REPORT DIGEST

STATE OF ILLINOIS STATEWIDE SINGLE AUDIT
REPORT

SINGLE AUDIT
FOR THE TWO YEARS ENDED JUNE 30, 2025

Release Date:  October 22, 2026

FINDINGS THIS AUDIT:53

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  20 -- 30 -- 50
Category 2:  0 -- 3 -- 3
Category 3:  0 -- 0 -- 0
TOTAL:  20 -- 33 -- 53

FINDINGS LAST AUDIT: 51

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

SYNOPSIS

• The State expended approximately $40.0
billion from federal awards in FY25.

• A total of 34 programs or program
clusters were classified and audited as
major programs at 11 State agencies.
These programs constituted approximately
94.04% of all federal spending, or about
$37.6 billion.  In addition, 39 State
agencies expended federal financial
assistance in FY25.  Ten State agencies
accounted for about 98.7% of federal
dollars spent.

Statewide Finding – Financial Reporting

• The State of Illinois’ decentralized
financial reporting process prevents the
timely preparation of a complete and
accurate Schedule of Expenditures of
Federal Awards (SEFA).  As a result, the
State has a material weakness on all
federal programs for financial reporting.

Auditor’s Adverse Opinion on Major Program

• The Illinois Department of Human
Services (IDHS):
• Did not adequately review the recipient
agencies of the Food Distribution Cluster
(FDC) program. (Finding 2025-030, pages
118-119)

Significant Agency Findings Classified as
Material Noncompliance Resulting in an
Auditor Qualification

• The Illinois State Board of Education
(ISBE):
• Did not calculate cash requests for the
Twenty-First Century Community Learning
Centers (21st Century) and Student Support
and Academic Enrichment (SSAE) programs in
accordance with the requirements of 31 CFR
part 205 (Treasury Regulations). (Finding
2025-004, pages 50-51)

• The Department of Transportation (IDOT):
• Did not adequately review single audit
reports received from its subrecipients
for the Highway Planning and Construction
(Federal-Aid Highway Program) (HPC)
program on a timely basis. (Finding
2025-008, pages 59-61)

• The Illinois Department of Employment
Security (IDES):
• Failed to follow established policies
when making eligibility determinations for
claimants of the Unemployment Insurance
(UI) program. (Finding 2025-010, pages
64-66)
• Did not have an adequate process in
place to ensure that the ETA 9130
financial reports prepared for the UI
program are complete and accurate.
(Finding 2025-011, pages 67-69)
• Did not complete the Benefit Accuracy
Measurement (BAM) case file reviews in
accordance with United States Department
of Labor (USDOL) requirements for the UI
program. (Finding 2025-013, pages 72-74)

• The Illinois Department of Commerce and
Economic Opportunity (DCEO):
• Did not properly review or re-certify
the accuracy of the clearance pattern
specified in the Treasury-State Agreement
related to cash draws for the Low Income
Home Energy Assistance Program (LIHEAP).
(Finding 2025-017, pages 82-83)
• Did not perform its cash draws in
accordance with the funding technique
prescribed in the Treasury State Agreement
(TSA). (Finding 2025-018, pages 84-86)

• The Illinois Emergency Management Agency
and Department of Homeland Security (IEMA-
OHS):
• Had not established effective internal
controls or documented procedures to
ensure subrecipients of the Disaster
Grants - Public Assistance (Presidentially
Declared Disasters) (Public Assistance)
program perform audits required by the
Uniform Guidance. (Finding 2025-020, pages
90-93)

• The Illinois Department on Aging (IDOA):
• Did not issue management decision
letters for single audit report findings
for subrecipients of the Aging Cluster
program within required timeframes.
(Finding 2025-023, pages 100-102)

• The Illinois Department of Children and
Family Services (DCFS):
• Could not provide adequate supporting
documentation to substantiate payroll and
related costs claimed for federal
reimbursement under the Foster Care –
Title IV-E (Foster Care), Adoption
Assistance, and Temporary Assistance for
Needy Families (TANF) programs. (Finding
2025-024, pages 103-105)

• The Illinois Board of Higher Education
(IBHE):
• Did not have an adequate process in
place to ensure required award information
is accurately communicated to
subrecipients of the Child Care
Development Fund Cluster (CCDF) program.
(Finding 2025-028, pages 113-114)

