CITY OF CHICAGO

FINDING 2025-002 Assistance Listing Number 93.600 Head Start Federal Agency U.S. Department of Health and Human Services Pass-through Agency Not applicable Award Numbers / Years 05CH012050, 2025 05HP000439, 2025 05HP000514, 2024 City Department Chicago Department of Family and Support Services (DFSS) Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub L. No. 109-282), hereafter referred as the "Transparency Act" that are codified in 2 CFR Parts 25 and 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the System for Award Management (SAM.gov). The subaward data reported must accurately represent the key data elements supported by the source documentation. These key data elements include the following: Subawardee Name, Subawardee UEI#, Amount of Subaward, Subaward Obligation/Action Date, Date of Report Submission, Subaward Number, Subaward Project Description, Subaward Names and Compensation of Highly Compensated Officers if thresholds are met. Reporting submission must be no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition/Context: Out of 30 subawards selected, nine subawards were found to be submitted beyond the due date. In addition, the subawardee’s UEI was not included in the data reported. Our sample was not statistically valid. See below for the errors noted: Assistance Listing Number 93.600 Transactions tested / Dollar amount 9 transactions $15,529,562 Subawards not reported / Dollar amount N/A Reports not timely / Dollar amount 9 reports $15,529,562 Subawards amount incorrect/ Dollar amount N/A Subawards missing key elements / Dollar amount 9 subawards $15,529,562 Effect: DFSS is not in compliance with the reporting guidelines required by FFATA for the Head Start program. Questioned Costs: None noted. Cause: DFSS did not have a process in place to ensure FFATA reporting was done timely during times of department turnover and transition. Recommendation: We recommend the Chicago Department of Family and Support Services (DFSS) ensure that reporting under FFATA is completed for all relevant subawards by the required due date with the correct key data elements maintained in each subaward and is reviewed for accuracy and completeness compared to the subawards' source documentation. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2024-002 Assistance Listing Number 14.241 Housing Opportunities for Persons with AIDS Federal Agency U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Numbers / Years Not applicable City Department Chicago Department of Public Health (CDPH) Criteria: All housing that involves acquisition, rehabilitation, conversion, lease, repair of facilities, new construction, project-or tenant-based rental assistance (including assistance for shared housing arrangements), and operating costs must meet various housing quality standards listed in 24 CFR sections 574.310(b)(1)-(2). Condition/Context: CDPH was unable to provide a full listing of housing units requiring inspections that receive HOPWA funding. Consequently, we were not able to complete testing in relation to this requirement. It was noted that a review conducted by HUD identified a similar issue where CDPH was in process of updating policies and procedures that would allow for identification of the housing units that require inspections. Effect: CDPH cannot demonstrate that it is compliant with the housing quality standards applicable to program-assisted units. Questioned Costs: Not able to be determined. Cause: CDPH did not have a process in place in 2024 to identify all housing units that require inspections. Recommendation: In response to the HUD review, CDPH developed a corrective action plan to begin compiling a comprehensive list of all projects requiring inspections. Documentation is to be provided to HUD that includes appropriate support for completion of the required inspections. This process is expected to begin taking place in the summer of 2025. We recommend that CDPH follow through with this corrective action to address this finding. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2024-003 Assistance Listing Number 14.231 Emergency Solutions Grants Program Federal Agency U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Numbers / Years E-22-MC-17-0006, 2022 / E-24-MC-17-0006, 2024 City Departments Department of Family and Support Services (DFSS) Department of Finance (DOF) Criteria: The program regulations for the Emergency Solutions Grants Program include requirements related to the timing of expenditures as well as payments to subrecipients. Specifically, all of the grant must be expended for eligible activity costs within 24 months after the date HUD signs the grant agreement with the City. In addition, the City must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient's complete payment request. Condition/Context: There was one award (E-22-MC-17-0006) where the period of performance ended in the audit year and was subject to the 24-month expenditure requirement. This award was underspent by $281,760 upon reaching 24 months after the award was executed by HUD. We also tested 40 individual payments made to subrecipients. 13 of those payments were paid after the 30-day subrecipient payment requirement. Our samples were not statistically valid. Effect: The City is not meeting target expenditure and payment requirements in accordance with the program agreements. Questioned Costs: None noted. Cause: DFSS did not expend the full amount of the identified award within the required timeframe because it was prioritizing the spending of a related CARES award during the same timeframe. The City's Voucher Audit and Tracking Unit (VATS) within the Department of Finance is responsible for making payments to subrecipients. At times, VATS will experience a significant increase in voucher submissions and is operating with limited staffing, which has caused some delays in processing payments. Recommendation: We recommend that DFSS determine if the budgeting and monitoring process can identify instances where spending does not occur within the required timeframes for current grants to help increase compliance in subsequent years. We also recommend that VATS review its processing procedures to determine if priority can be given to vouchers from programs with specific payment requirements. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2024-004 Assistance Listing Number 14.231 Emergency Solutions Grants Program Federal Agency U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Numbers / Years E-22-MC-17-0006, 2022 / E-23-MC-17-0006, 2023 City Department Department of Family and Support Services (DFSS) Criteria: According to program requirements, recipients of Emergency Solutions Grant Program funding must match the funding provided by HUD with an equal amount from sources other than those provided under the program. In addition, a recipient cannot use program funds to replace funds the City provided for street outreach and emergency shelter services during the preceding 12-month period. Condition/Context: We reviewed the process used by DFSS to monitor the matching requirement for two of the four active awards. According to the initial documentation received, it appeared that one award was under matched and one award was over matched. DFSS made corrections to the calculations based on the issues noted during our audit to both awards. The level of effort requirements were dependent on these same calculations and were revised along with the matching calculations. Our samples were not statistically valid. Effect: The City may not meet the various financial requirements contained in the awards' terms and conditions without appropriate oversight. Questioned Costs: None noted. Cause: DFSS did not have a definitive process in place to identify, calculate, and monitor the matching and level of effort requirements. Recommendation: We recommend DFSS review its policies and procedures regarding the matching and level of effort requirements to ensure they are accurately performed and monitored by appropriate financial personnel. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2024-005 Assistance Listing Number 14.239 Home Investment Partnerships Program Federal Agency U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Numbers / Years Not applicable City Department Department of Housing (DOH) Criteria: Participating jurisdictions must perform on-site inspections of rental housing occupied by tenants receiving HOME/HOME-ARP-assisted tenant-based rental assistance to determine compliance with housing quality standards per 24 CFR sections 92.209(i), 92.251(f), and 92.504 (d)). Condition/Context: One rental housing project had no evidence it was reinspected after failing the initital required inspection. A sample was taken of 14 projects receiving HOME-assisted funding. Supporting documentation was viewed for the most recent inspection of each project in the sample to ensure the inspection was completed within the required timeframe. It was noted that for a project that failed an inspection, a follow-up inspection was not completed. Our sample was not statistically valid. Effect: There is a higher likelihood that housing funded by the HOME program is not considered to be compliant with property standards. Questioned Costs: None noted. Cause: DOH did not have a process in place to ensure the reinspection was done timely. Recommendation: We recommend that the Chicago Department of Housing ensure that reinspections are flagged and completed in a timely manner in situations when the initial inspection failed. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2023-002 Assistance Listing Numbers 93.268 COVID-19 Immunization Cooperative Agreements 93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 93.354 COVID-19 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response 93.686 Ending the HIV Epidemic: A Plan for America – Ryan White HIV/AIDS Program Parts A and B Federal Agency U.S. Department of Health and Human Services Pass-through Agency Not applicable Award Numbers / Years 93.268: NH23IP922613 93.323: NU50CK000556 93.354: NU90TP922158 93.686: UT8H33950-01 City Department Department of Public Health (CDPH) Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the "Transparency Act" that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. The subaward data reported must accurately represent the key data elements supported by the source documentation. These key data elements include the following: Subawardee Name, Subawardee DUNS#, Amount of Subaward, Subaward Obligation /Action Date, Date of Report Submission, Subaward Number, Subaward Project Description, Subaward Names and Compensation of Highly Compensated Officers if thresholds are met. Reporting submission must be no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition/Context: Subawards sampled across the programs noted above were found to be submitted beyond the due date, not reported at all, reported using the wrong amount, or reported with an incorrect subawardee name. Sample sizes and errors found during testing are noted below. Our sample was not statistically valid. Effect: CDPH is not in compliance with the reporting guidelines required by FFATA. Questioned Costs: Not applicable. Cause: CDPH did not have a process in place to ensure FFATA reporting was done timely and accurately. Recommendation: We recommend the Chicago Department of Public Health (CDPH) ensure that reporting under FFATA is completed for all relevant subawards by the required due date with the correct key data elements for each subaward and is reviewed for accuracy and completeness compared to the subawards' source documentation. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2023-003 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not applicable Award Numbers / Years ERA2 City Department Department of Housing (DOH) Criteria: Under the requirements of 2CFR 200.329, the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. The U.S. Treasury requires program performance reports to be filed quarterly. Condition/Context: Two out of the four quarterly ERA Compliance reports were sampled. It was noted that DOH did not file the second quarter report on a timely basis. The portal did not allow a report to be filed after the due date. The sample was not statistically valid. Effect: DOH was not in compliance with the reporting guidelines for the program. Questioned Costs: Not applicable. Cause: DOH did not have a process put in place to ensure that each required quarterly performance report was filed by the deadline. Recommendation: We recommend that DOH review its reporting process to ensure that reports are filed in a timely basis. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2022-002 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not applicable Award Numbers / Years 2022 City Departments Department of Housing Criteria: According to Treasury guidance, recipients of the Emergency Rental Assistance Program (ERAP) are expected to develop guidelines for determining eligibility of beneficiaries. The City contracted with a local agency to make eligibility determinations and authorize the related payments to beneficiaries based on the guidelines established by the City. The City purchased a software program to assist in the record-keeping and documentation of the case management process from intake to eligibility determinations to payment authorization. Condition/Context: After conducting an extensive analysis of payments made under ERAP, the City has determined that there are potential unallowable payments that were made to ineligible beneficiaries. In addition, the City noted that some eligibility determinations were made and approved by the same person employed by the contractor, resulting in a lack of internal controls over the process. The City is in the process of investigating the validity and extent of potential unallowable payments made. In a sample of 60 benefit payments made, we noted 8 instances where the eligibility determination was approved by the same person who made the determination. Our sample was not statistically valid. Effect: It is possible that program payments were made to ineligible participants. Questioned Costs: Questioned costs cannot be determined at this time. Cause: Payments to potentially ineligible beneficiaries were likely due to the large volume of applications processed by the contractor required in a short amount of time. According to Treasury guidelines, the burden of proof of meeting eligibility guidelines is low; therefore, applicants may have provided inaccurate data in order to receive payments under the program. The software system used by the contractor appears to be lacking certain controls that would ensure proper segregation of duties between personnel determining eligibility and personnel reviewing eligibility determinations. Recommendation: We recommend the City continue to investigate questionable cases to determine the validity of the payments made and to quantify the amount of ineligible payments made. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2022-003 Assistance Listing Numbers 97.024 Emergency Food and Shelter National Board Program Federal Agency U.S. Department of Homeland Security Pass-through Agency Not Applicable Award Numbers / Years 2022 City Departments Office of Budget and Management Criteria: The Funding Guidance provided to the City by the Federal Emergency Management Agency states that the program does not allow the use of indirect cost rates. Administrative costs that support relief services are allowable. Limitations on the allowability of expenditures under federal programs apply to both the City as the direct recipient as well as any subrecipients awarded program funds by the City. Condition/Context: The transactions selected in our sample consisted of reimbursements to subrecipients. One of the five sampled transactions was for administrative costs charged to the program utilizing a percentage of direct costs rather than identifying specific administrative costs that support relief services. Our sample was not statistically valid. Effect: Unallowable costs may have been charged to the program by the City via its subrecipient agreements. Questioned Costs: Known questioned costs for ALN 97.024 consist of unsupported administrative cost reimbursements made to subrecipients in the amount of $230,902. Cause: City personnel responsible for administering the award did not prohibit subrecipients from including administrative costs charged as a percentage of direct costs in the program expenditures presented in their vouchers. Recommendation: We recommend the City determine the amount of ineligible administrative costs charged to the City and determine if the funds should be returned to the federal government or if they can be used to provide additional services under the program. