THE INNER VOICE, INC.Non-Profit

FINDING 2025-004 – Payroll Allocations Federal Program: Continuum of Care Program Federal Identifying Number: Direct funding grants - IL0395L5T102214, IL0395L5T102315, IL0184L5T102316, IL0184L5T102417, IL1790H5T102200, IL1791H5T102200, IL1792H5T102200; Passed- through grants -IL1759D5T102201, IL1878D5T102300, IL1759D5T102202, and 8567-D Federal Assistance Listing Number: 14.267 Passed Through: All Chicago Making Homeless History and Aids Foundation of Chicago Federal Agency: U.S. Department of Housing and Urban Development Criteria/Specific Requirement: A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require Inner Voice, Inc. to ensure federal expenditures to be consistent with the standards set forth in the Uniform Guidance at 2 CFR part 200, subpart E. B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.430(g)(1)(i) Standards for Documentation of Personnel Expenses states the following, “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. C. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following, “The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Our audit procedures over expenditures revealed the following: 1) For one (1) of forty (40) expenditure transactions tested, The Inner Voice, Inc. did not adequately track or review time and effort documentation for accuracy. For this selection, the time study applied to allocate salary and actual hours reported and paid did not agree. Questioned Costs: None. Context: The Inner Voice, Inc. expended a total of $5,207,762 of federal awards in fiscal year 2025. The Inner Voice, Inc. expended a total of $3,992,341 of federal awards in fiscal year 2025 under the Continuum of Care program. Effect: The Inner Voice, Inc. is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.426 as it relates to activities allowed or unallowed and allowable costs/cost principles requirements. Additionally, the effect of noncompliance can result in questioned costs. Cause: The Inner Voice, Inc.’s implementation of internal controls is inconsistent in the 1) review of time study against payment and 2) review and approval of payroll salaries transactions. Recommendation: We recommend that The Inner Voice, Inc. establish and maintain effective internal control over federal awards to ensure expenditures are supported as required by 2 CFR 200.430(g)(1)(i). This includes: a. Conducting a formal time and effort study to support payroll allocations; b. Enhancing policies and procedures surrounding time and effort documentation and review and approval of payroll expenditures. Management’s Response: See Corrective Action Plan.

FINDING 2025-005 – Procurement, Suspension and Debarment (Partially Repeated from Prior Year Finding 2024-002) Federal Program: Continuum of Care Program Federal Identifying Number: Direct funding grants - IL0395L5T102214, IL0395L5T102315, IL0184L5T102316, IL0184L5T102417, IL1790H5T102200, IL1791H5T102200, IL1792H5T102200; Passed- through grants -IL1759D5T102201, IL1878D5T102300, IL1759D5T102202, and 8567-D Federal Assistance Listing Number: 14.267 Passed Through: All Chicago Making Homeless History and Aids Foundation of Chicago Federal Agency: U.S. Department of Housing and Urban Development Criteria/Specific Requirement: A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.318(a) General Procurement Standards states the following, “Documented procurement procedures. The recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services.” B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.319 Competition states the following, “All procurement transactions under the Federal award must be conducted in a manner that provides for full and open competition and is consistent with the standards of this section and §200.320.” C. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 180.300 states a 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. D. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following, “The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: For fourteen (14) out of fourteen (14) procurement and suspension and debarment transactions tested we noted the following: 1) The Inner Voice, Inc. did not complete the appropriate procurement process; 2) The Inner Voice, Inc. did not maintain appropriate documentation to support the procurement method utilized (if any); and 3) The Inner Voice, Inc. did not provide or maintain documentation that suspension and debarment searches were performed. Questioned Costs: None. Context: The Inner Voice, Inc. expended a total of $5,207,762 of federal awards in fiscal year 2025. The Inner Voice, Inc. expended a total of $3,992,341 of federal awards in fiscal year 2025 under the Continuum of Care program. The procurement, suspension and debarment transactions we selected for testing totaled $1,180,252 or 29.6% percent of program expenditures. Effect: The Inner Voice, Inc. is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200 as it relates to procurement, suspension and debarment requirements. Additionally, the effect of noncompliance can result in questioned costs. Cause: 1. The Inner Voice, Inc.’s procurement policy provides limited guidance on procurement methods, documentation of procurement process, and references to Uniform Guidance procurement categories and definitions. Additionally, policy does not include processes pertaining to suspension and debarment checks. 2. Where policies are in place, they are not being followed. Recommendation: We recommend that The Inner Voice, Inc.: a. Enhance policies and procedures surrounding procurement, suspension and debarment. b. Communicate and reinforce its policies and procedures to ensure compliance with applicable requirements. Management’s Response: See Corrective Action Plan.