• The Illinois Department of Human
Services (IDHS):
• Did not retain transaction-level detail
for beneficiary payments under the Summer
Electronic Benefits Transfer Program for
Children (Summer EBT) program. (Finding
2025-029, pages 115-117)
• Could not provide documentation to
support payments made on behalf of
beneficiaries of the TANF and CCDF Cluster
programs. (Finding 2025-031, pages
120-123)
• Could not locate case file documentation
supporting certain eligibility and special
test requirements for beneficiaries of the
TANF, Children’s Health Insurance Program
(CHIP), and Medicaid Cluster program.
(Finding 2025-032, pages 124-127)
• Made improper payments to beneficiaries
of the TANF program. (Finding 2025-033,
pages 128-130)
• Did not have an adequate process for
monitoring interagency expenditures
claimed under or used to meet maintenance
of effort (MOE) requirements of the WIC
Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC), TANF
and CCDF programs. (Finding 2025-034,
pages 131-134)
• Did not follow its established program
monitoring policies and procedures for
subrecipients of the TANF, CCDF, Social
Services Block Grant (SSBG), and Block
Grants for Prevention and Treatment of
Substance Abuse (SAPT) programs. (Finding
2025-035, pages 135-139)
• Did not have an adequate process in
place to ensure required award information
is accurately communicated to
subrecipients of the WIC, TANF, CCDF,
SSBG, SAPT programs. (Finding 2025-037,
pages 143-145)
• Did not perform monitoring reviews of
health and safety requirements for
providers of the CCDF program. (Finding
2025-038, pages 146-147)
• Did not have an adequate process in
place to ensure the ACF-204, Annual
special report for the TANF program is
complete and accurate. (Finding 2025-039,
pages 148-149)
• Did not maintain or provide supporting
documentation for the post expenditure
report including a key line item, the
number of eligible individuals who
received services paid for in part or in
whole with federal funds under the SSBG
program. (Finding 2025-040, pages 150-151)
• Did not have an adequate process in
place to ensure the Case Service Report
(RSA-911) performance report for the
Rehabilitation Services Vocational
Rehabilitation Grants to States
(Vocational Rehabilitation) program is
complete and accurate. (Finding 2025-041,
pages 152-153)

• The Illinois Department of Healthcare
and Family Services (DHFS):
• Improperly continued providing benefits
under the CHIP program to individuals who
were over the age of 18. (Finding
2025-043, pages 158-159)
• Could not provide sufficient supporting
documentation to evidence that certain
expenditures claimed under the CHIP and
Medicaid Cluster programs were disbursed
(paid) during the year ended June 30,
2025.  (Finding 2025-044, pages 160-163)
• Did not consistently and sufficiently
document the rates charged for medical
services expenditures charged to the CHIP
and Medicaid Cluster programs. (Finding
2025-045, pages 164-166)
• Has not established adequate procedures
to ensure providers of the Medicaid
Cluster program meet all of the State and
Federal provider eligibility requirements.
(Finding 2025-046, pages 167-169)
• Did not properly report monetary
recoveries of overpayments identified by
the Medicaid Fraud Control Unit (MFCU) on
its quarterly CMS-64 report. (Finding
2025-047, pages 170-171)
• Did not ensure the annual financial
audits prepared during the year ended June
30, 2025 for Managed Care Organizations
(MCOs) of the CHIP and Medicaid Cluster
programs met the requirements of the MCO
contracts and federal regulations.
(Finding 2025-048, pages 172-174)
• Did not perform certain Medicaid Cluster
program drug rebate activities within
required timeframes. (Finding 2025-049,
pages 175-177)
• Did not accurately report certain
Medicaid Cluster program drug rebates on
quarterly federal financial (CMS 64)
reports. (Finding 2025-050, pages 178-181)
• Failed to conduct utilization reviews
over HCBS services for the nine waivers
contracted out to its vendor during fiscal
year 2025. (Finding 2025-051, pages
182-184)
• Could not locate case file documentation
supporting certain eligibility
requirements for beneficiaries of the CHIP
and Medicaid Cluster program.  (Finding
2025-053, pages 187-189)

In addition, IDOT, IEMA-OHS, IDOA,
Illinois Community College Board (ICCB),
IBHE, and DHS failed to report information
required by the Federal Funding
Accountability and Transparency Act
(FFATA) for awards granted to
subrecipients of multiple programs.
Additionally, the Department of Public
Health (IDPH) and DCEO did not properly
report information required by FFATA for
grants awarded to subrecipients and did
not have adequate internal controls in
place to ensure all subawards were
accurately reported within required
timeframes.


INTRODUCTION

The Illinois Office of the Auditor General
conducted a Statewide Single Audit of the
FY25 federal grant programs.  The audit
was conducted in accordance with the
Uniform Guidance (Title 2 U.S. Code of
Federal Regulation Part 200, Uniform
Administration Requirements, Cost
Principles, and Audit Requirements for
Federal Awards).

The Statewide Single Audit includes State
agencies that are a part of the primary
government and expend federal awards.  In
total, 39 State agencies expended federal
financial assistance in FY25.  A separate
supplemental report has been compiled by
the Governor’s Office of Management and
Budget and provides summary information on
federal spending by State agency.  The
Statewide Single Audit does not include
those agencies that are defined as
component units such as the State
universities and finance authorities.  The
component units continue to have separate
single audits when required.

