REPORT DIGEST

DEPARTMENT OF HUMAN SERVICES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2024

Release Date:  February 10, 2026

FINDINGS THIS AUDIT: 9

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  4 -- 5 -- 9
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  4 -- 5 -- 9

FINDINGS LAST AUDIT: 9

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also
available on the worldwide web at
www.auditor.illinois.gov

SYNOPSIS

• (24-01) The Department does not have
sufficient internal control over accounting
for grant transactions resulting in
material misstatements to the draft
financial statements.
• (24-08) The Department of Human Services
(DHS) and the Department of Healthcare and
Family Services (HFS) (collectively, the
“Departments”) did not maintain adequate
internal controls to ensure initial
applications for benefits, redeterminations
of eligibility for benefits, and change
documentation were reviewed and/or
completed timely.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER
ACCOUNTING FOR FEDERAL AWARDS

The Department of Human Services
(Department) does not have sufficient
internal control over accounting for grant
transactions resulting in material
misstatements to the draft financial
statements.

In preparing the SCO forms, the Department
made errors in reporting expenditure
amounts, including expenditure adjustments,
and cash receipts, including lapse period
receipts, for its federal award programs,
resulting in errors in the financial
statements for grant transactions.
Additionally, based on audit procedures
performed, the SCO forms for the fiscal
year ended June 30, 2024 required multiple
revisions throughout calendar year 2025.

For financial reporting purposes, the
Department (Fiscal Services) tracks grant
data for purposes of accruing grant
receivables, unearned revenue, unavailable
revenue and payable balances, all of which
impact Federal Operating Grant Revenue,
using Office of Comptroller required SCO
forms including SCO563 Grant/Contract
Analysis, SCO-567 Interfund Transfers –
Grantee Agency, and SCO-568 Interfund
Transactions – Grantor Agency.

In addition, the Department became the
funding agent over five funds (Fund 0150 –
Rental Housing Support Program, Fund 0286 –
Illinois Affordable Housing Trust, Fund
0891 – Foreclosure Prevention, Fund 0892 –
Residential Property Municipality Relief,
and Fund 0971 – Build Illinois Fund)
previously administered by the Illinois
Department of Revenue (IDOR). When
reporting the activity for these new funds,
the Department did not properly track
current year expenditures and revenues for
financial reporting purposes in two of the
funds.

Some of the most significant errors are as
follows:

• In the Employment and Training Fund
(0347), the ending Federal Operating Grant
Revenue amount per the SCO-563 form did not
agree to the trial balance. As a result,
Federal Operating Grant Revenue was
overstated by $16.8 million which resulted
in an understatement of Unearned Revenue.

• In the Illinois Affordable Housing Trust
Fund (0286), grant funds provided to a
subrecipient in advance of eligibility
requirements being met were not reported
correctly in the trial balance. Further,
Total Reimbursable Costs and Federal
Operating Grant Revenue amounts per the
SCO-567 and SCO-568 did not agree to the
trial balance. As a result, Grant Advances
were understated by $21 million, General
Government Expenditures were understated by
$240 million and beginning Committed Fund
Balance was understated by $261 million.

• In the State Cure Fund (0324), grant
funds provided to a subrecipient in advance
of eligibility requirements being met were
not reported correctly in the trial
balance. Further, Total Reimbursable Costs
and Federal Operating Grant Revenue amounts
per the SCO-567 and SCO-568 forms did not
agree to the trial balance. As a result,
Grant Advances were understated by $88.7
million, General Government Expenditures
were understated by $41.8 million, Federal
Operating Grant Revenue was understated by
$96.6 million and beginning fund balance
was understated by $130.2 million.

The errors reflected above were corrected
in the final financial statements.  In
addition to the above, there were multiple
uncorrected misstatements identified.