Federal Agencies: Department of Housing and Urban Development Federal Program Names: Continuum of Care Program Assistance Listing Number: 14.267 Federal Award Identification Number: IL0395L5T102113,IL0395L5T102214, IL0232L5T102215, IL0184L5T102215, IL0184L5T102316, IL1790H5T102200, IL1791H5T102200, IL1792H5T102200,197661, IL1759D5T102100, 8567-C, 8567-D Award Period: 9/1/2022-8/31/2023; 9/1/2023-8/31/2024; 7/1/2023-6/30/2024; 3/1/2023-2/29/2024; 3/1/2024-5/31/2025; 9/1/2023-8/31/2026; 10/1/2022-9/30/2023; 10/1/2023-6/30/2024; 2/1/2024-4/30/2024; 5/1/2024-4/30/2025 Type of Finding: Other Matters Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Noncompetitive procurement can be used in certain circumstances however the non-Federal entity is to maintain appropriate supporting documentation justifying the use of sole source procurement consistent with 2 CFR 200.320(c). Condition: Inner Voice did not maintain appropriate documentation to support the procurement method utilized for procurement selected for testing. Questioned Costs: Unknown. Context: One (1) of five (5) procurement transactions selected for testing. Cause: Inner Voice did not maintain appropriate documentation based on the method of procurement utilized. Effect: Inner Voice may inadvertently select vendors without regard to fair competition and cost analysis. Repeat Finding: This is not a repeat finding. Recommendation: We recommend Inner Voice to consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. Views of Responsible Officials: There is no disagreement with this finding.

Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition: During the course of our audit, CliftonLarsonAllen LLP prepared the financial statements. Criteria or specific requirement: A well-designed system of internal control should include policies and procedures to provide management with reasonable assurance year-end reporting of financial information and related disclosures is accurate and in according with accounting principles generally accepted in the United States of America. Effect: The lack of staffing with sufficient knowledge indicates the possibility of the omission of necessary footnote disclosures consistent with generally accepted accounting principles. Cause: CliftonLarsonAllen LLP prepared the financial statements. Repeat Finding: See prior year finding 2022-001. Recommendation: The financial statement preparation process should be part of the internal control system, although the Inner Voice may be financially limited in the hiring of personnel with an up-to-date understanding of accounting preannouncements, proper mitigating factors should be reflected including oversight by management. Views of responsible officials and planned corrective actions: Management agrees with the finding. Inner Voice hired a Director of Finance with extensive experience in accounting and HR on October 16, 2023. The Director of Finance reports directly to the CFO.

Type of Finding: Material Weakness in Internal Control over Financial Reporting Condition: During the course of our audit, misstatements in the accounting record were detected as a result of audit procedures performed. An adjustment was posted by management to correct the misstatement. The corrected misstatements impacted beginning net assets without donor restrictions, revenue, accounts receivable and decreased the change in net assets by $49,377. Criteria or specific requirement: A well-designed system of internal control should include policies and procedures to provide management with reasonable assurance year-end reporting of financial information and related disclosures is accurate and in according with accounting principles generally accepted in the United States of America. Effect: Inaccurate financial reporting could adversely affect the decision-making process for the management of the Inner Voice. Cause: Accounting principles generally accepted in the United States of America were not followed over the accounting of a grants received that were unconditional. Repeat Finding: See prior finding 2022-002. Recommendation: We recommend that management review policies and procedures over year-end transactions to ensure that all necessary adjustments are being posted on a timely basis, in the appropriate period, and in accordance with generally accepted accounting principles. Views of responsible officials and planned corrective actions: Management agrees with the finding. Management will be reviewing policies and procedures in the month of May every year. Additionally, the Director of Finance has been hired and joined Inner Voice effective October 16, 2023. The additional member of the finance department will allow for stronger internal controls and segregation of duties.

