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Home My WebLink About2021 Single Audit CITY OF EVANSTON, ILLINOIS Single Audit Report For the Year Ended December 31, 2021 TABLE OF CONTENTS Independent Auditors’ Report on Schedule of Expenditures of Federal Awards 1-2 Schedule of Expenditures of Federal Awards 3-4 Notes to Schedule of Expenditures of Federal Awards 5-7 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 8-10 Schedule of Findings and Questioned Costs 11-16 Management’s Corrective Action Plan 17 1 INDEPENDENT AUDITORS’ REPORT The Honorable Daniel Biss, Mayor and Members of the City Council Evanston, Illinois Report on the Audit of the Schedule of Expenditures of Federal Awards Opinion We have audited the accompanying Schedule of Expenditures of Federal Awards of the City of Evanston, Illinois (City), for the year ended December 31, 2021 and the related notes (the financial statement). In our opinion, the financial statement referred to above presents fairly, in all material respects, the expenditures of federal awards of the City for the year ended December 31, 2021, in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Schedule of Expenditures of Federal Awards section of our report. We are required to be independent of the City of Evanston, Illinois and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Schedule of Expenditures of Federal Awards Management is responsible for the preparation and fair presentation of this financial statement in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibilities for the Audit of the Schedule of Expenditures of Federal Awards Our objectives are to obtain reasonable assurance about whether the financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of 2 not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statement, whether due to fraud or error, and design and perform audit procedures responsive to those ri sks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Evanston, Illinois’ internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statement. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Chicago, Illinois September 28, 2022 Assistance Listing Identifying Award Passed-Through Federal Number Number Date to Subrecipients Expenditures DEPARTMENT OF AGRICULTURE Passed through the Illinois State Board of Education Child and Adult Care Food Program 10.558 ISBE 21-4226-00 - 05-016-510P-00 Jan 1, 2021 -Dec31, 2021 N/A 60,275 Passed through the Illinois State Board of Education Summer Food Service Program for Children 10.559 ISBE 21-4225-00 - 05-016-510P-00 May 1, 2021 -Sep 19, 2021 N/A 164,879 Total Department of Agriculture 225,154 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grants/Entitlement Grants Entitlement year 43 14.218 B17MC-170012 October 31, 2017 14,514 Entitlement year 44 14.218 B18MC-170012 July 31, 2018 30,000 Entitlement year 45 14.218 B19MC-170012 July 22, 2019 353,278 408,060 Entitlement year 46 14.218 B20MC-170012 August 21 2020 323,692 Entitlement year 47 14.218 B21MC-170012 August 3 2021 283,576 996,868 Sub-Total Community Development Block Grants/Entitlement Grants 636,854 1,773,134 COVID-19 Community Development Block Grants/Entitlement Grants Entitlement year 46 14.218 E20MW-170012 December 10, 2020 224,862 544,789 Sub-Total COVID-19 Community Development Block Grants/Entitlement Grants 224,862 544,789 Emergency Solutions Grant Program 14.231 E19MC-170012 July 22, 2019 8,198 13,299 Emergency Solutions Grant Program 14.231 E20MC-170012 August 21 2020 111,045 118,833 Emergency Solutions Grant Program 14.231 E21MC-170012 August 3 2021 26,939 26,939 Total Emergency Solutions Grant Program 146,182 159,071 COVID-19 Emergency Solutions Grant Program 14.231 E20MW170012 July 17, 2020 507,215 512,485 Home Investment Partnerships Program 14.239 M18-MC-170218 July 31 2018 61,848 119,581 Home Investment Partnerships Program 14.239 M19-MC-170218 July 22 2019 31,142 85,153 Home Investment Partnerships Program 14.239 M20-MC-170218 August 21 2020 129,493 301,658 Home Investment Partnerships Program 14.239 M21-MC-170218 August 3 2021 8,612 38,200 Total Home Investment Partnerships Program 231,094 544,592 ARRA - Neighborhood Stabilization Program 14.256 S10-MC-170012 January 14, 2010 N/A 9,445 Total Department of Housing and Urban Development 3,543,516 DEPARTMENT OF TRANSPORTATION Passed through Illinois Department of Transportation Highway Planning and Construction 20.205 HSIP # 202001007 August 30, 2019 N/A 32,932 Highway Planning and Construction 20.205 C91-306-91 November 13, 2020 N/A 256,073 Total Highway Planning and Construction 289,005 Passed through Illinois Department of Transportation State and Community Highway Safety 20.600 200HS210019 July 30, 2020 N/A 87,791 State and Community Highway Safety 20.600 200HS220057 August 19,2021 N/A 8,693 Total State and Community Highway Safety 96,484 Total Department of Transportation 385,489 DEPARTMENT OF TREASURY COVID-19 Coronavirus State/Local Fiscal Recovery Funds (CSLFRF)*21.027 Duns #146170910 March 11, 2021 N/A 3,066,540 COVID-19 Coronavirus State/Local Fiscal Recovery Funds (CSLFRF)*21.027 COE Resolution 91-R-21 March 11, 2021 N/A 850,000 Total Department of Treasury 3,916,540 DEPARTMENT OF ENVIRONMENTAL PROTECTION AGENCY Passed through the Illinois Department of Public Health Beach Monitoring and Notification Program