The Schedule of Expenditures of Federal
Awards (SEFA) reflects total expenditures
of approximately $40.0 billion for the
year ended June 30, 2025.  Overall, the
State participated in 365 different
federal programs; however, 10 of these
programs or program clusters accounted for
approximately 86.3% of the total federal
award expenditures.  (See Exhibit I in PDF
version of this digest)

The funding for the 365 programs was
provided by 25 different federal agencies.
Exhibit II shows that five federal
agencies provided Illinois with the vast
majority of federal funding in FY25.
(See Exhibit II in PDF version of this
digest)

A total of 34 federal programs or program
clusters were identified as major programs
in FY25.  A major program was defined in
accordance with the Uniform Guidance as
any program with federal awards expended
that meets certain criteria when applying
the risk-based approach.  Exhibit III
provides a brief summary of the number of
programs classified as “major” and “non-
major” and related federal award
expenditures. (See Exhibit III in PDF
version of this digest)


Ten State agencies accounted for
approximately 98.7% of all federal dollars
spent during FY25 as depicted in Exhibit
IV. (See Exhibit IV in PDF version of this
digest)

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE
FOR EACH MAJOR FEDERAL PROGRAM AND REPORT
ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY THE UNIFORM GUIDANCE

The auditors’ report contained adverse
opinions and qualifications on compliance
as summarized below.  The complete text of
the Auditors’ Report may be found on pages
26-34 of the audit.

Adverse Opinion

The auditors expressed an adverse opinion
on compliance for the following major
program: (Please see PDF version of this
digest for chart.)

Qualifications

The auditors qualified their report on
major programs for the following major
program due to a scope limitation.  The
auditors were unable to obtain sufficient
appropriate audit evidence supporting the
compliance of the State with requirements
described below. (Please see PDF version
of this digest for chart.)

The auditors qualified their report on
major programs for the following
noncompliance findings:
(Please see PDF version of this digest for
chart.)

Internal Control Over Financial Reporting

We noted matters involving internal
control over financial reporting for the
Schedule of Expenditures of Federal Awards
(Schedule) that were considered to be
material weaknesses.  A material weakness
is a deficiency, or combination of
deficiencies, in internal control over
financial reporting, such that there is a
reasonable possibility that a material
misstatement of the entity’s Schedule will
not be prevented, or detected and
corrected, on a timely basis.  The
auditors recommended the Governor’s Office
of Management and Budget (GOMB) work
together with the State agencies to
establish a corrective action plan to
address the quality of accounting
information provided to the Illinois
Office of Comptroller (IOC) which is used
by GOMB to prepare the Schedule.
Additionally, the auditors recommended the
Illinois State Board of Education (ISBE)
adhere strictly to federal cash management
regulations and the State’s Cash
Management Improvement Act agreement,
regardless of external concerns
surrounding federal funding status.

Internal Control Over Compliance

We noted certain matters involving
internal control over compliance that were
considered to be significant deficiencies.
A control deficiency in an entity’s
internal control over compliance exists
when the design or operation of a control
over compliance does not allow management
or employees, in the normal course of
performing their assigned functions, to
prevent, or detect and correct,
noncompliance with a type of compliance
requirement of a federal program on a
timely basis.  A significant deficiency in
internal control over compliance is a
deficiency, or combination of
deficiencies, in internal control over
compliance with a type of compliance
requirement of a federal program that is
less severe than a material weakness in
internal control over compliance, yet
important enough to merit attention by
those charged with governance.  Overall, 3
of the 53 findings reported in the single
audit were classified as significant
deficiencies.

Material weaknesses were also disclosed in
our report.  A material weakness in
internal control over compliance is a
deficiency, or combination of
deficiencies, in internal control over
compliance, such that there is a
reasonable possibility that material
noncompliance with a type of compliance
requirement of a federal program will not
be prevented, or detected and corrected,
on a timely basis.  Overall, 50 of the 53
findings reported in the single audit were
classified as material weaknesses.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

Exhibit V summarizes the number of report
findings by State agency, identifies the
number of repeat findings, and references
the findings to specific pages in the
report. (Please see Ex. V in the PDF
version of this digest.)

Exhibit VI summarizes the total number of
findings, number of repeated findings, and
the percentage of repeated findings for
the past ten years.  (Please see Ex. VI in
the PDF version of this digest.)

INADEQUATE PROCESS FOR COMPILING THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

The State of Illinois’ decentralized
financial reporting process prevents the
timely preparation of a complete and
accurate Schedule of Expenditures of
Federal Awards (SEFA). A lack of
centralized grants reporting, combined
with data accumulation issues at
individual agencies, caused significant
delays in finalizing the Statewide SEFA.

Currently, State agencies prepare
financial reporting packages designed by
the Illinois Office of Comptroller (IOC).
However, the accounting personnel
completing these packages within each
agency have varying levels of knowledge,
experience, and understanding of IOC
policies. Furthermore, these personnel are
not under the organizational control of
the IOC.

Although the IOC reviews these packages
during the Annual Comprehensive Financial
Report (ACFR) preparation, and the
Governor’s Office of Management and Budget
(GOMB) performs supervisory reviews over
the compiled cash basis SEFA data, the
current process lacks sufficient internal
controls to ensure timeliness and
accuracy. Consequently, late adjustments
to the SEFA continue to occur.

