Illinois Alliance of Boys & Girls Clubs, Inc.

FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(viii), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.

FINDING 2022-003 Federal Program Information: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement: M. Subrecipient Monitoring - The Subgrantee shall ensure its monitoring methods provide reasonable assurance that the subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Condition: Supporting documentation for certain subrecipient invoices was not obtained and reviewed by the Organization. Cause: Insufficient internal control and administrative oversight. Effect or Potential Effect: The Organization was not in compliance with subrecipient monitoring requirements. Questioned Costs: Indeterminable. Context: For 12 of 25 21st CCLC subrecipient invoices tested, the Organization did not obtain or review all required source documentation from subaward recipients. For 11 of 25 TANF subrecipient invoices tested, the Organization did not obtain or review all required source documentation from subaward recipients. Identification as a Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the Organization enhance its procedures and internal controls over subrecipient monitoring to ensure local club invoices are properly reviewed. Views of Responsible Officials: The Alliance will enhance its procedures and internal controls over subrecipient monitoring to ensure local club invoices are properly reviewed.

FINDING 2022-004 Federal Program Information: 21st Century Community Learning Centers (Assistance Listing 84.287C) Criteria or Specific Requirement: C. Cash Management ? When non-federal entities are funded under the reimbursement method, the entity must pay for the costs for which reimbursement was requested prior the date of the reimbursement request. R. Reporting ? In accordance with the awarding agency?s annual grantee requirements, expenditure reports are to be submitted on a quarterly basis (even if there are no expenses) and be compliant with the spend-down in the Notice of Funding Opportunity/Request for Proposal. Reports are due on the 20th of the month following the end of the quarter. Condition: Amounts were inaccurately reported in the Organization?s quarterly expenditure reports. Cause: Lack of internal control and administrative oversight. Effect or Potential Effect: The Organization was not in compliance with the cash management and financial reporting requirements of its grant. Questioned Costs: Indeterminable. Context: For 6 of 6 quarterly expenditure reports selected for testing, the amounts reported did not tie to the underlying accounting records. As such, it could not be ascertained if the Organization paid for the costs prior to requesting reimbursement. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-002. Recommendation: We recommend the Organization enhance its procedures and internal controls over record retention to ensure complete and accurate financial reporting. Views of Responsible Officials: The Alliance will enhance its procedures and internal controls over record retention to ensure complete and accurate financial reporting.

Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(viii), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Alliance did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: For 6 of 6 pay periods selected for testing, the Alliance was not able to provide documentation to support payroll costs charged. Identification as a Repeat Finding: This is a repeat finding of Finding 2020-001. Recommendation: We recommend that the Alliance establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed.

Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Reporting - According to the respective Notice of Funding Opportunity, the Provider will submit monthly expenditure documentation and certification forms, quarterly and final Periodic Financial Reports in the format prescribed by the Department. The final (cumulative fiscal year) Period Financial report is due July 30th of the next fiscal year. Condition: Certain reports were not submitted to the awarding agency within the required timeframe. Cause: Insufficient internal controls and lack of sufficient administrative oversight with respect to required reporting. Effect or Potential Effect: The Alliance was not in compliance with reporting requirements. Questioned Costs: None. Context: 2 of 2 monthly expenditure documentation and certification forms selected for testing were not submitted within the required timeframe. Identification as a Repeat Finding: This is a repeat of finding 2020-002. Recommendation: We recommend that the Alliance enhance their established policies and procedures as well as enhance its internal controls to ensure that all programmatic and fiscal reports are submitted on a timely basis.

Federal Program Information: Temporary Assistance for Needy Families (CFDA #93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(viii), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Alliance did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: For 6 of 6 pay periods selected for testing, the Alliance was not able to provide documentation to support payroll costs charged. Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Alliance establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed.

Federal Program Information: Temporary Assistance for Needy Families (CFDA #93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Reporting - According to the respective Notice of Funding Opportunity, the Provider will submit monthly expenditure documentation and certification forms, quarterly and final Periodic Financial Reports in the format prescribed by the Department. The final (cumulative fiscal year) Period Financial report is due July 30th of the next fiscal year. Condition: Certain reports were not submitted to the awarding agency within the required timeframe. Cause: Insufficient internal controls and lack of sufficient administrative oversight with respect to required reporting. Effect or Potential Effect: The Alliance was not in compliance with reporting requirements. Questioned Costs: None. Context: 9 of 12 monthly expenditure documentation and certification forms submitted during the year were not submitted within the required timeframe. Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Alliance enhance their established policies and procedures as well as enhance its internal controls to ensure that all programmatic and fiscal reports are submitted on a timely basis.