Elevate Youth Services, Inc.

Finding Number: 2025-001 Management’s Response The management of Elevate Youth Services (EYS) acknowledges the importance of maintaining a formalized process for tracking and fulfilling grant reporting requirements. Context: EYS’s VCRHYP Program Director position experienced significant turnover over several years, which led the Executive Director to absorb responsibility for completing required semiannual and annual financial and program reports. This continued through FY22–FY24, and remained the case until the Executive Director’s departure on June 30, 2024. In FY25, new and existing EYS leadership assumed responsibility for both financial and program reporting. A primary focus of that year was building a stronger financial and management framework — one that is efficient and aligned with regulatory and grant requirements. This included a successful transition to accrual-based accounting and the development or revision of grant program management tools, including budget and monitoring systems. FY25 represented a significant investment in laying the foundation for reporting practices consistent with GAAP and sound grant management. That said, FY25 was also a year of competing demands. The work of building and revising systems while managing ongoing operations created delays in the timeliness of both financial and program reporting. Corrective Action Plan Management Oversite The Executive Director and Director of Finance will work with the VCRHYP Program Director to develop a shared reporting calendar with scheduled prompts to support timely submission. Additionally, the Manager of Quality Assurance and Data Systems will support leadership in building a Grant Lifecycle Tracking Module within EYS’s database. EYS is committed to strengthening the timeliness and accuracy of all financial and program reporting going forward.

2024-003

Finding Number: 2024-001 Management’s Response The management of Elevate Youth Services (EYS) acknowledges the importance of having a formal, documented approval process for journal entries—one that is clear both in form and in practice. Context: Historically, the Executive Director and the Director of Finance jointly reviewed internal financial reports. During these reviews, items that appeared inconsistent were examined in detail to ensure proper coding, and adjustments were made as needed. However, documentation of this review process was not consistently maintained. Corrective Action Plan 1. Oversight at the Board Level In mid-FY25, EYS established a Board Finance Committee. One of its top priorities has been to ensure the development of an auditable review process for financial reports and key transactions, including journal entries. The committee began by reviewing FY24 journal entries, conducting an internal audit of randomly selected entries to assess supporting documentation and the appropriateness of coding. No issues were identified during this review. 2. Increased Staffing to Strengthen Internal Controls EYS has expanded its finance team to improve internal controls. The addition of new staff enables greater segregation of duties, allowing for multiple levels of review of journal entries at both the Director of Finance and Executive Director levels. 3. Review and Revision of Fiscal Policies To support the transition from cash basis to accrual basis financial reporting in FY24, financial reporting and review processes were performed, but often on an irregular basis. With the formation of the Board Finance Committee and the expansion of finance staff, EYS is now actively assessing and updating its fiscal policies to better align with the needs of the organization’s financial operations and reporting standards. EYS is committed to strengthening its financial practices and has fully embraced the implementation of a formal, consistent process for the review and approval of journal entries.