Additionally, during our audit procedures
over major programs, we frequently
identified significant reconciliation
differences between the expenditure
amounts reported on the SEFA, the cash
basis schedules and expenditure
populations provided to us for audit, and
the cash basis amounts reported on
required federal financial reports. The
State lacks a centralized grant management
or oversight function to identify,
reconcile, monitor, and resolve these
structural reporting discrepancies.

During fiscal year 2025, the State’s SEFA
compilation timeline again did not permit
the State to meet the March 31st single
audit filing deadline. GOMB provided an
initial draft of the SEFA on October 31,
2025; however, due to errors identified
during the completion of our audit
procedures across several agencies, the
final version of the SEFA was not
completed until July 31, 2026.  The notes
to the SEFA were provided for audit on
July 14, 2026. (Finding 1, pages 38-40).
This finding has been reported since 2022.

We recommended GOMB collaborate with the
State agencies and the IOC to establish
and execute a formal corrective action
plan to address the issues noted above.

GOMB accepted our recommendation and
stated it will continue to work with State
agencies to produce timely and accurate
financial reporting for the preparation of
the SEFA.

ILLINOIS STATE BOARD OF EDUCATION (ISBE)

We noted ISBE, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 29 of the Single Audit Report.
Additionally, ISBE had a material weakness
in internal controls over financial
reporting.

Specifically, ISBE did not calculate cash
requests for the Twenty-First Century
Community Learning Centers (21st Century)
and Student Support and Academic
Enrichment (SSAE) programs in accordance
with the requirements of 31 CFR part 205
(Treasury Regulations).

During our testing of cash requests
performed by ISBE during the year ended
June 30, 2025, we noted ISBE did not
perform its cash requests in accordance
with Treasury Regulations.  Specifically,
in January 2025, ISBE requested
$29,029,722 and $101,819,263 for the 21st
Century and SSAE programs, respectively.
These requests represented the entire
remaining amount of available grant
funding and did not reflect the immediate
cash needs of the programs at the time the
requests were made.  Consequently, ISBE
held significant excess federal cash
balances in its accounts for most of the
remainder of the fiscal year. (Finding 2,
pages 41-43; Finding 4, pages 50-51)

The material noncompliance noted resulted
in a qualified opinion on compliance for
the 21st Century and SSAE programs.   The
weakness noted was also reported as a
material weakness in internal control over
financial reporting for all of ISBE’s
federal programs. ISBE accepted our
recommendations.

ILLINOIS DEPARTMENT OF TRANSPORTATION
(IDOT)

We noted IDOT, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 29 of the Single Audit Report.

Specifically, IDOT did not adequately
review single audit reports received from
its subrecipients for the Highway Planning
and Construction (HPC) program on a timely
basis.  Additionally, IDOT has not
established controls over subrecipient
single audit reviews at an adequate level
of precision to ensure single audit
reporting requirements, including
obtaining and reviewing single audit
reporting packages, issuing management
decision letters, and invoking stop
payment actions, are performed within
required timeframes. (Finding 8, pages
59-61)
The material noncompliance noted resulted
in a qualified opinion on compliance for
the HPC program.  IDOT accepted our
recommendations.

ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY
(IDES)

We noted IDES, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 29 of the Single Audit Report.
Specifically, we noted the following:

• IDES failed to follow established
policies when making eligibility
determinations for claimants of the
Unemployment Insurance (UI) program.
Additionally, we noted adequate internal
controls have not been established to
ensure necessary changes resulting from
the conclusion of pandemic related
provisions are made to UI eligibility
procedures in a timely manner. (Finding
10, pages 64-66) This finding has been
reported since 2023.

• IDES does not have an adequate process
in place to ensure that the ETA 9130
financial reports prepared for the UI
program are complete and accurate.
During our test work of 25 ETA 9130
reports, we noted certain grant awards had
inaccurate amounts reported for key line
items for the September 30, 2024,
reporting quarter. We also noted IDES does
not perform analytical or other procedures
over previously reported information or
expectations relative to current program
activities. Additionally, supervisory
review procedures are not designed to
operate at a level of precision to
identify errors of this nature. (Finding
11, pages 67-69) This finding has been
reported since 2022.

• IDES did not complete the Benefit
Accuracy Measurement (BAM) case file
reviews in accordance with United States
Department of Labor (USDOL) requirements
for the UI program. Further, we noted IDES
has not established adequate controls to
ensure BAM case file review procedures are
completed within timeframes established by
the USDOL. (Finding 13, pages 72-74)

The material noncompliance noted resulted
in a qualified opinion on compliance for
the UI program. IDES accepted our
recommendations.

