Full text
DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C. 20220
OFFICE OF
June 26, 2023
INSPECTOR GENERAL
MEMORANDUM FOR JESSICA MILANO, ACTING CHIEF RECOVERY OFFICER,
DEPARTMENT OF THE TREASURY
FROM:
Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT:
Desk Review of State of Illinois’ Use of Coronavirus
Relief Fund Proceeds (OIG-CA-23-019)
Please find the attached desk review memorandum1 on State of Illinois’ use of
Coronavirus Relief Fund (CRF) proceeds. The CRF is authorized under Title VI of
the Social Security Act, as amended by Title V, Division A of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act). Under a contract monitored by
our office, Castro & Company, LLC (Castro), a certified independent public
accounting firm, performed the desk review. Castro performed the desk review in
accordance with the Council of the Inspectors General on Integrity and Efficiency,
Quality Standards for Federal Offices of Inspector General standards of
independence, due professional care, and quality assurance.
In its desk review, Castro found that the State of Illinois personnel timely
completed the required quarterly Financial Progress Reports (FPR) for Cycles 12
through 5.3 Castro personnel reviewed documentation for a selection of 82
transactions reported in the quarterly reports.
Based on the results of Castro’s desk review, Illinois’ documentation supporting
the uses of CRF proceeds comply with the CARES Act and Treasury’s Guidance.
Additionally, Castro determined Illinois’ risk of unallowable use of funds to be low.
As such, Castro is not recommending Treasury Office of Inspector General
perform an audit of the State of Illinois.
In connection with our contract with Castro, we reviewed Castro’s desk review
memorandum and related documentation and inquired of its representatives. Our
review, as differentiated from an audit performed in accordance with generally
1 The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) assigned the Department of
the Treasury Office of Inspector General with responsibility for compliance monitoring and
oversight of the receipt, disbursement, and use of Coronavirus Relief Fund (CRF) payments. The
purpose of the desk review is to perform monitoring procedures of the prime recipient’s receipt,
disbursement, and use of CRF proceeds as reported in the grants portal on a quarterly basis.
2 Calendar quarter ending June 30, 2020.
3 Calendar quarter ending June 30, 2021.
Page 2
accepted government auditing standards, was not intended to enable us to
express an opinion on the State of Illinois’ use of the CRF proceeds. Castro is
responsible for the attached desk review memorandum and the conclusions
expressed therein. Our review found no instances in which Castro did not comply
in all material respects with the Quality Standards for Federal Offices of Inspector
General.
We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
Attachment
cc:
Michelle. A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Victoria Collin, Chief Compliance & Finance Officer, Office of Recovery
Programs, Department of the Treasury
Alicia Tate-Nadeau, Director, Illinois Emergency Management
Wayne Ference, Partner, Castro & Company, LLC
Castro Company
Auditors
✓ Advisors
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
Desk Review of the State of Illinois
June 26, 2023
OIG-CA-23-019
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM:
Wayne Ference
Partner, Castro & Company, LLC
SUBJECT:
Desk Review of the State of Illinois
On September 3, 2021, we initiated a desk review of the State of Illinois’ (Illinois)
use of the Coronavirus Relief Fund (CRF) authorized under Title VI of the Social
Security Act, as amended by Title V Division A of the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act).1 The objective of our desk review was to
evaluate Illinois’ documentation supporting its uses of CRF proceeds as reported
in the GrantSolutions2 portal and to assess the risk of unallowable use of funds.
The scope of our desk review was limited to obligation and expenditure data for
the period of March 1, 2020 through June 30, 2021 as reported in Cycles 13
through 54 in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed Illinois’ quarterly Financial Progress Reports (FPRs) submitted in
the GrantSolutions portal through June 30, 2021;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021;5
1 P.L. 116-136 (March 27, 2020).
2 GrantSolutions, a grant and program management Federal shared service provider under the
U.S. Department of Health and Human Services, developed a customized and user-friendly
reporting solution to capture the use of CRF payments from recipients.