Finding Number: 2024-002 Management’s Response The Management of Elevate Youth Services (EYS) acknowledges the importance of subrecipient monitoring in accordance with program compliance regulations set forth in our grant agreements with the U.S. Department of Housing and Urban Development (HUD). EYS further acknowledges the compliance findings of Davis & Hodgdon Associates CPAs as detailed in EYS’s FY24 financial audit that the complete cycle of subrecipient monitoring did not occur within the VCRHYP HUD Project as required during the year under audit. The following context for, and plan to address, findings are offered by management. Context: As EYS continued to see the impact of the changes in the labor market stemming from the pandemic, the VCRHYP team experienced ongoing turnover and subsequent slow hiring to fill vacant positions. The resultant impact was a delay in the implementation of key programmatic responsibilities – primarily subcontract recipient monitoring. Toward the end of the FY22 audit year, a new VCRHYP Director was hired. Early work included the codification of new program approaches and policies and the development of a preliminary program monitoring tool. Additionally, the agency submitted a new technical assistance request to HUD in January of 2023, to support the new staffing. A new TA provider was assigned to us in February of 2024. While waiting for additional technical assistance, the VCRHYP team began monitoring the existing programs. Monitoring of our Subrecipients occurred during July of 2023 and again late summer - early fall of 2024. Corrective Action Plan 1. Staff Currently, the VCRHYP Program Director has a cohesive team. 2. Monitoring Tool Up until January 2025, the VCRHYP Director met regularly with EYS’s assigned TA on a variety of program and procedural approaches to ensure that ongoing compliance issues are being addressed. Monitoring tools and templates were modernized and aligned with the compliance protocols of the program. 3. Financial Monitoring In addition to programmatic monitoring, EYS Management develop protocols to include a random desk audit of subrecipient financials to accompany the ongoing financial monitoring currently occurring through the collection and analysis of submitted invoices. This financial monitoring was included in the program monitoring during the summer of 2024. 4. Tracking Tools EYS’s Data and Quality Assurance Manager will develop a tracking tool in the agency’s data system to record the status of individual subrecipient monitoring. 5. Reporting The VCRHYP team has been diligent and methodical in developing monitoring tools and will be using them in future site visits. At each site visit exit meetings summarizing findings were discussed. The VCRHYP will be completing monitoring report and reviewing with each subrecipient their strengths and opportunities to align with each of the program components EYS is committed to completing the monitoring reports in accordance with the program. We will be able to bring this element of program compliance into regular conformity with expectations by the end of the 1st quarter of FY26.

2023-001

Finding Number: 2024-003 Management’s Response The management of Elevate Youth Services (EYS) acknowledges the importance of having a formalized process for tracking necessary reporting requirements for the grant. Context: Historically, due to the significant turnover of the VCRHYP Program Director position, the Executive Director assumed the duties of completing the necessary semiannual and annual financial and program reports. During FY22 – FY24 with the ongoing staff turnover of the VCRHYP team, the Executive Director continued covering the duties of submitting reports right before he left the organization 6/30/24. Internally, new and existing EYS management is learning the reporting requirements. Corrective Action Plan Management Oversite The Executive Director along with the Director of Finance will develop with the Director of the VCRHYP Program calendar prompts to assist with timely reporting. In addition, the manager of Quality assurance and data will assist with creating a tracking tool in EYS’s database. EYS is committed to strengthening its financial practices and fully embraces the timely and accurate reporting of financial and program data.