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2022-004 Assistance Listing Numbers 97.024 Emergency Food and Shelter National Board Program Federal Agency U.S. Department of Homeland Security Pass-through Agency Not Applicable Award Numbers / Years 2022 City Departments Office of Budget and Management Criteria: According to 2 CFR 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and include specific award identification data as detailed in the Uniform Guidance. Condition/Context: Both of the subaward agreements tested did not contain the assistance listing number, federal award identification number, federal award date, and unique entity identifier in the original agreement. The grant agreement said that information would be forthcoming, however, no additional communications were provided to the subrecipients with this information. Our sample was not statistically valid. Effect: Subrecipients may not receive the appropriate subaward information. Questioned Costs: None noted. Cause: At the time the subawards were awarded to the subrecipeints, the missing award information was not known by the City. Subsequently, there was not a process to ensure the required information was provided once it became available. Recommendation: We recommend that the City provide the subrecipients with the appropriate award identification information. In addition, the City should consider whether a procedure is needed to revisit awards periodically to ensure that all required information has been provided to its subrecipients. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2021-001 Assistance Listing Numbers 14.239 Home Investments Partnership Program 93.044 Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 COVID-19 Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.889 National Bioterrorism Hospital Preparedness Program 93.914 HIV Emergency Relief Project Grants Federal Agencies 14.239: U.S. Department of Housing and Urban Development 93.044, 93.889, and 93.914: U.S. Department of Health and Human Services Pass-through Agency 93.044: Illinois Department on Aging Award Numbers / Years 14.239: M21MC170201 93.044: CAREST32012, T32012, T32112, and T32212 93.889: U3REP190582C, and U3REP190582-02 93.914: H89HA00008-30 and H89HA00008-31 City Departments 14.239: Department of Housing 93.044: Department of Family and Support Services 93.889 and 93.914: Department of Public Health Criteria: 2 CFR section 200.303 requires the City to establish and maintain effective internal controls over federal awards, including salaries charged to those federal awards. The City's Personnel Activity Reporting (PAR) and Reconciliation Manual requires managers to have all submitted time reviewed and either approved or rejected by the end of the following week in which the time is submitted. Condition/Context: For two of the 40 employees? monthly time sampled, the supervisor's approval of time charged to awards did not equal 100% of the total time submitted by the employee. The time submitted for the two employees for the month selected were 147 hours and 154 hours. However, the time approved by the supervisor was 7 hours and 77 hours, respectively. Our sample was not statistically valid. Upon further inspection of the approval spreadsheets provided by the City for the departments listed above, a total of 262 instances occurred in which the supervisor did not approve 100% of the employee's time submitted out of a total of 7,607 time entry submissions. Effect: Without approval of all the time charged to grant programs, this could result in payroll being charged to federal programs that is unsupported by records. Questioned Costs: None noted. FINDING 2021-001 (cont.) Cause: Supervisor approval of employee time submissions is a manual control and unapproved time may continue to pass through the PAR System and get charged to a federal program. Recommendation: We recommend utilization and review of the Time Approval Rates available from the PAR System to identify instances where time submitted is not approved at a rate of 100%. If the time approved is not 100% for any given employee, we recommend that the Office of Budget and Management work with the responsible supervisor to approve or deny the time submitted. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2021-002 Assistance Listing Numbers 93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.044 COVID-19 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.914 HIV Emergency Relief Project Grants Federal Agency U.S. Department of Health and Human Services Pass-through Agency 93.044: Illinois Department on Aging Award Numbers / Years 93.044: CAREST32012, T32012, and T32212 93.914: H89HA00008-30 City Departments 93.044: Department of Family and Support Services 93.914: Department of Public Health Criteria: 2 CFR section 200.430(i)(1)(viii)(C) requires the system of internal controls to include processes to conduct after-the-fact reviews of interim charges made to federal awards based on budget estimates used to charge salaries and wages. All necessary adjustments must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition/Context: The Personnel Activity Report (PAR) and Reconciliation process occurs quarterly to reconcile the budgeted amount of salaries and wages to the actual salaries and wages that should be charged to a grant award. The Special Programs for the Aging - Title III, Part B ? Grants for Supportive Services and Senior Centers (awards CAREST32012 and T32012) closed on September 30, 2021. However, the 4th quarter reconciliations were not completed prior to grant closeout and final report submission to the grantor. Therefore, unsupported payroll costs were charged to these awards. Additionally, award T32212 did not close during the audit period, but included unsupported payroll costs. FINDING 2021-002 (cont.) The HIV Emergency Relief Project Grants (award H89HA00008-30) closed on February 28, 2021, and the final report was submitted to the grantor on July 31, 2021. No payroll was charged to the fund in the accounting system or the PAR System beyond the first quarter, however, the