We recommended the Department strengthen
its internal control over preparing the SCO
Forms by including a reconciliation of
Federal grant receipts and expenditures by
ALN included in each SCO Form to the
general ledger for each fund (the ERP
System). Deposits of Federal draws should
be recorded in the fund(s) that incurred
the associated expenditures. Once prepared,
balances reported in the SCO forms should
be compared to the draft financial
statements, by fund, to conclude if amounts
are reasonable. Additionally, large
balances in Due from Other Government –
Federal, Unearned Revenue and Unavailable
Revenue should be investigated as they are
unusual for reimbursement type grant awards
in which the Department can generally draw
funds monthly upon the incurrence of
qualifying expenditures.

The Department accepted our recommendation
and indicated corrective action is planned.

IES BACKLOG UNTIMELINESS

The Department of Healthcare and Family
Services (HFS) and the Department of Human
Services (DHS) (collectively, the
“Departments”) did not maintain adequate
internal controls to ensure initial
applications for benefits, redeterminations
of eligibility for benefits, and change
documentation were reviewed and/or
completed timely.

Management of the Departments have a shared
responsibility for various human service
programs in the State and for internal
controls over the manual and automated
processes relating to eligibility for these
programs. The Departments’ Integrated
Eligibility System (IES) is the automated
system used by the Departments to intake,
process (with the assistance of
caseworkers), and approve assistance
applications, maintenance items, Mid-Point
Reports, and redetermination of eligibility
as well as to make payments for the State’s
human service programs.

As part of our audit procedures, we tested
the Departments’ compliance with the
federal time requirements for approving or
denying applications, conducting
redeterminations, and working any changes
communicated by recipients for the
Supplemental Nutritional Assistance Program
(SNAP),  Temporary Assistance for Needy
Families (TANF), and Medical programs.

Initial Applications
As of June 30, 2024, the Departments had a
backlog of 63,789 medical applications,
30,396 SNAP related applications, and
13,517 TANF related applications, for which
the determination of eligibility to receive
benefits was not completed timely.

Redeterminations
As of June 30, 2024, the Departments had a
backlog of 42,061 medical recipient
redeterminations, 2,682 SNAP recipient
redeterminations, and 1,853 TANF recipient
redeterminations, for which the
redetermination of eligibility to continue
receiving benefits was not completed
timely.

Change Documentation
When a recipient encounters a change in
their situation, which may have an impact
on eligibility, the recipient is to notify
the Departments of such change. As of June
30, 2024, the Departments had a backlog of
4,381 cases in which information had been
received but not reviewed. Because the
Departments had not reviewed the
information, the Departments did not know
which program(s) might be impacted. As
such, we were unable to determine the
timeliness of processing the information.

We recommended management of both
Departments work together to implement
controls to comply with the requirement
that applications are reviewed and approved
or denied timely. Additionally, the
Departments should establish appropriate
controls to both monitor the progress of
eligibility redeterminations and ensure
those redeterminations occur timely.
Furthermore, the Departments should
establish appropriate controls to monitor
and process change documentation as
appropriate. Finally, the Departments
should assign and train any additional
personnel necessary so that eligibility is
performed within the timeframes required by
the Code.

DHS accepted the recommendation and stated
they will work with HFS to implement
additional controls to ensure compliance
with the requirement that applications are
reviewed and approved or denied timely.

HFS accepted the recommendation and
indicated corrective action implementation
is ongoing.

OTHER FINDINGS

The remaining findings pertain to medical
assistance program information, inadequate
internal controls over cutoff of accounts
payable and expenditures, inadequate
internal controls over financial accounting
and reporting, inadequate disaster recover
controls over the Integrated Eligibility
System (IES), inadequate general
information technology controls over IES,
inadequate controls over eligibility
determinations and redeterminations, and
failure to perform provider revalidation.
We will review the Department’s progress
towards the implementation of our
recommendations in our next engagement.

AUDITOR’S OPINIONS

The auditors stated the financial
statements of the Department of Human
Services as of and for the year ended June
30, 2024 are fairly stated in all material
respects.

This financial audit was performed by RSM
US LLP.

COURTNEY DZIERWA
Division Director

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:KJM