DEPARTMENT OF COMMERCE AND ECONOMIC
OPPORTUNITY (DCEO)

We noted DCEO, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 29 of the Single Audit Report.
Specifically, we noted the following:

• DCEO did not properly review or re-
certify the accuracy of the clearance
pattern specified in the Treasury-State
Agreement related to cash draws for the
Low Income Home Energy Assistance Program
(LIHEAP). Additionally, we noted internal
controls have not been established to
ensure clearance patterns are calculated
and recertified in accordance with
Treasury regulations. (Finding 17, pages
82-83) This finding has been reported
since 2023.
• DCEO did not perform its cash draws in
accordance with the funding technique
prescribed in the Treasury-State Agreement
(TSA). Additionally, we noted internal
controls have not been established to
ensure cash draws are calculated and
requested in accordance with Treasury
regulations and the funding technique
prescribed by the TSA. (Finding 18, pages
84-86) This finding has been reported
since 2023.
The material noncompliance noted resulted
in a qualified opinion on compliance for
the LIHEAP program.  DCEO accepted our
recommendations.

ILLINOIS EMERGENCY MANAGEMENT AGENCY AND
DEPARTMENT OF HOMELAND SECURITY (IEMA-OHS)

We noted IEMA-OHS, as the administering
State agency, did not materially comply
with specific compliance requirements
described on page 29 of the Single Audit
Report.

Specifically, we noted IEMA-OHS has not
established effective internal controls or
documented procedures to ensure
subrecipients of the Disaster Grants -
Public Assistance (Public Assistance)
program perform audits required by the
Uniform Guidance. As a result of these
deficiencies, IEMA-OHS could not
demonstrate whether its subrecipients
complied with Uniform Guidance audit
requirements, nor could it verify whether
required management decisions on
subrecipient audit findings were issued
within the federally mandated timeframes.
(Finding 20, pages 90-93)
The material noncompliance noted resulted
in a qualified opinion on compliance for
the Public Assistance program.  IEMA-OHS
accepted our recommendations.

ILLINOIS DEPARTMENT ON AGING (IDOA)

We noted IDOA, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 30 of the Single Audit Report.

Specifically, IDOA did not issue
management decision letters for single
audit report findings for subrecipients of
the Aging Cluster program within required
timeframes.  Additionally, IDOA had not
established controls over subrecipient
single audit reviews at an adequate level
of precision to ensure single audit
reporting requirements and the issuance of
management decision letters are performed
within required timeframes. (Finding 23,
pages 100-102)

The material noncompliance noted resulted
in a qualified opinion on compliance for
the Aging Cluster.  IDOA accepted our
recommendations.

DEPARTMENT OF CHILDREN AND FAMILY SERVICES
(DCFS)

We noted DCFS, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 30 of the Single Audit Report.

Specifically, we noted DCFS could not
provide adequate supporting documentation
to substantiate payroll and related costs
claimed for federal reimbursement under
the Foster Care – Title IV-E (Foster
Care), Adoption Assistance, and Temporary
Assistance for Needy Families (TANF)
programs.  Additionally, we noted the
controls to ensure required documentation
is obtained to support payroll and related
costs and maintained to evidence
management approval of payroll information
were not operating effectively.  We also
noted adequate internal controls have not
been established to ensure the data
included in the timekeeping system and
used to allocate personal services
expenditures to Foster Care, Adoption
Assistance, TANF, and other programs
operated by DCFS is consistent with the
hours reported on manual timesheets
prepared by the employees and approved by
supervisor. (Finding 24, pages 103-105)

The material noncompliance noted resulted
in a qualified opinion on compliance for
the Foster Care, Adoption Assistance, and
TANF programs. DCFS accepted our
recommendations.

ILLINOIS BOARD OF HIGHER EDUCATION (IBHE)

We noted IBHE, as the administering State
agency, did not materially comply with
specific requirements described on page 30
of the Single Audit Report.

IBHE did not have an adequate process in
place to ensure required award information
is accurately communicated to
subrecipients of the Child Care
Development Fund (CCDF) Cluster (CCDF
Cluster) program. (Finding 28, pages
113-114)

The material noncompliance noted resulted
in a qualified opinion on compliance for
the CCDF program. IBHE accepted our
recommendation.

ILLINOIS DEPARTMENT OF HUMAN SERVICES
(IDHS)

We noted IDHS, as the administering State
agency, did not materially comply with
specific compliance requirements described
on pages 30-31 of the Single Audit Report.
Specifically, we noted the following:

• IDHS did not retain transaction-level
detail for beneficiary payments under the
Summer Electronic Benefits Transfer
Program for Children (Summer EBT) program.
Due to the absence of transaction-level
records, we were unable to conclude on
IDHS’ compliance with federal requirements
applicable to the Summer EBT program.
(Finding 29, pages 115-117)

• IDHS did not adequately review the
recipient agencies of the Food
Distribution Cluster (FDC) program.
(Finding 30, pages 118-119)

• IDHS could not provide documentation to
support payments made on behalf of
beneficiaries of the Temporary Assistance
for Needy Families (TANF) and Child Care
and Development Fund (CCDF) Cluster
programs. As a result, we identified these
items as unallowable costs.  Additionally,
DHS was unable to provide documentation
supporting that an advance payment to a
subrecipient was expended within the
federal period of performance. (Finding
31, pages 120-123) This finding has been
reported since 2023.