City did not identify an adjustment to be made to the award fund until the 4th quarter reconciliation, which was after the final report was submitted to the grantor. Therefore, unsupported payroll costs were charged to this award. Additionally, time worked by employees in March 2021 were charged to this award after closeout. Effect: There was unsupported payroll charged to the federal awards. Questioned Costs: Questioned costs were calculated by comparing the amounts reported in the general ledger and included in reimbursement requests to the grantor with the amounts calculated by the PAR System. For ALN 93.914, questioned costs totaled $43,318. For ALN 93.044, questioned costs totaled $60,467 for the COVID-19 portion and $426,757 for the non-COVID-19 portion. Cause: The grant was closed prior to the City completing the quarterly PAR reconciliations, and therefore adjustments could not be made. Additionally, the City payroll was not posted timely to the system to allow for the quarterly PAR reconciliations to be completed timely. Recommendation: We recommend the City post payroll and perform the quarterly PAR reconciliations on a timely basis. Additionally, the City should be cognizant of grant award closeout dates. In cases where adjustments must be made after closeout, a process to charge those expenditures to another funding source should be implemented. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2021-003 Assistance Listing Number 21.019 COVID-19 Coronavirus Relief Fund Federal Agency U.S. Department of Treasury Pass-through Agency Not Applicable Award Number / Year 2020 City Department Department of Housing Criteria: In accordance with 2 CFR Part 200.332, pass-through entities must evaluate subrecipient risk of noncompliance with federal awards and monitor subrecipient activities to ensure the subaward is used for authorized purposes. Condition/Context: Out of nine subrecipients selected for testing, it was noted that one subrecipient was not subject to a risk assessment or monitoring by the Chicago Department of Housing, the awarding City department. Our sample was not statistically valid. Effect: Noncompliance could occur in a subrecipient that is not subject to monitoring procedures. Questioned Costs: None noted. Cause: The Department of Housing did not follow its policies in regard to subrecipient monitoring. Recommendation: We recommend the Chicago Department of Housing review its procedures for subrecipient monitoring to ensure that appropriate risk assessments and monitoring of activities are completed on a regular basis. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2021-004 Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Federal Agency U.S. Department of Treasury Pass-through Agency Not Applicable Award Number / Year 2021 City Department Department of Housing Criteria: The U.S. Department of Treasury established a variety of reporting requirements in relation to the Emergency Rental Assistance Program. Monthly reports were due 15 days after the end of the month and due dates for certain quarterly reports were extended until November 29, 2021. Condition/Context: We included two monthly reports in our sample and one of them was submitted 12 days after the due date. We also included two quarterly reports in our sample and one of them was submitted 2 days after the due date. Our sample was not statistically valid. Effect: The City did not meet the reporting timeline requirements established by the grantor. Questioned Costs: None noted. Cause: The specific cause has not been determined. Recommendation: We recommend the City review its reporting procedures to ensure that reports are submitted by the established due dates. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2021-005 Assistance Listing Number 14.241 Housing Opportunities for Persons with AIDS Federal Agency U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Numbers / Years ILH18F001, ILH19F001, ILH20F001, ILH21F001, and ILH180010 City Department Department of Public Health (CDPH) This is a partial repeat of Finding 2020-003 from the previous year. Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282) that are codified in 2 CFR Part 170, direct recipients of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. The subaward data reported must accurately represent the key data elements supported by the source documentation. These key data elements include the following: Subaward date, subawardee identification number, amount of subaward, subaward obligation / action date, and subaward number. This reporting must happen no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. Condition/Context: Five subawards were sampled related to Assistance Listing Number 14.241. CDPH did not report one of its first tier subawards of $30,000 or more through FSRS by the required due date. Our sample was not statistically valid. CFDA No. Transactions Tested Subward not reported Report not timely Subaward amount incorrect Subaward missing key elements 14.241 5 1 0 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $2,664,256 $1,000,000 $0 $0 $0 Effect: The subaward mentioned above was not submitted timely. Questioned Costs: None noted. Cause: There is uncertainty as to when specific awards are available for reporting within FSRS; therefore, City staff are not always aware of when the reporting timelines begin. Recommendation: We recommend that City staff responsible for reporting establish regular system checks to help avoid risks of late or missed reporting requirements. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2021-006 Assistance Listing Numbers 14.239 Home Investment Partnerships Program 93.889 National Bioterrorism Hospital Preparedness Program 93.914 HIV Emergency Relief Project Grants Federal Agencies 14.239: U.S. Department of Health and Human Services 93.889 and 93.914: U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Numbers / Years 14.239: M19MC170201 93.889: U3REP190582C and U3REP190582-02 93.914: H89HA00008-31 City Department Department of Finance Criteria: 2 CFR section 200, Appendix VII, paragraph D requires governmental units to submit the indirect cost rate proposals to their cognizant agency within six months after the close of the governmental unit's fiscal year. Condition/Context: We selected the 2021 indirect cost rate proposals for the Department of Public Health and Department of Housing for testing. The indirect cost rate proposals were due to the cognizant agency by June 30, 2021, however they were not submitted until June 16, 2022. Effect: The 2021 indirect cost rate proposals were not submitted timely. Questioned Costs: None noted. Cause: The indirect cost rate proposals were not submitted timely due to an oversight in the Grant and Project Accounting Division of the Department of Finance. Recommendation: We recommend that controls are established to ensure timely submission of the indirect cost rate proposals. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2020-002 CFDA No. 14.218 Community Development Block Grant Federal Agency U.S. Department of Housing and Urban Development Pass-through Agency Not applicable Award Number / Year B-20-MC-17-0006 / 2020 City Departments Department of Law Criteria: Per guidance provided in 2 CFR part 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: 1) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; 2) Be incorporated into the official records of the non-federal entity; and 3) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities. Condition/Context: The Department of Law uses semi-annual certification forms to document employee salaries and wages. Two out of the forty payroll transactions sampled were related to employees within the Department of Law. Of these payroll transactions selected, both employees from the Department of Law had variances between the amount charged to the award and the amount that should have been charged to the award based on the employees' time actually spent on the grant as documented on the semi-annual certification forms. An entry was not made to true up the amount charged to the grant as there was no reconciliation completed by this department to verify time and effort spent on the grant. This resulted in an overcharge of payroll expenditures to the grant. The sample was not statistically valid. Effect: The department overcharged two employees? salaries to the federal award. Questioned Costs: Questioned costs were determined to be $2,961 for CFDA No. 14.218. This amount was calculated by comparing the information on the semi-annual certifications to the actual charges made to the program for the employees and pay periods selected. Cause: The department does not have a consistent system for obtaining and reviewing the necessary supporting documentation and/or making look-back adjustments to record actual time and effort as required under the Uniform Guidance for payroll changes. Recommendation: We recommend the Department of Law consider participation in the City's electronic process for tracking grant time, including consistent use of quarterly reconciliations and completing the resulting adjustments that are derived from these reconciliations. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2020-003 CFDA Nos. 14.218 Community Development Block Grant 93.268 COVID-19 Immunization Cooperative Agreements Federal Agencies U.S. Department of Housing and Urban Development U.S. Department of Health and Human Services Pass-through Agency Not applicable Award Number / Year B-20-MC-17-0006 / 2020 1 NH23IP922613-01-00 / 2020 City Departments Department of Housing (DOH) Department of Family and Support Services (DFSS) Department of Public Health (CDPH) Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282) that are codified in 2 CFR Part 170, direct recipients of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. The subaward data reported must accurately represent the key data elements supported by the source documentation. These key data elements include the following: Subaward date, subawardee DUNS #, amount of subaward, subaward obligation / action date, and subaward number. This reporting must happen no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. Condition/Context: Subawards sampled across major programs were found to be submitted beyond the due date, not reported at all, or reported using the wrong amount. Sample sizes and errors found during testing are noted below. Our sample was not statistically valid. {See table in single audit report.} Effect: The City is not in compliance with the reporting guidelines required by FFATA.FINDING 2020-003 (cont.) Questioned Costs: None noted. Cause: Due to staff turnover and transitioning, the DOH and DFSS did not have a sufficient amount of trained staff available to report their first tier subawards through FSRS in a timely manner. In addition, the subawards reported by DFSS weren't being reviewed in detail for accuracy compared to the subawards' source documentation. The award in question for CDPH was a COVID supplemental add-on to the original award agreement and it was not identified by department personnel in the reporting system. Recommendation: We recommend the City ensure that reporting under FFATA is completed for all relevant subawards by the required deadline, and the key data elements reported for each of the subawards is reviewed for accuracy compared to the subawards' source documentation. Views of Responsible Officials: See Corrective Action Plan.

