Audit 396483

Finding 2025-001: Disbursement Documentation - Significant Deficiency. Program name: Substance Abuse and Mental Health Services Projects of Regional and National Significance. Assistance Listing: 93.243. Federal award number: 45CBB04530. Federal award year: 7/1/2024 - 6/30/2025. Federal awarding agency: U.S. Department of Health and Human Services. Criteria - The Organization is required to follow the Uniform Guidance requirements 2 CFR Part 200.303, which requires the Organization to establish, document and maintain effective internal controls over federal awards. The Organization verbally approved expenses but lacked the documentation to support the approval. Condition - A sample of expenses were selected to test internal control over compliance and compliance with allowable costs/cost principles. Out of the items selected for testing, we noted insufficient documentation to support approval on 2 out of 40 expenses selected for testing. The exceptions noted occurred prior to the full implementation of the corrective action plan on January 1, 2025. Cause - The Organization's fiscal policies and procedures did not require written approval, leading to reliance on verbal approvals which were not documented. Effect - The failure to document approvals for expenses could lead to unallowable costs to be disbursed on grant awards. Questioned costs - None identified. Identification of Repeat Findings - This is a repeat finding from the prior year (Finding 2024-002). As a result of the 2024 audit report, issued in March 2025, the Organization began the process of developing updated policies for compliance. In 2025, the Organization formally adopted new policies and procedures that align with the internal control standards per 2 CFR Part 200. Recommendation - We recommend that management update their fiscal policies and procedures to align with what is required by the Uniform Guidance. Management response - See corrective action plan.

Finding 2025-002: Procurement - Significant Deficiency. Program name: Substance Abuse and Mental Health Services Projects of Regional and National Significance. Assistance Listing: 93.243. Federal award number: 45CBB04530. Federal award year: 7/1/2024 - 6/30/2025. Federal awarding agency: U.S. Department of Health and Human Services. Criteria - 2 CFR §200.318 requires written procurement procedures and awarding contracts only to responsible contractors, with sufficient procurement documentation. Condition - NAMI Chicago’s procurement controls were not designed or operating effectively. The procurement policy does not fully comply with Uniform Guidance. Cause - Management has not fully updated procurement policies or implemented consistent controls over vendor eligibility verification and contract authorization. Effect - There is an increased risk of noncompliance with federal procurement requirements, including contracting with ineligible vendors or entering into unauthorized agreements, which could result in questioned or disallowed costs. Questioned costs - None identified. Identification of Repeat Findings - No. Recommendation - Management should update the procurement policy to align with Uniform Guidance. Management response - See corrective action plan.