VOLUNTEERS OF AMERICA COLORADO BRANCH

Assistance Listing Number, Federal Agency, and Program Name 10.558, U.S. Department of Agriculture, Child and Adult Care Food Program Federal Award Identification Number and Year 0010284 (2024) Pass through Entity N/A Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Organization lacked adequate controls to ensure the SEFA was complete and accurate. Questioned Costs N/A If Questioned Costs are not Determinable, Description of Why Known Questioned Costs were Undetermined or Otherwise Could not be Reported No questioned costs were identified as the result of this finding Identification of How Questioned Costs Were Computed N/A Context In reviewing a monitoring report from the Colorado Department of Public Health & Environment from March 2025, we noted that the program under review - Child and Adult Care Food Program for Fiscal Year 2024 2025 - was not listed on the initial SEFA provided. The report specifically identified a review of records encompassing activity from January 2025, therefore there were expenditures during the year ended June 30, 2025. Cause and Effect A lack of adequate controls over financial reporting could result in inaccuracies or incomplete information on the SEFA. Recommendation We recommend the Organization implement a formal control requiring an independent review of the SEFA to ensure all federal expenditures are reported. Views of Responsible Officials and Corrective Action Plan Management concurs with the finding. The Child and Adult Care Food Program (CACFP) was omitted from the initial Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2025. Although CACFP had been consistently reported as a federal award in prior years, an update to the SEFA preparation format eliminated the prior-year rollover/carryforward record and the year over year (YOY) comparison functionality, reducing visibility into historical program inclusion. Additionally, the executed agreement was not readily available during preparation, resulting in the program being initially misclassified as non federal without documented cross functional validation or independent review. As a result, the omission was not identified during the initial SEFA review.

Federal expenditures were incurred and properly recorded during the fiscal year. The issue was limited to SEFA reporting completeness and did not constitute a compliance deficiency related to program administration, allowability, or management of federal funds. No questioned costs were identified.

Corrective Action: 1. Federal Award Classification Review: Federal versus non federal classification will be reviewed by the program manager, Director of Internal Control, and CFO based on the executed agreement. Any reclassification will require documented CFO approval.

2. Annual Cross System Reconciliation: An annual reconciliation between the contract management system and the general ledger will be performed to ensure all federal awards are captured for SEFA reporting.

3. SEFA Format Standardization: The SEFA preparation schedule will be reverted to a prior year rollover format that retains carryforward data and enables year over year comparison to improve completeness review and anomaly detection.

4. General Ledger Tagging Controls: General ledger dimensional tagging has been enhanced so federally funded activity is automatically identified and included in the preliminary SEFA.

5. Independent SEFA Review: The SEFA will undergo documented independent review and approval by the CFO prior to auditor submission, consistent with 2 CFR 200.303.

Assistance Listing Number, Federal Agency, and Program Name 93.044, 93.045, 93.053, U.S. Department of Health and Human Services, Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers; Special Programs for the Aging, Title III, Part C, Nutrition Services, and Nutrition Services Incentive Program (Aging Cluster) Federal Award Identification Number and Year EX24040 (2024); 21 IHEA 160179 (2021); EX23077 (2023); CON1357567 (2024) Pass through Entity Larimer County and Denver Regional Council of Governments Finding Type Material weakness Repeat Finding No Criteria Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Organization lacked adequate controls to ensure reviews were performed by a different individual than the one responsible for preparing monthly financial reporting, calculations of per unit activity, and requests for reimbursement. Questioned Costs N/A If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported No questioned costs were identified as the result of this finding Identification of How Questioned Costs Were Computed N/A Context During our walkthrough to understand management’s processes and internal controls to ensure compliance with financial reporting, we observed that the same individual was responsible for preparing, finalizing, and submitting financial reports for passthrough awards. This process includes accumulating cost activity incurred for the period from the general ledger for the Denver Regional Council of Governments awards, calculating revenue based on a fixed fee per service under the Larimer County awards, and accumulating and reporting matching contributions under all the awards. There was no evidence of an independent review or approval prior to submission. Cause and Effect A lack of segregation of duties and independent review increases the risk of material errors in financial reporting, including misstatements of fee based revenue on the SEFA and inaccuracies in meeting match requirements. Recommendation We recommend the Organization implement a formal control requiring an independent review of all financial reports prior to submission to the funding agency. This review should be performed by an individual who is not involved in the preparation of the reports. Views of Responsible Officials and Planned Corrective Actions Management concurs with the finding. We recognize that for the Denver Regional Council of Governments (DRCOG) and Larimer County awards the processes for accumulating cost activity, calculating per unit revenue, and reporting matching contributions lacked documentation of an independent review prior to submission.