FINDING 2020-004 CFDA No. 16.922 Equitable Sharing Program Federal Agency U.S. Department of Justice Pass-through Agency Not applicable Award Numbers / Years N/A / 2020 City Department Chicago Police Department (CPD) Criteria: Per guidance provided in the Guide to Equitable Sharing for State, Local, and Tribal Law Enforcement Agencies, the Equitable Sharing Annual Certification report is to be submitted no later than 2 months after the grantee?s fiscal year-end. Condition/Context: CPD did not submit its Equitable Sharing Annual Certification (ESAC) report by the 2 month deadline (March 1) after the City?s fiscal year-end. Effect: CPD was out of compliance with the Equitable Sharing program?s reporting requirements until the ESAC report was submitted on May 21, 2021, the date the report was submitted. Questioned Costs: None noted Cause: The ESAC report was submitted late because CPD was waiting for the U.S. Department of Justice to complete follow up concerning a program review that was in process. Recommendation: We recommend that CPD review its current process for preparing, approving and submitting its ESAC report and implement procedures to ensure that the ESAC report is submitted within 2 months after the City?s fiscal year end (March 1 of each year). Views of Responsible Officials: See Corrective Action Plan.

FINDING 2019-001 CFDA Nos. 93.069 Public Health Emergency Preparedness 93.940 HIV Prevention Activities ? Health Department Based Federal Agency U.S. Department of Health and Human Services Pass-through Agency Not applicable Award Numbers / Years NU90TP921901, NU90TP922033, NU62PS924560 / 2019, 2020 City Department Department of Public Health Criteria: Per guidance provided in 2 CFR part 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: 1) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; 2) Be incorporated into the official records of the non-federal entity; and 3) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities. Condition/Context: For these federal programs, the department supervisors approve time of employees. There were three instances out of forty payroll transactions sampled for CFDA No. 93.940 and one instance out of forty payroll transactions sampled for CFDA No. 93.069 where an employee was charged to an award but the time was not properly approved by a supervisor. The samples were not statistically valid. Effect: The department could charge invalid time to relevant awards if proper approvals do not take place. Questioned Costs: None noted Cause: Though in 95% of the instances tested the department's control for approving employee was applied, in 5%, or four instances, controls were not applied as designed due to transition in the supervisory role. Recommendation: We recommend the department implement procedures to ensure the controls in place are properly completed prior to finalization of payroll. Views of Responsible Officials: Corrective Action: Quarterly, beginning with the 3rd quarter of CY2020, the Chicago Department of Public Health (CDPH) Finance Deputy Commissioner, or designee, will send the Supervisor Approval Rating reports to CDPH Personnel Activity Reporting (PAR) Liaisons, Deputy Commissioners and Commissioner. The report will detail approval ratings by supervisors that are less than 100%. Deputy Commissioners and the Commissioner, as applicable, will work directly with the identified supervisor and PAR Liaisons to have time approved within 5 business days. If time is not approved, and assuming no extenuating circumstances agreed upon by the CDPH Finance Deputy Commissioner, the supervisor will receive verbal counseling. If time is not approved then within 2 business days after receiving verbal counseling, the supervisor will receive next level of discipline. Further, CDPH will work with OBM to schedule training on the PAR system. Anticipated Completion Date: September 30, 2020 Person Responsible for Corrective Action: Tonya Tucker, Deputy Commissioner

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