audit. The Report Submission that is codified in 2 CFR Part 200.512 requires the auditee must submit the applicable data elements of the data collection form to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Cause: The internal controls of the Organization were not effective in preventing or detecting misstatements in a timely manner. The 2024 audit was not completed prior to the due date. Effect: As a result of the financial reporting matter identified in the condition paragraph, a material weakness exists in the Organization's internal controls over financial reporting. The Organization was also not in compliance with audit submission requirements, resulting in a nonmaterial noncompliance. Recommendation: We recommend the Organization implement procedures, such as timely reconciling of accounts and review of all reconciliations and adjusting journal entries by someone other than the preparer, to provide sufficient internal control over financial reporting so all necessary transactions are recorded in accordance with GAAP. This will ensure timely completion of the audit and submission of the audit package to the Federal Audit Clearinghouse. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan. Finding Number: 2024-001 represents a material weakness in internal control over compliance with Kankakee County Community Services, Inc.'s major federal program and material non-compliance with the cash management and reporting requirements of the major federal program. Repeat Federal Award Finding: No Questioned Costs: None Major Program: AL#93.568 Low-Income Home Energy Assistance Program

Finding Number: 2024-002 Repeat Finding: No Type of Finding: Material Weakness in Internal Control over Financial Reporting Description: Grant Budget Management Condition: Kankakee County Community Services, Inc. did not effectively manage grant budgets during the fiscal year ended December 31, 2024. Specifically, management lacked adequate internal controls to monitor grant expenditures against approved budgets. As a result, the Organization overspent on multiple grants, incurring expenditures in excess of allowable or budgeted amounts. This contributed to an overall net loss for the year and required management to fund unallowable or excess costs using unrestricted resources. In addition, cash on hand as of December 31, 2024 was less than advances received from its funding sources, indicating advances were used to finance other expenses. Criteria: Kankakee County Community Services, Inc. is responsible for establishing and maintaining effective internal controls over financial reporting to ensure that transactions are properly authorized, recorded, and reported in accordance with generally accepted accounting principles (GAAP) and applicable grant requirements. Additionally, federal and other grant agreements require expenditures to be monitored to ensure costs are allowable, allocable, reasonable, and within approved budget limits. GAGAS requires that controls be designed and implemented to provide reasonable assurance regarding the reliability of financial reporting and compliance with laws, regulations, and grant agreements. Cause: The primary cause of the deficiency was insufficient oversight and monitoring of grant budgets by management. Specifically: Grant expenditures were not routinely compared to approved budgets. Budget-to-actual analyses were not performed or reviewed on a timely basis. Responsibilities for grant financial oversight were not clearly defined. Management did not take timely corrective action when overspending trends were identified. Effect: As a result of ineffective grant budget management, Kankakee County Community Services, Inc. exceeded approved grant budgets and incurred costs that were not fully reimbursable. This contributed to a net operating loss for the fiscal year and increased financial risk to the Organization. Additionally, the deficiencies resulted in a material misstatement risk within the financial statements and increased the likelihood of noncompliance with grant requirements, including spending grant advances on unrelated expenditures, potential questioned costs or required repayment to grantors. Recommendation: We recommend that management strengthen internal controls over grant budget management by: Implementing formal policies and procedures for grant budget monitoring. Performing and documenting routine budget-to-actual analyses for each grant. Clearly assigning responsibility for grant financial oversight. Establishing thresholds for investigation and escalation when expenditures approach or exceed budget limits. Providing training to staff responsible for grant accounting and financial management. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan. Finding Number: 2024-002 represents a material weakness in internal control over compliance with Kankakee County Community Services, Inc.'s major federal program and material non-compliance with the cash management and reporting requirements of the major federal program. Repeat Federal Award Finding: No Questioned Costs: None Major Program: AL#93.568 Low-Income Home Energy Assistance Program

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