Federal Agency: Department of Veterans Affairs Federal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: INNV143-1419-537-PD-21; INNV143-1620-537-TP-21; INNV143-1075-537-CM20; INNV143-2290-537-CM-22 Award Period: 10/1/20-9/30/21; 10/1/21-9/30/22; 10/1/20-9/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: Inner Voice is required to have documented procurement policies and procedures which comply with the compliance requirement UG §200.318 general procurement standards, UG §200.319 competition, and §200.320 methods of procurement to be followed. Condition: The Inner Voice did not have formal policies and procedures over procurement for the period July 1, 2022, through March 31, 2023. Questioned costs: Unknown. Context: The Inner Voice did not have formal policies and procedures over procurement to ensure requirements are met and properly documented the period July 1, 2022, through March 31, 2023. Cause: The current policy was not updated to comply with compliance requirement UG §200.318 general procurement standards, UG §200.319 competition, and §200.320 methods of procurement until April 1, 2023. Effect: Possible payment of federal funds to vendors that did not properly go through the required procurement steps in accordance with Uniform Guidance. Repeat Finding: See prior year finding 2022-005. Recommendation: The Inner Voice should implement a procurement policy and procedure that includes the selection and documentation of procurement rationale, controls and oversight. This policy should be followed for all procurement transactions and include compliance requirements UG §200.318 general procurement standards, UG §200.319 competition, and §200.320 methods of procurement. Views of responsible officials and planned corrective actions: Management agrees with the finding. Procurement policy in accordance with Uniform Guidance was implemented and effective as of April 1, 2023. The policy will be reviewed and updated as needed on an annual basis.

Federal Agency: Department of Veterans Affairs Federal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: INNV143-1419-537-PD-21; INNV143-1620-537-TP-21; INNV143-1075-537-CM20; INNV143-2290-537-CM-22 Award Period: 10/1/20-9/30/21; 10/1/21-9/30/22; 10/1/20-9/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: When Inner Voice enters a covered transaction with an entity at a lower tier, Inner Voice must verify that the non-Federal entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: In testing the suspension and debarment requirement, it was noted not all certifications with vendors were obtained prior to executing the procurement contract. Questioned costs: None. Context: We noted two out of five procurement transactions tested, suspension and/or debarment certifications were not obtained prior to executing the transaction. Cause: The Inner Voice was not aware of the need to verify non-Federal entities were not suspended or debarred prior to procurement. Effect: By not obtaining proper suspension and debarment certifications, Inner Voice runs the risk of securing a contract with a vendor who is suspended or debarred. Repeat Finding: This is not a repeat finding. Recommendation: We recommend Inner Voice verify all procurement contracts are with vendors who are not suspended or debarred. This verification may be accomplished by: 1. Checking the System for Award Management (SAM) Exclusions 2. Collecting a certification form, or 3. Adding a clause or condition to the covered transaction with that entity Views of responsible officials and planned corrective actions: Management agrees with the finding. Vendors who reached $20,000 in payments during the fiscal year will be reviewed in SAM for exclusions prior to procurement.

Type of Finding: ? Material Weakness in Internal Control over Financial Reporting Condition: During the course of our audit, CliftonLarsonAllen LLP prepared the financial statements. Criteria or specific requirement: A well-designed system of internal control should include policies and procedures to provide management with reasonable assurance year-end reporting of financial information and related disclosures is accurate and in according with accounting principles generally accepted in the United States of America. Effect: The lack of staffing with sufficient knowledge indicates the possibility of the omission of necessary footnote disclosures consistent with generally accepted accounting principles. Cause: CliftonLarsonAllen LLP prepared the financial statements. Repeat Finding: This is not a repeat finding. Recommendation: The financial statement preparation process should be part of the internal control system, although the Inner Voice may be financially limited in the hiring of personnel with an up-to-date understanding of accounting preannouncements, proper mitigating factors should be reflected including oversight by management. Views of responsible officials and planned corrective actions: We are in the process of discussing with the Board for hiring of a finance person to prepare the reports so that CFO can review and approve his/her work.

Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: During the course of our audit, misstatements in the accounting records was detected as a result of audit procedures performed. Adjustments were posted by management to correct the misstatements. The corrected misstatements impacted expense, accrued vacation, revenue, accounts receivable and increased the change in net assets by $5,371. Criteria or specific requirement: A well-designed system of internal control should include policies and procedures to provide management with reasonable assurance year-end reporting of financial information and related disclosures is accurate and in according with accounting principles generally accepted in the United States of America. Effect: Inaccurate financial reporting could adversely affect the decision making process for the management of the Inner Voice. Cause: Accounting principles generally accepted in the United States of America were not followed over the accounting of a grant that was unconditional and vacation earned according to the Inner Voice?s vacation policy. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management review policies and procedures over year-end transactions to ensure that all necessary adjustments are being posted on a timely basis, in the appropriate period, and in accordance with generally accepted accounting principles. Views of responsible officials and planned corrective actions: We are in the process of discussing with the Board for hiring of a finance person to prepare the reports so that CFO can review and approve his/her work.