Implementation 66.472 05380404H February 25, 2020 N/A 15,098 Total Department of Environmental Protection Agency 15,098 DEPARTMENT OF HEALTH AND HUMAN SERVICES Passed through Age Options Special Programs for the Aging Title III, Part B Grants For Supportive Services & Senior Centers 93.044 CSFA # 402-03-0027 October 1, 2021 N/A 10,000 Passed through the Illinois of Department of Public Health Public Health Emergency Preparedness 93.074 1017180027I July 31, 2020 N/A 55,906 Public Health Emergency Preparedness - Cities Readiness Prep 93.074 1017580003I November 17, 2020 N/A 43,873 Total Public Health Emergency Preparedness 99,779 Immunization Cooperative Agreements Vaccines for Children 93.268 05080028H November 15, 2019 N/A 1,600 Strengthening Public Health Systems and Services thru National Partnerships to Improve and Protect the Nation's Health 93.421 2020-100394 November 25, 2020 37,444 Passed through Public Health Institute of Metropolitan Chicago HIV Prevention Activities - Health Dept Based 93.940 not available January 28, 2022 N/A 11,042 Total Department of Health and Human Services 159,866 CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 Federal Grantor/Pass-Through Grantor/ Program Title *Denotes Major Program See Accompanying Notes to Schedule of Expenditures of Federal Awards 3 Assistance Listing Identifying Award Passed-Through Federal Number Number Date to Subrecipients Expenditures DEPARTMENT OF HOMELAND SECURITY Emergency Management Performance Grants 97.042 Duns #074390907 November 19,2021 36,505 Total Department of Homeland Security 36,505 INSTITUTE OF MUSEUM & LIBRARY SERVICES Passed thru Office of Sec of State - IL State Library Grants to States Project Next Generation ( PNG )45.310 22-3024-PNG July 8, 2020 N/A 26,249 2021 Per Capita - General Operations 45.310 AC1842204 June 21, 2021 N/A 109,867 On the Road to Recovery RTR: Transforming Library Spaces 45.310 22-6073-RTR October 7, 2021 N/A 13,080 National Leadership Grants COVID-19 Grants For Museums & Libraries 45.312 CAGML-247937-OMLS-20 September 24, 2020 N/A 76,619 Total Institute of Museum & Library Services 225,814 NATIONAL SCIENCE FOUNDATION Passed thru Northwestern University Office of Community Education and Human Resources 2021 Computer Science For All- Data In Motion 47.076 2031467 September 28, 2021 N/A 500 RETTL: Coding in Concert -Music & Code 47.076 1837661 July 31, 2018 N/A 16,568 2020 Smart and Connected Communities 47.076 SP0048483 January 1, 2020 N/A 21,663 Passed thru Evanston/Skokie District #65 2020 STEAM ambassadors 47.076 CNC-1831865 October 1, 2020 N/A 1,200 Total National Science Foundation 39,931 Total Expenditures of Federal Awards 8,547,913$ CITY OF EVANSTON, ILLINOIS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 Federal Grantor/Pass-Through Grantor/ Program Title *Denotes Major Program See Accompanying Notes to Schedule of Expenditures of Federal Awards 4 CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 5 NOTE 1 – REPORTING ENTITY This report on Federal Awards includes the federal awards of the City of Evanston, Illinois. The reporting entity for the city is based upon criteria established by the Governmental Accounting Standards Board (GASB). The City of Evanston is the primary government according to GASB criteria. On April 30, 2014, the Township was discontinued and dissolved following the March 18, 2014 general election vote taken by the registered voters of the Evanston Township. Pursuant to 60 ILCS 1/27-15 and 1/27- 20, effective 12:00 a.m. May 1, 2014, the City of Evanston assumed all rights, powers, assets, property, obligations and duties of the Evanston Township, including the responsibilities of providing the services that were previously provided by the Township. Beginning May 1, 2014, the functions of the Township are reported along with the City. NOTE 2 – BASIS OF PRESENTATION The accounting records for some grant programs are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. The accounting records for other grant programs are maintained on the accrual basis, i.e., when the revenue has been earned and the liability is incurred. The information in this schedule is presented in accordance with the requirements of OMB Uniform Guidance. NOTE 3 – SUBRECIPIENTS Of the federal expenditures presented in the schedule of expenditures of federal awards, the City of Evanston provided federal awards to subrecipients as follows: Program Title Assistance Listing Number Amount Provided to Subrecipients Community Development Block Grants/Entitlement Grants COVID-19 Community Development Block Grants Emergency Solutions Grant Program COVID-19 Emergency Solutions Grant Program 14.218 14.218 14.231 14.231 $322,137 $539,579 $146,182 $507,215 Home Investment Partnerships Program 14.239 $231,094 CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 6 NOTE 4 – PROGRAM INCOME The City of Evanston received the following program income amounts for the year ended December 31, 2021. The balances of receipts are from letter of credit drawdowns for the program. The program expenditures for the year include expenditures of this program income. Program Title Assistance Listing Number Amount Community Development Block Grants/Entitlement Grants 14.218 $172,476 Home Investment Partnerships Program 14.239 $35,955 ARRA- Neighborhood Stabilization Program 14.256 $16,683 NOTE 