Chicago Bar FoundationNon-Profit

Finding 2022-002 ? Suspension and Debarment Major Program: COVID-19: American Rescue Plan Act of 2021 - Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Federal Agency: Department of the Treasury Pass-Through: County of Cook, Illinois Grantor Number: 831926584 Award Period: July 29, 2021 through November 30, 2024 Type of Finding: Significant deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: Nonfederal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition: Through audit procedures performed, we noted that the Foundation does not have procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Questioned Costs: None. Context: During our testing, we noted a formal policy was not in place over suspension and debarment. We also noted that the Foundation did not determine or verify whether one vendor in which a contract was entered into was not suspended or debarred prior to entering into the contract. Cause: Policies and procedures had not been put into place to verify whether the Foundation is entering into covered transactions with entities that are not suspended or debarred. Effect: Possible receipt of federal funds or assistance by an ineligible contractor. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that current policies and procedures over covered transactions be updated to include one of the following procedures related to suspension and debarment: ? Searching for the person or entity within the Excluded Parties List System; ? Collecting certification from the person or entity; or ? Adding a clause or condition to the covered transaction with that person or entity Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding. The Foundation agrees with the recommendations of the auditors and has already prepared a draft policy regarding suspension and debarment. The CBF also confirmed that the one vendor who was not formally cleared in advance of her contract being executed, a longtime partner of the CBF, is able to receive federal funds.

Finding 2022-003 ? Procurement Major Program: COVID-19: American Rescue Plan Act of 2021 - Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Federal Agency: Department of the Treasury Pass-Through: County of Cook, Illinois Grantor Number: 831926584 Award Period: July 29, 2021 through November 30, 2024 Type of Finding: Significant deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Foundation is required to have documented procurement policies and procedures which comply with the compliance requirement: UG ?200.318 general procurement standards, UG ?200.319 competition, and ?200.320 methods of procurement to be followed. Condition: The Foundation does not have formal policies and procedures over procurement to ensure controls and oversight are in place to ensure procurement compliance requirements are met. Questioned Costs: None. Context: The Foundation does not have formal policies and procedures over procurement to ensure requirements are met and properly documented. Cause: Lack of a formal policy and procedure over procurement. Effect: Possible payment of federal funds to vendors that did not properly go through the required procurement steps in accordance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: The Foundation should implement a procurement policy and procedure that includes the selection and documentation of procurement rationale and controls and oversight. This policy should be followed for all procurement transactions. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding. The Foundation agrees with the recommendations of the auditors and has already prepared a draft procurement policy.

Finding 2022-004 ? Schedule of Expenditures of Federal Awards Major Program: COVID-19: American Rescue Plan Act of 2021 - Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Federal Agency: Department of the Treasury Pass-Through: County of Cook, Illinois Grantor Number: 831926584 Award Period: July 29, 2021 through November 30, 2024 Type of Finding: Significant deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Foundation must provide the Schedule of Expenditures of Federal Awards (SEFA). The schedule must be complete and accurate to provide for the basis of testing by the auditors as well as for accurate financial reporting to primary and secondary funders as well as subrecipients. Condition: During the audit, the Foundation identified $180,000 in payments originally classified as payments to subrecipients that should have been classified as general disbursements and procurement transactions after consulting with its funder. A change to the SEFA was required to adjust the amounts passed through to subrecipients. Questioned Costs: None. Context: The initial SEFA was provided showing an additional $180,000 in awards passed through to subrecipients when those payments were for procurement transactions. Cause: Lack of sufficient controls to appropriately distinguish between subcontractor payments and subrecipient payments. Effect: Amounts inaccurately reflected on the SEFA as subrecipient payments. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Foundation establish controls to evaluate contracts to distinguish between those that are a subcontractor relationship vs. subrecipient. Views of Responsible Officials and Planned Corrective Actions: The Foundation reclassified the partners mentioned in this finding as subcontractors after the auditors suggested that the subcontractor category might be a better fit for the work the partners covered by this finding are doing. The Foundation and the County agreed that the Uniform Guidance is vague enough that these partners could legitimately be classified as either subrecipients or subcontractors, but they ultimately decided that classifying them as subcontractors made more sense. Going forward, the Foundation will ask the County and the auditors for their recommendation before classifying any ambiguous subrecipients or subcontractors.

Finding 2021-002 ? Subrecipient Monitoring Major Program: Coronavirus Relief Funding CFDA Number: 21.019 Federal Agency: Department of the Treasury Pass-Through: County of Cook, Illinois Grantor Number: 831926584 Award Period: March 1, 2020 through December 21, 2021 Type of Finding: Significant deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: As a recipient of federal funding, the Foundation is required establish effective monitoring procedures to ensure a subrecipient?s compliance with the requirements of the federal program. Condition: In testing subrecipient monitoring, we noted that the Foundation as part of its monitoring procedures is required to maintain and review annual audit reports and keep those on file for subrecipients. For one of the five no reports were available, and for three of the five the annual reports on file were over two years old. Questioned Costs: None. Context: Of the $1,620,414 of federal funds expended by the Foundation during the year end 2021, $1,611,840 was passed-through to 8 subrecipients. Cause: Lack of a formal policy and procedure to ensure monitoring procedures are performed. Effect: Inadequate monitoring of a subrecipient of a federal award and evaluation of their work may result in matters for which the Foundation could be held responsible. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Foundation establish formal subrecipient monitoring procedures that require documentation addressing the evaluation of risk associated with the selection of a subrecipient of a federal award and the execution of the procedures determined necessary for the monitoring of their performance to ensure compliance with the federal program. This will ensure annual audit reports are obtained and reviewed timely. Views of Responsible Officials and Planned Corrective Actions: Management agrees that they did not have current audits for all partners at the time of the single audit and that additional formal procedures, including a requirement of timely submission by partners of completed audits, would be useful to supplement both the formal and informal procedures currently in place.