Federal Agency: Department of the Treasury Federal Program Name: American Rescue Plan Act Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 2022ARPA-2022 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: FCSAH06332 Award Period: February 15, 2022 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Inner Voice must provide the Schedule of Expenditures of Federal Awards (SEFA). The schedule must be complete and accurate to provide for the basis of testing by the auditors as well as for accurate financial reporting to primary and secondary funders. Condition: During the course of our audit, Inner Voice identified $55,000 in payments originally classified as a nonfederal award until audit inquiries were raised and a confirmation was made with the funder. A change to the SEFA was required to adjust the amounts reflected as federal awards. Questioned costs: None. Context: The initial SEFA provided omitted $55,000 of federal funds passed through the Illinois Department of Human Services. Cause: A lack of review of passed through grant agreement for federal funds identified and no verification performed with funder in preparation of SEFA. Effect: The lack of review of grant agreements for federal funds results in an amount inaccurately omitted on the SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend Inner Voice establish controls to evaluate grant agreements to capture funds identified as federal. Upon preparation of the SEFA, verification with funders should be performed as needed. Views of responsible officials: We are in the process of discussing with the Board for hiring of a finance person to prepare the reports so that CFO can review and approve his/her work.

Federal Agency: Department of Veterans Affairs Federal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: INNV143-1419-537-PD-21; INNV143-1620-537-TP-21; INNV143-1075-537-CM20; INNV143-2290-537-CM-22 Award Period: 10/1/20-9/30/21; 10/1/21-9/30/22; 10/1/20-9/30/23 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under allowable cost/cost principles, an organization in receipt of federal funding is required to have a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR Part 200 states that charges to awards for salaries and wages are to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During the course of our audit, we noted a salaried employee included no salary included with the employment agreement to support their salary. Questioned costs: None. Context: The Inner Voice requires the CEO to have an agreement issued by the board chair that includes the position title, salary, and date of employment. Cause: The signed agreement available included no salary listed. Effect: No salary included in the available employment agreements leads to an unsubstantiated salary paid to an existing employee. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Inner Voice maintain accurate and current information in all employee personnel files to be in compliance with 2 CFR Part 200. Views of responsible officials: In response to the finding raised that Inner Voice required the CEO to have an agreement issued by the Board Chair that not only includes the position title and date of employment but should also have mentioned salary. Moving forward Inner Voice?s Board Chair should provide a letter to the HR for the appointment and/or pay increase with the effective date which will also include name and salary.

Federal Agency: Department of Veterans Affairs Federal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: INNV143-1419-537-PD-21; INNV143-1620-537-TP-21; INNV143-1075-537-CM20; INNV143-2290-537-CM-22 Award Period: 10/1/20-9/30/21; 10/1/21-9/30/22; 10/1/20-9/30/23 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Inner Voice is required to have documented procurement policies and procedures which comply with the compliance requirement UG ?200.318 general procurement standards, UG ?200.319 competition, and ?200.320 methods of procurement to be followed. Condition: The Inner Voice does not have formal policies and procedures over procurement. Questioned costs: None. Context: The Inner Voice does not have formal policies and procedures over procurement to ensure requirements are met and properly documented. Cause: The current policy was not updated to comply with compliance requirement UG ?200.318 general procurement standards, UG ?200.319 competition, and ?200.320 methods of procurement. Effect: Possible payment of federal funds to vendors that did not properly go through the required procurement steps in accordance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: The Inner Voice should implement a procurement policy and procedure that includes the selection and documentation of procurement rationale, controls and oversight. This policy should be followed for all procurement transactions and include compliance requirements UG ?200.318 general procurement standards, UG ?200.319 competition, and ?200.320 methods of procurement. Views of responsible officials: Procurement policy is drafted and under discussion before bring this to the Board for a formal approval and its implementation.

Federal Agency: Department of Veterans Affairs Federal Program Name: VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Federal Award Identification Number and Year: INNV143-1419-537-PD-21; INNV143-1620-537-TP-21; INNV143-1075-537-CM20; INNV143-2290-537-CM-22 Award Period: 10/1/20-9/30/21; 10/1/21-9/30/22; 10/1/20-9/30/23 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Costs incurred federal award programs are to be recorded in the correct award period. Condition: A cost recorded and charged to the grant period was performed after the grant period. Questioned costs: There are no questioned costs. Context: For one of 18 disbursements selected for testing, the disbursement was incurred after the grant period for which the cost was applied. Cause: The Inner Voice was not aware of the need for authorization of the federal awarding agency in these instances. Effect: General disbursements that are not monitored for cut off at the end of an award period will result in the expense recorded in the incorrect award period. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Inner Voice review its policies and procedures at the conclusion of an award period and obtain authorization from the federal awarding agency for costs incurred after the award period. Views of responsible officials: Inner voice has approached VA Authority on this issue and they have no issue as this cost is immaterial. However, moving forward Inner voice will not allocate cost to the program and grant unless work is completed or approved by the funder in instances where the work cannot be completed during the program year.