(30 ILCS 708/20)

Sec. 20. Adoption of federal rules applicable to grants.

(a) On or before July 1, 2016, the Governor's Office of Management and Budget, with the advice and technical assistance of the Illinois Single Audit Commission, shall adopt rules which adopt the Uniform Guidance at 2 CFR 200. The rules, which shall apply to all State and federal pass-through awards effective on and after July 1, 2016, shall include the following:

(1) Administrative requirements. In accordance with Subparts B through D of 2 CFR 200, the rules shall set forth the uniform administrative requirements for grant and cooperative agreements, including the requirements for the management by State awarding agencies of federal grant programs before State and federal pass-through awards have been made and requirements that State awarding agencies may impose on non-federal entities in State and federal pass-through awards.

(2) Cost principles. In accordance with Subpart E of 2 CFR 200, the rules shall establish principles for determining the allowable costs incurred by non-federal entities under State and federal pass-through awards. The principles are intended for cost determination, but are not intended to identify the circumstances or dictate the extent of State or federal pass-through participation in financing a particular program or project. The principles shall provide that State and federal awards bear their fair share of cost recognized under these principles, except where restricted or prohibited by State or federal law.

(3) Audit and single audit requirements and audit follow-up. In accordance with Subpart F of 2 CFR 200 and the federal Single Audit Act Amendments of 1996, the rules shall set forth standards to obtain consistency and uniformity among State and federal pass-through awarding agencies for the audit of non-federal entities expending State and federal awards. These provisions shall also set forth the policies and procedures for State and federal pass-through entities when using the results of these audits.

The provisions of this item (3) do not apply to for-profit subrecipients because for-profit subrecipients are not subject to the requirements of 2 CFR 200, Subpart F, Audits of States, Local and Non-Profit Organizations. Audits of for-profit subrecipients must be conducted pursuant to a Program Audit Guide issued by the Federal awarding agency. If a Program Audit Guide is not available, the State awarding agency must prepare a Program Audit Guide in accordance with the 2 CFR 200, Subpart F – Audit Requirements - Compliance Supplement. For-profit entities are subject to all other general administrative requirements and cost principles applicable to grants.

(b) This Act addresses only State and federal pass-through auditing functions and does not address the external audit function of the Auditor General.

(c) For public institutions of higher education, the provisions of this Section apply only to awards funded by federal pass-through awards from a State agency to public institutions of higher education. Federal pass-through awards from a State agency to public institutions of higher education are governed by and must comply with federal guidelines under 2 CFR 200.

(d) The State grant-making agency is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients. The agreement with the for-profit subrecipient shall describe the applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for State and federal pass-through awards made to for-profit subrecipients shall include pre-award audits, monitoring during the agreement, and post-award audits. The Governor's Office of Management and Budget shall provide such advice and technical assistance to the State grant-making agency as is necessary or indicated.

(Source: P.A. 102-626, eff. 8-27-21; 102-813, eff. 5-13-22.)