• IDHS could not locate case file
documentation supporting certain
eligibility and special test requirements
for beneficiaries of the TANF, Children’s
Health Insurance Program (CHIP), and
Medicaid Cluster program. We also noted
the State does not have adequate resources
to perform and document eligibility
determinations. Additionally, the State
has not established appropriate monitoring
procedures to ensure eligibility
determinations are properly documented in
accordance with program requirements.
Because the State uses a single
application and eligibility determination
process for the Supplemental Nutrition
Assistance Program Cluster (SNAP), TANF,
Medicaid Cluster, and CHIP programs, the
TANF and CHIP eligibility compliance
exceptions and the inadequate internal
control matters discussed above also
impact the SNAP Cluster program. (Finding
32, pages 124-127)   This finding has been
reported since 2001.

• IDHS made improper payments to
beneficiaries of the TANF program. We
further noted IDHS did not establish
control procedures at an adequate level of
precision to ensure TANF program benefits
were accurately calculated based on the
beneficiary’s case file supporting
documentation. (Finding 33, pages 128-130)
This finding has been reported since 2023.

• IDHS does not have an adequate process
for monitoring interagency expenditures
claimed under or used to meet maintenance
of effort (MOE) requirements of the WIC
Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC), TANF
and CCDF programs. (Finding 34, pages
131-134) This finding has been reported
since 2023.

• IDHS did not follow its established
program monitoring policies and procedures
for subrecipients of the TANF, CCDF,
Social Services Block Grant (SSBG), and
Block Grants for Prevention and Treatment
of Substance Abuse (SAPT) programs.
Further, IDHS did not have adequate
policies or procedures to ensure fiscal
and administrative reviews were completed
timely to detect potential noncompliance.
(Finding 35, pages 135-139) This finding
has been reported since 2011.

• IDHS does not have an adequate process
in place to ensure required award
information is accurately communicated to
subrecipients of the WIC, TANF, CCDF,
SSBG, and SAPT programs. (Finding 37,
pages 143-145)

• IDHS did not perform monitoring reviews
of health and safety requirements for
providers of the CCDF program. We also
noted IDHS has not established monitoring
or other control activities to ensure
health and safety monitoring reviews are
performed for all child care providers as
required by State and Federal law.
Additionally, as of the date of our
testing, IDHS has not evaluated the
population of providers to determine if
there are other providers for which
reviews were not performed. (Finding 38,
pages 146-147)

• IDHS does not have an adequate process
in place to ensure the ACF-204, Annual
special report for the TANF program is
complete and accurate. We also noted IDHS
does not perform analytical or other
procedures during the report preparation
process to ensure amounts reported are
reasonable in relation to previously
reported information or expectations
relative to current program activities.
Additionally, supervisory review
procedures are not designed to operate at
a level of precision to identify errors of
this nature. (Finding 39, pages 148-149)

• IDHS did not maintain or provide
supporting documentation for the post-
expenditure report including a key line
item, the number of eligible individuals
who received services paid for in part or
in whole with federal funds under the SSBG
program. Effective internal controls have
not been established to ensure supporting
documentation is maintained for data
reported in the post-expenditure report
key line items. (Finding 40, pages
150-151)   This finding has been reported
since 2023.

• IDHS does not have an adequate process
in place to ensure the Case Service Report
(RSA-911) performance report for the
Rehabilitation Services Vocational
Rehabilitation Grants to States
(Vocational Rehabilitation) program is
complete and accurate. We further noted
the supervisory review procedures
performed for this report were not
designed to operate at an appropriate
level of precision to ensure the special
report was accurately prepared. (Finding
41, pages 152-153)

The material noncompliance noted resulted
in an adverse opinion on compliance for
the FDC and qualified opinions on
compliance for the Summer EBT, TANF, CCDF,
CHIP, Medicaid Cluster, WIC, SSBG, SAPT,
and Vocational Rehabilitation programs.

IDHS disagreed with Finding 29, stating
the IDHS and its partners maintain
detailed records of beneficiaries and the
data will be made available in future
inquiries.  The auditors commented the
transaction level detail requested was not
available prior to completion of the
audit.

IDHS partially accepted the recommendation
for Finding 31, stating it does not agree
that an evaluation of the criteria for
monitoring child care providers is
necessary.  The auditors commented that
IDHS relies on supporting organizations to
monitor providers and monitors the
supporting organizations on a cyclical
basis.  IDHS has not updated its risk
assessments or evaluated the nature and
frequency of monitoring processes in
response to increased risk in the CCDF
Cluster program.

IDHS accepted our recommendations for
findings 30, 32-35, and 37-41.