5– NOTES RECEIVABLE OUTSTANDING The City of Evanston has several notes receivable outstanding as of December 31, 2021. These loans are for various uses. The Community Development Block Grants/Entitlement Grants Loan funds a number of programs to make decent housing available and affordable to low- and moderate-income families, and to help low- and moderate-income residents maintain their property. The Home Investment Partnerships Program Loan provides loans to housing developers to acquire, rehab or construct housing for low- and moderate-income households. Program Title Assistance Listing Number Amount Community Development Block Grants/Entitlement Grants 14.218 $1,961,593 Home Investment Partnerships Program 14.239 $4,983,978 The notes receivable balances are not subject to continuing OMB Uniform Guidance compliance requirements. CITY OF EVANSTON, ILLINOIS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended December 31, 2021 7 NOTE 6– LOANS PAYABLE OUTSTANDING The City of Evanston has the following loans payable outstanding as of December 31, 2021. These loans are from The Capitalization Grants for Drinking Water and Clean Water State Revolving Funds. Projects funded were the sewer lining at Emerson and Davis streets, rehab of large diameter sewers and rehab of the Cleveland street sewer. Program Title Assistance Listing Number Amount Capitalization Grants for Drinking Water State Revolving Funds 66.468 $759,302 Capitalization Grants for Clean Water State Revolving Funds 66.458 $760,613 The loan payable balances are not subject to continuing OMB Uniform Guidance compliance requirements. NOTE 7 – NONCASH ASSISTANCE Of the federal expenditures presented in the schedule of expenditures of federal awards, the City of Evanston did not receive any noncash assistance during the year ended December 31, 2021. NOTE 8 – FEDERAL INSURANCE The City of Evanston had no federal insurance for the year ended December 31, 2021. NOTE 9 – INDIRECT COST RATE The City of Evanston has not elected to use the 10% de minimis indirect cost rate. 8 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE The Honorable Daniel Bliss, Mayor and Members of the City Council Evanston, Illinois Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the City of Evanston, Illinois (City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal programs for the year ended December 31, 2021. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2021. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City’s federal programs. 9 Auditor’s Responsibility for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, and the Uniform Guidance, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Other Matters The results of our auditing procedures disclosed instances of noncompliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as item 2021-001. Our opinion on each major federal program is not modified with respect to these matters. 10 Report on Internal Control over Compliance Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be significant deficiencies. A deficiency in 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 material weakness in internal control over compliance is a deficiency, or a 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. A significant deficiency in internal control over compliance is a deficiency, or a 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. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2021-001 to be significant deficiencies. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Chicago, Illinois September 28, 2022 CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 11 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements 1) Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified 2) Internal control over financial reporting: • Material weakness(es) identified? Yes X No • Significant deficiency(ies) identified? Yes X None reported 3) Noncompliance material to financial statements noted? Yes X No Federal Awards 1) Internal control over major federal programs: • Material weakness(es) identified? Yes X No • Significant deficiency(ies) identified? X Yes None reported 2) Type of auditors’ report issued on compliance for major federal programs: Unmodified 3) Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? X Yes No Identification of major programs: CFDA Number Name of Federal Program or Cluster 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Dollar threshold used to distinguish between type A and type B Programs: $750,000 Auditee qualified as low risk auditee? X Yes No CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 12 SECTION II – FINANCIAL STATEMENT FINDINGS No matters were reported. CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 13 SECTION III – FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS FINDING 2021-001 Procurement, Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Criteria: The Department of the Treasury’s Interim Final Rule (Effective May 17, 2021 through March 31, 2022) encouraged the use of internal Procurement Policies and Procedures when procuring products and/or services. The Department of the Treasury’s Compliance and Reporting Guidance report (Effective June 24, 2021 through April 30, 2025) required recipients (i.e., City of Evanston) to ensure any procurement using SLFRF funds to be consistent with the