While management maintains that the data submitted was accurate and supported by the general ledger, we acknowledge that the absence of a formal "preparer vs. approver" workflow does not meet the standards outlined in 2 CFR 200.303.

Corrective Action Plan: 1. Standardization of Financial Reporting Workflow: A formal segregation of duties for all federal and pass through reimbursement requests and financial reports has been implemented. Effective immediately, the individual responsible for accumulating cost data and calculating per unit activity (preparer) is prohibited from being the reviewer.

2. Implementation of Approval Process: All reports must now be submitted by the preparer to the designated reviewer for approval via email prior to submission. An approval response from the reviewer is required prior to submission to the awarding agency.

3. Staff Training: All grants management and accounting personnel have been briefed on the requirements of 2 CFR 200.303, specifically regarding the necessity of documented internal controls to provide reasonable assurance of compliance.

Assistance Listing Number, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Youth Transitional Program and Green Willow Project Federal Award Identification Number and Year: Youth Transitional Program: CO0059L8T032013 April 1, 2021 to March 31, 2022, CO0059L8T032215 April 1, 2023 to March 31, 2024. Green Willow Project: CO0133L8T032005 September 1, 2021 to August 31, 2022 and COOl 33L8T032106 September 1, 2022 to August 31, 2023. Pass through Entity: Youth Transitional Program: N/A Direct Green Willow Project: Family Tree, Inc. Finding Type Significant deficiency Repeat Finding No Criteria Per 24 CFR 578.51(g), U.S. Department of Housing and Urban Development (HUD) will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for comparable unassisted units, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units. Condition In a monitoring visit performed by HUD, the grantor found that rent reasonableness determination was not completed on five of the six files reviewed. In our testing we found that six of ten participants we tested did not have a rent reasonableness determination dated prior to the grant funds being expended. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The Organization performs rent reasonableness determination for 35 individuals and families. The grantor found five instances where the Organization did not have completed documentation on file to support that the rent reasonableness determination was performed and we identified six such instances. The Organization was able to perform a determination for all current participants in the program to fulfill the required corrective action of this monitoring visit and proved that all rent charged was reasonable, creating no questioned costs. Cause and Effect The Organization did not have completed documentation on file to support that a rent reasonableness test had been performed for the files reviewed, and the internal policy does not address how rent reasonableness will be performed and documented. The effect is that participants may be subject to unneeded current and future housing costs and the Organization may be ineffectively using HUD funds and inadvertently incur ineligible costs. Recommendation The Organization should implement controls to ensure that a rent reasonableness determination is completed and retained for every participant. In addition, the Organization should ensure the appropriate policies are put in place to address rent reasonableness. Views of Responsible Officials and Corrective Action Plan The Organization revised the program policy to compare the rent reasonableness of at least three similar units using the Rent Reasonableness Comparison worksheet before any lease up and document the test with evidence that is reviewed and verified with a supervisor signature prior to execution of the lease. The Organization will repeat this process annually as long as the participant remains in the same unit. The Organization also hired an extra full time program quality control staff to monitor the compliance with the procedures. Moreover, the Organization will have an internal audit by the finance department at the halfway point of the grant year.

Assistance Listing Number, Federal Agency, and Program Name 14.267 U.S. Department of Housing and Urban Development Continuum of Care Youth Transitions Program Federal Award Identification Number and Year CO0059L8T032013 April 1, 2021 to March 31, 2022 Pass through Entity N/A Direct Finding Type Significant deficiency Repeat Finding No Criteria Per 24 CFR 578.73(a), the recipient or subrecipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. Condition In a monitoring visit performed by U.S. Department of Housing and Urban Development (HUD), the grantor found that the supporting documentation submitted does not enable a third party reviewer to make a clear determination that match requirements were met. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The Organization met the required match but did not have documentation to support that match requirements were met. Cause and Effect The Organization did not have adequate policies in place over retaining documentation to support the required match was met. The effect is that the Organization is unable to track and show evidence that it met the 25 percent match obligation. If the 25 percent match obligation is not met, funds will likely need to be returned to the grantor. Recommendation The Organization should implement policies and controls to ensure that documentation is completed and retained to support that the match requirement is met. Views of Responsible Officials and Planned Corrective Actions The Organization established a policy and procedure to calculate the match requirement, compare it with the required total, and proactively identify actions to address any shortages at the end of each month. The Organization also ensured that all matches were supported by documents in a format that third parties could verify.