3 Calendar quarter ending June 30, 2020.
4 Calendar quarter ending June 30, 2021.
5 Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
1
Desk Review of the State of Illinois
3) reviewed Treasury’s Office of Inspector General (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and
Recordkeeping;6
4) reviewed Treasury OIG’s monitoring checklists7 of Illinois’ quarterly FPR
submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit reports, and
those issued by the Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may
pose risk or impact Illinois’ uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations (OI), the Council of the
Inspectors General on Integrity and Efficiency Pandemic Response
Accountability Committee (PRAC),8 and Treasury OIG Office of Counsel
input on issues that may pose risk or impact Illinois’ uses of CRF proceeds;
7) interviewed key personnel responsible for preparing and certifying Illinois’
GrantSolutions portal quarterly FPR submissions, as well as officials
responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of Contracts, Grants, Transfers,9 Direct
Payments, Aggregate Reporting,10 and Aggregate Payments to Individuals11
data identified through GrantSolutions reporting; and
9) evaluated documentation and records used to support Illinois’ quarterly
FPRs.
6 Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping OIG-20-028R; March 2, 2021.
7 The checklists are used by Treasury OIG to monitor the progress of prime recipient reporting in
the GrantSolutions portal. GrantSolutions quarterly submission reviews are designed to identify
material omissions and significant errors, and where necessary, include procedures for notifying
prime recipients of misreported data for timely correction. Treasury OIG follows the CRF Prime
Recipient Quarterly GrantSolutions Submissions Monitoring and Review Procedures Guide, OIG
CA-20-029R to monitor the prime recipients quarterly.
8 Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
within the Council of the Inspectors General on Integrity and Efficiency to promote transparency
and conduct and support oversight of covered funds (see Footnote 18 for a definition of covered
funds) and the coronavirus response to (1) prevent and detect fraud, waste, abuse, and
mismanagement; and (2) mitigate major risks that cut across program and agency boundaries.
9 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
10 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in
the GrantSolutions portal. Transactions less than $50,000 can be reported as an aggregate lump-
sum amount by type (contracts, grants, loans, direct payments, and transfers to other government
entities).
11 Obligations and expenditures for payments made to individuals, regardless of amount, are
required to be reported in the aggregate in the GrantSolutions portal to prevent inappropriate
disclosure of personally identifiable information.
2
Desk Review of the State of Illinois
Based on the results of our desk review, Illinois’ documentation supporting the
uses of CRF proceeds complies with the CARES Act and Treasury’s Guidance.
Additionally, we determined that Illinois’ risk of unallowable use of funds to be
low. As such, Castro is not recommending Treasury OIG perform an audit of
Illinois.
Non-Statistical Transaction Selection Methodology
Treasury issued a CRF payment to Illinois of $3,518,945,365.70. As of June 30,
2021, the State of Illinois’ cumulative obligations and expenditures were
$3,010,760,293.59 and $2,158,279,242.22, respectively. The State of Illinois’
cumulative obligations and expenditures by payment type as reported in
GrantSolutions through Cycle 512 are summarized below:
Payment Type
Cumulative
Cumulative
Obligations
Expenditures
Contracts >= $50,000
$
472,875,684.10
$
374,097,408.31
Grants >= $50,000
$
621,517,798.15
$
572,182,532.10
Loans >= $50,000
$
-
$
-
Transfers >= $50,000
$
136,533,114.10
$
134,278,492.32
Direct Payments >= $50,000
$
685,987,252.45
$
-
Aggregate Reporting < $50,000
$
456,234,758.42
$
443,599,212.20
Aggregate Payments to Individuals (Any
Amount)
$
637,611,686.37
$
634,121,597.29
Totals
$ 3,010,760,293.59
$ 2,158,279,242.22
Castro made a non-statistical selection of Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Transfers greater than or equal
to $50,000, Direct Payments greater than or equal to $50,000, Aggregate Reporting
less than $50,000, and Aggregate Payments to Individuals. Selections were made
using auditor judgment based on information and risks identified in reviewing
audit reports, the GrantSolutions portal reporting anomalies13 identified by the
Treasury OIG CRF monitoring team, and review of Illinois’ FPR submissions.