procurement standards set forth in the Uniform Guidance at 2 CFR 200.317 through 2 CFR 200.327 as applicable. Procurement Standards of Title 2 of the Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance) state that all non-federal entities will follow Section 200.318 through Section 200.327. A. Section 200.320 identifies five methods of procurement to be followed, among the methods of procurement the below are identified thresholds: (a) Informal – micro purchases (any amount up to $10,000) (b) Informal – small purchases ($10,000.01 to $249,999.99) (c) Formal – sealed bids ($250,000 and above) (d) Noncompetitive proposals B. Per Section 320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 14 C. The City of Evanston Purchasing Manual requires the collection of three written quotes for any purchase between $2,500 and $25,000 purchased with federal grant funds, a formal bid process (Bid, RFP, RFQ) for any purchase $25,000 or above purchased with federal grant funds, and a justification memo for a sole source purchase for any amount above $2,500 purchased with federal grant funds. D. The City of Evanston Purchasing Manual requires that for purchases above $2,500 but less than $10,000, approval signature must be obtained from the Department Director. All purchases above $10,000 require approval signature from the City Manager. Purchases above $25,000 must also be approved by the City Council. E. Per Title 2 CFR section 180.300, participant entering into a covered transaction must verify that the person with whom it intends to do business is not excluded or disqualified by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. F. Title 2 CFR section 200.303 states the following regarding internal control: “The auditee shall maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with law, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.” Condition/Context: 1. We tested six purchase orders totaling $1,144,862. Our procedures revealed the following: a. One (1) purchase order totaling $12,463 was a purchase greater than $2,500 but less than $25,000, and for which the City of Evanston did not obtain the required three quotations nor did the purchase meet the criteria for a sole source purchase. b. For five (5) purchase orders tested, documentation demonstrating that suspension and debarment searches were performed could not be provided by the City of Evanston, Sourcewell or Suburban Purchasing Cooperative (External Procurement service providers). c. The City of Evanston’s procurement policies do not include processes pertaining to monitoring and review procedures of procurement processes conducted by external procurement service providers to ensure compliance with all applicable procurement policies. CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 15 Cause: The City of Evanston’s procurement policies do not include processes pertaining to monitoring and review procedures of procurement processes conducted by external procurement service providers to ensure compliance with all applicable procurement policies, and where policies are in place for internal procurement they are not being followed. Effect: City of Evanston is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200 and the requirements outlined in the City of Evanston Purchasing Manual as it relates to purchases above $2,500. Additionally, the effect of noncompliance can result in questioned costs. Recommendation: We recommend that City of Evanston: a. Implement structures to monitor external procurement service providers to ensure their procurement methods comply with applicable federal compliance requirements. b. Expand Purchasing Manual to include policies and procedures for usage of external awards/contracts and suspension and debarment searches. c. Communicate and re-enforce its procurement policies and procedures to ensure compliance with applicable requirements. Views of Responsible Officials: The purchasing department will ensure further communication and re-enforcement of the procurement policies in the City of Evanston Purchasing Manual. Program Management will revise the policies as applicable. In addition, City of Evanston will consider the implementation of further controls (to include monitoring and review controls). CITY OF EVANSTON, ILLINOIS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2021 16 SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None. 17 MANAGEMENT’S CORRECTIVE ACTION PLAN CITY OF EVANSTON, ILLINOIS FOR THE YEAR ENDED DECEMBER 31, 2021 Finding 2021-001 Procurement, Suspension and Debarment Federal Agency: U.S. Department of the Treasury Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Questioned Cost: N/A Corrective Action: We agree with the auditor’s comments, and actions stated in the recommendation. The purchasing department will ensure further communication and re- enforcement of the procurement policies in the City of Evanston Purchasing Manual. Program Management team will revise the policies as applicable. In addition, City of Evanston will consider the implementation of further controls (to include monitoring and review controls). Contact Person: Hitesh Desai, Chief Financial Officer Anticipated Completion Date: December 31, 2022 City Manager’s Office Accounting 2100 Ridge Ave Evanston, Illinois 60201 T 847.448.8082 TTY 847.866.5095 www.cityofevanston.org