REPORT HIGHLIGHTS IEMA-OHS’S ADMINISTRATION OF CONTRACTS AND STAFFING PERFORMANCE AUDIT Release Date:  August 11, 2026 State of Illinois, Office of the Auditor General CHRISTOPHER B. MEISTER, 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 BACKGROUND: Legislative Audit Commission Resolution Number 167, adopted May 20, 2024, directed the Auditor General to conduct a performance audit of the Illinois Emergency Management Agency-Office of Homeland Security’s (IEMA-OHS) administration of contracts and staffing. Specifically, the audit directed us to examine:  IEMA-OHS’s contracting and monitoring processes; the organizational structure relative to funded, unfunded, and vacant positions; and the amount of overtime incurred for the IEMA-OHS billable-hour contractors. IEMA-OHS identified 28 billable-hour contracts with 12 vendors during the audit period of FY22-FY23. Key Findings: Examination of Billable-Hour Contracts • IEMA-OHS utilized contractors for mitigation, preparedness, response, and recovery during the COVID-19 pandemic. IEMA-OHS indicated it paid a premium for contractual staff due to being procured during the pandemic when there was an overwhelming demand and a limited supply of qualified people; however, IEMA-OHS could not provide documentation to support that it conducted an analysis to determine the appropriate number of contractor staff it needed. • IEMA-OHS utilized, for one billable-hour contractor, a process where contractual staff would be paid for time not worked, known as ‘standdown’ or ‘standby.’  For the audit period FY22-FY23, overall, the contractor billed IEMA-OHS $220.3 million of which $78.5 million, or 36 percent, was billed time spent on standdown.  The number of standdown hours totaled 469,892. • IEMA-OHS failed to enforce a contractual provision for a billable-hour contract relating to notifications when contractual staff were idle and not assigned to a mission.  This resulted in contractual staff being paid for idle time. • IEMA-OHS lacked sufficient resources and procedures to review billable-hour invoices for accuracy.  IEMA-OHS utilized two billable-hour contractors to review the invoices to ensure the State was being properly billed.  The initial contractor providing invoice review had its own deficiencies in billings submitted.  IEMA- OHS contracted with a second outside firm (at a cost of $1.25 million) for review of the billable-hour invoices. • IEMA-OHS failed to ensure vendors provided adequate support for invoice billings prior to approving payment for those invoices.  The invoices IEMA-OHS approved for payment lacked standardized timesheets and lacked sufficient work descriptions. • IEMA-OHS paid a billable-hour contractor an all-inclusive hourly rate which included housing, meals, travel, benefits, and other costs.  Auditors estimate that IEMA-OHS paid one billable-hour contractor $1,447,425 for housing of contractual staff on days when the contractual staff were housed in personal residences instead of hotels. IEMA-OHS Organizational Structure • As of June 1, 2023, IEMA-OHS had 285 positions listed in its organizational chart.  Of these 285 positions, 192 were filled, 54 were vacant, and 39 were unfunded.  IEMA-OHS had a higher number of positions in FY22 (297) than FY23 (285). Additionally, there were 10 additional vacancies within IEMA-OHS in FY23 compared to FY22. • IEMA-OHS indicated it took as long as 1.5 to 2 years to hire a new position. Accordingly, some positions remained vacant even though the headcount was allocated and funding was available. • Billable-hour contracts at IEMA-OHS were utilized to assist the agency with needed resources with differing missions, such as with the COVID-19 pandemic. • IEMA-OHS had multiple agency officials involved with billable-hour contractors, mainly upper-level officials. Documentation showed that as of May 2026 IEMA-OHS had identified 27 staff involved with billable-hour contracts in varying roles, for example contract oversight or legal assistance.  Sixteen of those staff have left the agency. • IEMA-OHS utilized an individual provided by a billable-hour contractor to fill in for the Executive Assistant to the Director while that agency employee was on leave.  The contractor was paid $435,000 for the period November 2022 through October 2023 for this individual. • IEMA-OHS utilized billable-hour contractor staff to perform tasks normally reserved for regular State of Illinois employees.  The usage of contractor staff on ‘COVID Nexus’ work ranged from a Document Planning position billed by the vendor at a total of $5,700 (9.7 months worked) to a COVID Invoice Evaluation position billed by the vendor at a total of $747,598 (18 months worked).  Overall, IEMA-OHS was billed more than $100,000 for 55 of 66 positions (83 percent) of the COVID Nexus positions. Billable-Hour Contract Overtime • Thirty-two percent (9 of 28) of the IEMA-OHS billable-hour contracts from FY22 and FY23 allowed contractors to bill IEMA- OHS a higher rate for overtime.  Overtime rates in the nine contracts ranged from 1.15 to 2.00 times the standard contract rate.  IEMA-OHS indicated it paid a premium for contractual staff due to being procured during the pandemic when there was overwhelming demand and limited supply of qualified people. • IEMA-OHS did not utilize an approval process for all overtime worked by its billable-hour contractors during FY22- FY23.  One billable-hour vendor that was authorized to charge overtime, billed $88.4 million in overtime to IEMA-OHS during FY22-FY23.  Another vendor, that was not authorized to charge extra for overtime, billed 644,653 hours beyond the established minimum 40- or 60-hour work- week requirements. • During the audit, IEMA-OHS reported no instances of overpayments to one billable- hour contractor.  However, for another billable-hour contractor, IEMA-OHS did identify $1.5 million that was processed as credits in the contractor billings. Key Recommendations: The audit report contains 10 recommendations directed to IEMA-OHS including: • IEMA-OHS should, in terms of contractual relationships where staff are provided, conduct and document an analysis of the demand for those contractor staff. Additionally, if contractor staff are not needed, IEMA-OHS should consider developing contractual criteria that either lowers rates paid or limits paying for time not worked. • IEMA-OHS should enforce contract provisions related to billable-hour contracts and document how compliance with the provisions was accomplished. Additionally, IEMA-OHS should maintain documentation to support how many contractual staff are needed to best utilize available funding. • IEMA-OHS should ensure vendors provide adequate timesheet documentation for billable-hour contracts including detailed descriptions of work completed and contractor signatures, or other documented mechanisms, for certifying the accuracy of their timesheets. • IEMA-OHS should devote sufficient resources to the review of billable-hour contractors, prior to making payments to vendors, to ensure that taxpayer funds are protected from loss.  Additionally, IEMA- OHS should require all billable-hour contractors to maintain signatures, or other documented mechanisms, on time reports for time billed to the State of Illinois for certifying the accuracy of the time reports.  Finally, IEMA-OHS should have policies and procedures in place for invoice review prior to commencing work with the contractors. • IEMA-OHS should develop procedures on when to utilize billable-hour contractors in lieu of regular State employees to perform work.  The procedures should address the negotiation of rates and take into consideration rates paid to regular State employees for the same work. • IEMA-OHS should implement and enforce an approval process for time worked by billable-hour contractors exceeding an appropriate number of hours. This performance audit was conducted by the staff of the Office of the Auditor General.