ILLINOIS DEPARTMENT OF HEALTHCARE AND
FAMILY SERVICES (DHFS)

We noted DHFS, as the administering State
agency, did not materially comply with
specific compliance requirements described
on page 31-32 of the Single Audit Report.
Specifically, we noted the following:

• DHFS improperly continued providing
benefits under the Children’s Health
Insurance Program (CHIP) program to
individuals who were over the age of 18.
In addition, we noted DHFS has not
established adequate controls to identify
and remove individuals over the age of 18
from the CHIP program and to determine if
they are eligible for benefits under the
Medicaid Cluster program. (Finding 43,
pages 158-159) This finding has been
reported since 2022.

• DHFS could not provide sufficient
supporting documentation to evidence that
certain expenditures claimed under the
CHIP and Medicaid Cluster programs were
disbursed (paid) during the year ended
June 30, 2025.  We also noted DHFS has not
established internal controls at a
sufficient level of precision to ensure
evidence supporting amounts claimed under
the CHIP and Medicaid Cluster programs
were paid by the IOC during the fiscal
year.  In addition to the exception items
noted above, we noted significant time and
effort was spent by DHFS and other State
agencies to provide payment information
for several transactions sampled in our
testing because DHFS’ records did not
include sufficient detail to identify the
payment in the IOC’s records which delayed
the completion of our audit procedures.
(Finding 44, pages 160-163)

• DHFS did not consistently and
sufficiently document the rates charged
for medical services expenditures charged
to the CHIP and Medicaid Cluster programs.
We also noted DHFS’ controls over the
determination of the rates used for
medical services provided under the CHIP
and Medicaid Cluster programs do not
operate at an appropriate level of
precision to ensure they are properly
calculated and supported.  DHFS also lacks
adequate systemic or manual internal
controls to ensure claims are
automatically or manually routed to the
correct DRG pricing calculator based on
the applicable service date. (Finding 45,
pages 164-166)

• DHFS has not established adequate
procedures to ensure providers of the
Medicaid Cluster program meet all of the
State and Federal provider eligibility
requirements.  (Finding 46, pages 167-169)
This finding has been reported since 2021.

• DHFS did not properly report monetary
recoveries of overpayments identified by
the Medicaid Fraud Control Unit (MFCU) on
its quarterly CMS-64 report. We also noted
DHFS has not established internal controls
at a sufficient level of precision to
ensure all overpayments identified and
recovered by the MFCU are communicated,
tracked, and properly reported on the
quarterly CMS-64 report. Specifically,
there is no formal reconciliation process
between the Attorney General's recovery
records, the MFCU closed-case database,
and the overpayment amounts reported on
the CMS-64 report. (Finding 47, pages
170-171)

• DHFS did not ensure the annual financial
audits prepared during the year ended June
30, 2025 for Managed Care Organizations
(MCOs) of the Children’s Health Insurance
Program (CHIP) and Medicaid Cluster
programs met the requirements of the MCO
contracts and federal regulations.
(Finding 48, pages 172-174)   This finding
has been reported since 2023.

• DHFS did not perform certain Medicaid
Cluster program drug rebate activities
within required timeframes. We also noted
DHFS has not established adequate internal
control procedures to ensure drug rebate
activities are performed within required
timeframes and appropriate corrective
actions are taken.  (Finding 49, pages
175-177)

• DHFS did not accurately report certain
Medicaid Cluster program drug rebates on
quarterly federal financial (CMS 64)
reports. Additionally, in considering the
reporting process for the CMS-64 report,
we noted DHFS does not perform analytical
or other procedures during the report
preparation process at a level of
precision to ensure amounts reported are
reasonable in relation to previously
reported information or expectations
relative to current program activities.
(Finding 50, pages 178-181) This finding
has been reported since 2023.

• DHFS failed to conduct utilization
reviews over Home and Community Based
Waiver Services (HCBS) services for the
nine waivers contracted out to its vendor
during fiscal year 2025. (Finding 51,
pages 182-184) This finding has been
reported since 2023.

• DHFS could not locate case file
documentation supporting certain
eligibility requirements for beneficiaries
of the Children’s Health Insurance Program
(CHIP) and Medicaid Cluster program.  We
also noted the State does not have
adequate resources to perform and document
eligibility determinations. Additionally,
the State has not established appropriate
monitoring procedures to ensure
eligibility determinations are properly
documented in accordance with program
requirements. (Finding 53, pages 187-189)

The material noncompliance noted resulted
in qualified opinions on compliance for
the Medicaid Cluster and CHIP.

DHFS accepted our recommendations for
findings 43, 47, 49, 51, and 53.

DHFS partially accepted the recommendation
for Finding 44, stating it believes it can
support the proper payment and federal
claiming; however, due to time pressures
further audit procedures were foregone.
The auditors commented the documentation
provided for the transactions was not
sufficient to permit the auditors to
ascertain accurate payments were made
during the audit period.  The State spent
significant time and effort to research
and provide documentation supporting
payment details during the audit process
which should have been readily available
in accordance with federal requirements.