Castro noted Illinois did not obligate or expend CRF proceeds to Loans greater
than or equal to $50,000, therefore, we did not make a selection of transactions
from this category.
The number of transactions (34) we selected to test were based on Illinois’ total
CRF award amount and our overall risk assessment of Illinois. To allocate the
number of transactions (34) by obligation type (Contracts greater than or equal to
12 Calendar quarter ending June 30, 2021.
13 Treasury OIG has a pre-defined list of risk indicators that are triggered based on data submitted
by recipients in the FPR submissions that meet certain criteria. Castro reviewed these results
provided by Treasury OIG for Illinois.
3
Desk Review of the State of Illinois
$50,000, Grants greater than or equal to $50,000, Direct Payments greater than or
equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals), we compared the obligation type dollar amounts as a
percentage of cumulative obligations for Cycle 5.14
Additionally, Treasury OIG identified 48 anomaly transactions which we tested, for
a total of 82 transactions tested. Forty-six (46) of the anomalies were potential
duplicate payments, and two of the anomalies were outliers. We included two
potential duplicate payments from the Contracts greater than or equal to $50,000
obligation type and 44 potential duplicate payments from the Grants greater than
or equal to $50,000 obligation type. The two outlier payments15 were related to the
Contracts greater than or equal to $50,000 obligation type.
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States and certain local
governments; the District of Columbia and U.S. Territories, including the
Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands; and Tribal
governments. Treasury issued a CRF payment to Illinois for $3,518,945,365.70. The
CARES Act stipulates that a recipient may only use the funds to cover costs that—
(1) are necessary expenditures incurred due to the public health emergency
with respect to the coronavirus disease 2019 (COVID-19);
(2) were not accounted for in the budget most recently approved as of
March 27, 2020; and
(3) were incurred between March 1, 2020 and December 31, 2021.16
14 Calendar quarter ending June 30, 2021.
15 The two outliers for the Contracts greater than or equal to $50,000 obligation type related to
funds used for configuration of a contact tracing system in response to mitigation of COVID-19.
These were identified by the Treasury OIG CRF monitoring team as outliers because the
transactions were identified as having high dollar amounts relative to transactions at similar points
in time, with similar award descriptions, and that were disbursed by the same prime recipient.
16 P.L. 116-260 (December 27, 2020). The period of performance end date of the CRF was extended
through December 31, 2021 by the Consolidated Appropriations Act, 2021. The period of
performance end date for tribal entities was further extended to December 31, 2022 by the State,
Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act,
Division LL of the Consolidated Appropriations Act, 2023, P.L. 117-328, December 29, 2022, 136
Stat. 4459.
4
Desk Review of the State of Illinois
Section 15011 of the CARES Act, requires each covered recipient17 to submit to
Treasury and the PRAC, no later than 10 days after the end of each calendar
quarter, a report that contains (1) the total amount of large covered funds18,19
received from Treasury; (2) the amount of large covered funds received that were
expended or obligated for each project or activity; (3) a detailed list of all projects
or activities for which large covered funds were expended or obligated; and (4)
detailed information on any level of subcontracts or sub-grants awarded by the
covered recipient or its sub-contractees or sub-grantees.
The CARES Act assigned Treasury OIG the responsibility for compliance
monitoring and oversight of the receipt, disbursement, and use of CRF proceeds.
Treasury OIG also has authority to recoup funds in the event that it is determined
a recipient failed to comply with requirements of subsection 601(d) of the Social
Security Act, as amended, (42 U.S.C. 801(d)).