Management's Response The Management of Elevate Youth Services (EYS) acknowledges the importance of subrecipient monitoring in accordance with program compliance regulations set forth in our grant agreements with the U.S. Department of Housing and Urban Development (HUD). EYS further acknowledges the compliance findings of Davis & Hodgdon Associates CPAs as detailed in Elevate's FY23 financial audit that subrecipient monitoring did not occur within the VCRHYP HUD Project as required during the year under audit. The following context for, and plan to address, findings are offered by management. Context: As EYS continued to see the impact of the changes in the labor market stemming from the pandemic, the VCRHYP team experienced ongoing turnover and subsequent slow hiring to fill vacant positions. The resultant impact was a delay in the implementation of key programmatic responsibilities - primarily subcontract recipient monitoring. Toward the end of the FY22 audit year, a new VCRHYP Director was hired. Early work included the codification of new program approaches and policies and the development of a preliminary program monitoring tool. Additionally, the agency submitted a new technical assistance request to HUD in January of 2023, to support the new staffing. A new TA provider was assigned to us in February of 2024. While waiting for additional technical assistance, the VCRHYP team began monitoring the existing programs. Notifications of monitoring visits were sent out June 5th, 2023 and 7 out of 8 subrecipient programs were visited by the end of July. The final site visit was delayed due to catastrophic flooding witnessed by the State of VT on July 13th, 2023. Final reports generated by these site visits has been delayed. However, VCRHYP staff will be preparing monitoring reports from those visits and, further, will be iterating on current monitoring tools with the expectation that current VCRHYP staffing will allow for annual monitoring visits per HU D's expectations, moving forward. While we expect this tool to be further modified with input from our TA provider, VCRHYP's current monitoring tool for the HUD projects includes: • VCRHYP Client Checklist - This checklist is used by the VCRHYP Team during each site monitoring visit to ensure compliance with HUD Program guidelines for: Housing Navigation, Diversion, Joint: Transitional Housing Component, Joint: Rapid Rehousing Component, and Rapid Rehousing. The VCRHYP client checklist also include clients served by subgrantees under the Basic Center and Transitional Living Programs funding from the Family and Youth Service Bureau. • HR File Review - Personnel File Survey is used for VCRHYP's YHDP site monitoring to ensure that staff are hired within the HUD guidelines and that items including background checks, job description, hiring documentation and and performance evaluations are included in employee personnel files. • HUD Monitoring Exhibits 29-1 Guide for Review of Homeless and At-Risk Determination/Recordkeeping Requirements, HUD Exhibit 29-4 Guide for Review of Continuum of Care(CoC) Program Subrecipient Grant Management, and HUD Exhibit 29- 11 Guide for Review of CoC Match Requirements are also standard monitoring tools used during site visits to ensure the Subrecipient is providing services to participants that meet HUD's homelessness definition; to determine that the management of program is maintained; and to ensure that the required expenditure match is being met in accordance with the HUD's guidelines. Ongoing mitigation: Currently, the VCRHYP Program Director has a cohesive team. The VCRHYP Director is meeting regularly with our assigned TA on a variety of program and procedural approaches to ensure that ongoing compliance issues are being addressed. We anticipate having a new year of monitoring visits initiated during the summer of 2024. All monitoring visits conducted in that time period will be informed by TA support and will be accompanied by a written report shared with EYS leadership and the subrecipient being monitored. In addition to programmatic monitoring, EYS Management will develop protocols to include a random desk audit of subrecipient financials to accompany the ongoing financial monitoring currently occurring through the collection and analysis of submitted invoices. This financial monitoring will be included in the program monitoring scheduled for the summer of 2024. Elevate Youth Service's Data and Quality Assurance Manager will develop a tracking tool in the agency's data system to record the status of individual subrecipient monitoring. EYS acknowledges the challenging impact of staff shortages on program compliance. However, we do feel that the staffing and support from HUD is already in place to ensure that we will be able to bring this element of program compliance into regular conformity with expectations by the end of the ist quarter of FY24.

Corrective Action Plan Finding Number: 2020-01 Condition Found and Context: Delays in the reconciliation of subgrantee advances and subgrantee expenditures. Cause and Effect: The Bureau began operating the Youth Homelessness Demonstration Program during the fiscal year ended June 30, 2020 and began disbursing funds to subgrantees in October, 2019. The Bureau has a long experience of providing subgrants to partner organizations, however, the personnel responsible for the management of this program turned over several times during the fiscal year. This resulted in a lag in the reconciliation of program subaward advances and subgrantee expenditures, which could lead to inaccurate disbursements and reporting. Individual Responsible for Corrective Action: Kreig Pinkham, Executive Director Corrective Action Planned: In August 2020 a new Program Director was hired and the Agency Executive Director began working with her to evaluate past invoice and payments. At that point, the following procedures were put into place regarding billing and payment of invoices: 1. For each project, agencies submit invoices monthly or quarterly. Invoices include a detailed financial report showing expenses and document necessary match. 2. The Program Director reviews invoices and makes sure that all necessary information is included in the invoice 3. The Program Director meets regularly with the Executive Director and the Finance/Operations team ensure that invoices and HUD draws are in line. A detailed project spreadsheet documenting each transfer and matching it to the draw amount is signed off on by the Executive Director and passed to the Bureau?s Director of Operations who verifies the information and provides secondary authorization of the payment to subaward agencies. 4. Subaward agencies are further monitored via routine desk-audits conducted by the Program Director and by site visit audits, which were suspended during the COVID pandemic. Anticipated Completion Date: 8/1/2020 and ongoing