DHFS partially accepted the recommendation
for Finding 45, stating the audit requests
were received late in the audit process
and involved significant research and
cooperation with other State agencies, and
therefore, were not able to be resolved
prior to established deadlines for audit
completion. DHFS further stated that as of
the date of this response, DHFS believes
it can support the rates in question;
however, due to external time pressures
further audit procedures were forgone.
Auditors commented the documentation
provided was not sufficient to permit us
to ascertain accurate payment rates were
used during the audit period.  The State
spent significant time and effort to
research and provide documentation
supporting payment details during the
audit process.  Documentation should be
readily available to support the payments
rates used for expenditures charged to
federal programs.

DHFS partially accepted the recommendation
for Finding 46, stating that the Illinois
Department of Public Health is charged
with licensing and surveying of
facilities.  Auditors commented DHFS is
designated by the State of Illinois as the
Statewide Medicaid Agency and is
responsible for ensuring expenditures
charged to the Medicaid program meet all
applicable federal requirements, including
provider eligibility requirements.
Documentation to support a valid license
as of the date of the service was not
provided for all sample items selected for
our audit procedures.

DHFS stated it accepts the recommendation
for Finding 48 but also stated it believes
it acted in accordance with federal
regulations.   Auditors commented that
DHFS has not received fully compliant GAAP
reports for the past several years and did
not seek to obtain corrected reports for
previous periods during State fiscal year
2025.  Our audit procedures cover
compliance activities during the State’s
fiscal year and do not extend to future
periods.

DHFS disagreed with the recommendation for
Finding 50, stating it believes it
received the necessary federal approvals
for its CMS-64 report via a Good Cause
Waiver.  The auditors commented the good
cause waiver did not approve the reporting
methodology used and the instructions for
the CMS-64 report do not prescribe
reporting requirements for the types of
errors reported by DHFS.

FAILURE TO REPORT SUBAWARD INFORMATION
REQUIRED BY FFATA

IDOT, IEMA-OHS, IDOA, Illinois Community
College Board (ICCB), IBHE, and DHS failed
to report information required by the
Federal Funding Accountability and
Transparency Act (FFATA) for awards
granted to subrecipients of multiple
programs.  Additionally, the Department of
Public Health (IDPH) and DCEO did not
properly report information required by
FFATA for grants awarded to subrecipients
and did not have adequate internal
controls in place to ensure all subawards
were accurately reported within required
timeframes.

The State is required to report certain
identifying information related to awards
made to subrecipients in amounts greater
than or equal to $30,000.  Of the
information required to be reported, the
following key data elements are required
to be audited:

1. Subawardee Name
2. Subawardee Unique Entity Identifier
3. Amount of subaward
4. Subaward obligation or action date
5. Date of report submission
6. Subaward number
7. Subaward project description
8. Subawardee names and compensation of
highly compensated officers

Failure to identify awards subject to
FFATA and to report subawards in
accordance with FFATA results in
noncompliance with federal requirements.
(Finding 7, pages 56-58; Finding 15, pages
77-79; Finding 19, pages 87-89; Finding
21, pages 94-96; Finding 22, pages 97-99;
Finding 26, pages 108-110; Finding 27,
pages 111-112; Finding 36, pages 140-142)

The material noncompliance described above
resulted in qualified opinions on the
Airport Improvement, Workforce Innovation
and Opportunity Act (WIOA) Cluster,
LIHEAP, Homeland Security Grant, Public
Assistance, Immunization Cooperative
Agreements, and Epidemiology and
Laboratory Capacity for Infectious
Diseases, Aging Cluster, CCDF, TANF, SSBG,
and SAPT programs.

We recommended the agencies establish
procedures to identify awards subject to
FFATA reporting requirements and report
required subaward information in
accordance with FFATA.  Additionally, we
recommended IDPH and DCEO establish and
formalize procedures and controls to
identify awards and amendments subject to
FFATA reporting requirements and ensure
the required subaward information is
reported accurately and timely in
accordance with FFATA.

ICCB disagreed with the finding and
recommendation, stating the failure to
report is not attributable to ICCB. The
auditors commented ICCB is part of the
primary government of the State of
Illinois and executed subawards relative
to a first-tier award under the CCDF
Cluster which are required to be reported
by the State according to 2 CFR 170.200.

The other agencies, DCEO, and IDPH
accepted our recommendations.

OTHER FINDINGS

The remaining findings pertain to other
noncompliance and internal control
matters.  We will follow up on the status
of corrective action on all findings in
our next Statewide Single Audit for the
year ended June 30, 2026.

AUDITORS’ OPINION

The auditors stated the Schedule of
Expenditures of Federal Awards for the
State of Illinois as of and for the year
ended June 30, 2025, is presented fairly
in all material respects.

This single audit was conducted by KPMG
LLP.

DENNIS M. GIBBONS
Division Director

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

CHRISTOPHER B. MEISTER
Auditor General

CBM:MEG