Desk Review Results
Our review of Illinois’ quarterly FPR submissions through June 30, 2021 did not
identify any issues with timeliness of FPR submissions. Transactions selected for
detailed review were supported by documentation and were allowable
expenditures in accordance with the CARES Act and Treasury’s guidance. We also
noted that the Contracts greater than or equal to $50,000, Grants greater than or
equal to $50,000, Transfers greater than or equal to $50,000, Direct Payments
greater than or equal to $50,000, Aggregate Reporting less than $50,000, and
Aggregate Payments to Individuals tested were necessary expenditures due to the
COVID-19 public health emergency, were not accounted for in the budget most
recently approved as of March 27, 2020, and were incurred during the covered
period. The transactions selected for testing were not selected statistically, and
therefore results cannot be extrapolated to the total universe of transactions.
The following table includes the total cumulative expenditure population amount
and the cumulative expenditure amount tested. Additionally, this table includes a
summary of Castro’s testing results over cumulative expenditure transaction
balances. Within the “Exception Noted: IPA [Independent Public Accountant]
Recommended for Treasury OIG Follow-up” section of this table, we have
17 Section 15011 of P.L. 116-136 defines a covered recipient as any entity that receives large
covered funds and includes any State, the District of Columbia, and any territory or possession of
the United States.
18 Section 15010 of P.L. 116-136 defines covered funds as any funds, including loans, that are made
available in any form to any non-Federal entity, not including an individual, under Public Laws 116
123, 127, and 136, as well as any other law which primarily makes appropriations for Coronavirus
response and related activities.
19 Section 15011 of P.L. 116-136 defines large covered funds as covered funds that amount to more
than $150,000.
5
Desk Review of the State of Illinois
included that there were no unsupported and ineligible exceptions noted or
identified as questioned costs as a result of our desk review. Additionally, in the
far-right column, we have identified the cumulative expenditures that Castro
tested without exceptions noted.
Summary of Expenditure Testing and Recommended Results As of Cycle 520
Payment Type
Cumulative
Expenditures
Amount
Cumulative
Expenditures
Tested Amount
Exception Noted: IPA
Recommended for Treasury OIG
Follow up
Castro Reviewed
Value Without
Exception (per
support)
Unsupported
Ineligible
Contracts >=
$50,000
$
374,097,408.31
$ 95,241,763.83
$
-
$
-
$
95,241,763.83
Grants >=
$50,000
$
572,182,532.10
$ 61,255,133.57
$
-
$
-
$
61,255,133.57
Loans >=
$50,000
$
-
$
-
$
-
$
-
$
-
Transfers >=
$50,000
$
134,278,492.32
$
4,744,387.00
$
-
$
-
$
4,744,387.00
Direct Payments
>= $50,00021
$
-
$ 103,493,426.74
$
-
$
-
$ 103,493,426.74
Aggregate
Reporting <
$50,000
$
443,599,212.20
$
135,499.60
$
-
$
-
$
135,499.60
Aggregate
Payments to
Individuals (in
any amount)
$
634,121,597.29
$ 108,937,153.30
$
-
$
-
$ 108,937,153.30
Totals
$ 2,158,279,242.22
$ 373,807,364.04
$
$
$ 373,807,364.04
20 Calendar quarter ending June 30, 2021.
21 The expenditures for this payment type were zero as of June 30, 2021, but Castro tested the
balance as of March 31, 2022 in order to get expenditure testing coverage for our desk review.
6
Desk Review of the State of Illinois
Conclusion
Based on our review of Illinois’ documentation supporting the uses of CRF
proceeds as reported in the GrantSolutions portal, we determined that
Contracts greater than or equal to $50,000, Grants greater than or equal to
$50,000, Direct Payments greater than or equal to $50,000, Transfers greater than
or equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals complied with the CARES Act and Treasury’s Guidance.
Additionally, we determined Illinois’ risk of unallowable use of funds to be low. As
such, Castro is not recommending Treasury OIG perform an audit of Illinois.
****
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which require that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented.22 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
22 https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf
7