GROUNDWORKS COLLABORATIVE, INC.

Finding number: 2021-001 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: State of Vermont, Agency of Human Services Program: Projects for Assistance in Transition from Homelessness CFDA #: 93.150 Award number: 03150-A1749 Award year: 2021 Finding: Noncompliance with certain performance requirements Prior Year Finding: N/A Type of Finding: Noncompliance with conditions of federal award Criteria The federal grant contract stated that of the total individuals enrolled in this program, at least 30% were supposed to receive mental health services. Condition During our testing, we noted that only 16% of the individuals enrolled in this program received mental health services. Cause This appears to be a result of not properly monitoring the amount of individuals who received mental health services throughout the year. Effect Increases the risk of losing future federal funding. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation: We recommend that the organization implement some method to monitor performance requirements of federal awards throughout the year. This should be tailored to each federal award and the performance requirements outlined in the contract for each federal award. View of Responsible Officials from the Auditee: Management agrees with the finding and recommendation. Groundworks is replacing the Director of Operations position with two positions to oversee the major divisions of Groundworks Services - Director of Shelters and Director of Supportive Services. This additional capacity will support a more thorough monitoring of performance on the respective grants that fund programs under their supervision. Additionally, a protocol will be implemented wherein the Business Manager will be directly included on performance reports and that position will monitor and notify the Executive Director when performance issues are identified.

Finding number: 2021-002 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: State of Vermont, Department of Health Program: Block Grants for Prevention and Treatment of Substance Abuse CFDA #: 93.959 Award number: 03420-08280 Award year: 2021 Finding: Noncompliance with certain performance requirements Prior Year Finding: N/A Type of Finding: Noncompliance with conditions of federal award Criteria The federal grant contract stated that the total number of people transitioned to permanent housing and the total number of people housed or served by Groundworks Collaborative, Inc. were required to increase from the prior fiscal year. Condition During our testing, we noted that both the total number of people transitioned to permanent housing and the total number of people housed or served by Groundworks Collaborative, Inc. decreased in total from the prior fiscal year. Cause This appears to be a result of COVID-19 pandemic causing barriers in finding permanent housing at a reasonable price and the ability to be housed or served. Effect Increases the risk of losing future federal funding. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation: We recommend that the organization implement some method to monitor performance requirements of federal awards throughout the year. This should be tailored to each federal award and the performance requirements outlined in the contract for each federal award. View of Responsible Officials from the Auditee: Management agrees with the finding and recommendation. Groundworks is replacing the Director of Operations position with two positions to oversee the major divisions of Groundworks Services - Director of Shelters and Director of Supportive Services. This additional capacity will support a more thorough monitoring of performance on the respective grants that fund programs under their supervision. Additionally, a protocol will be implemented wherein the Business Manager will be directly included on performance reports and that position will monitor and notify the Executive Director when performance issues are identified.

Finding number: 2021-003 Federal Agency: U.S. Department of Treasury Pass-through Agency: State of Vermont, Department for Children and Families Program: Coronavirus Relief Fund CFDA #: 21.019 Award number: 03440-44020-21-GWORKS Award year: 2021 Finding: Noncompliance with certain performance requirements Prior Year Finding: N/A Type of Finding: Noncompliance with conditions of federal award Criteria The federal grant contract stated that Groundworks Collaborative, Inc. must do the following: 1. Of the total homeless households receiving case management services, at least 70% attain subsequent employment, or are enrolled in a training or education program, or qualify for cash or noncash benefits within 90 days of meeting with the case manager. 2. Of the total homeless households receiving case management services, at least 70% are subsequently stabilized in transitional or permanent housing, and of those housed, at least 70% continue to be stably housed for at least 90 days. 3. At least 70% of households who are homeless have their housing stabilized within 28 days. Condition During our testing, we noted the following in regards to the three criteria above: 1. Only 4% of the total homeless households received the required services. 2. Only 29% of the total homeless households received the required services. 3. Only 1% had their housing stabilized within 28 days. Cause It appears that this was caused by factors that cannot be controlled by management. Many individuals were asked to leave for not following rules and others left on their own, causing significant difficulties in meeting these performance requirements. Effect Increases the risk of losing future federal funding. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation: We recommend that the organization implement some method to monitor performance requirements of federal awards throughout the year. This should be tailored to each federal award and the performance requirements outlined in the contract for each federal award. In addition, if factors outside of management?s control cause subpar performance of certain measures outlined in the contract, management should make the awarding agency aware and document their acknowledgement. View of Responsible Officials from the Auditee: Management agrees with the finding and recommendation. Groundworks is replacing the Director of Operations position with two positions to oversee the major divisions of Groundworks Services - Director of Shelters and Director of Supportive Services. This additional capacity will support a more thorough monitoring of performance on the respective grants that fund programs under their supervision. Additionally, a protocol will be implemented wherein the Business Manager will be directly included on performance reports and that position will monitor and notify the Executive Director when performance issues are identified.

Finding number: 2021-004 Federal Agency: U.S. Department of Treasury Pass-through Agency: State of Vermont, Department for Children and Families Program: Coronavirus Relief Fund CFDA #: 21.019 Award number: 03440-44020-21-GWORKS Award year: 2021 Finding: Internal controls over federal awards Prior Year Finding: N/A Type of Finding: Significant Deficiency Criteria In accordance with 2 CFR ?200.303, the non-federal entity must: (1) 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. These internal controls should be in compliance with 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). (2) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (3) Evaluate and monitor the non-Federal entity?s compliance with statutes, regulations, and the terms and conditions of the Federal awards. (4) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (5) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. Condition During our testing of internal controls over compliance we noted that 22% of invoices tested did not have the proper approval on the invoice or attached to the invoice. In addition, management did not have any policies in place to monitor the performance requirements of federal awards. Cause It appears that this was caused by management being negligent in understanding the requirements of them when receiving federal awards. Other factors that could have contributed include approvals being attached to the invoice instead of on the invoice themselves and the attachment is subsequently disposed of and invoices being erroneously marked as ?recurring? which do not require approval. Effect Poor internal controls create the opportunity for fraud or abuse. In addition, there is a higher risk of a disallowed cost to be paid and charged to a federal award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation: We recommend that the Organization hire an outside consultant to help implement stronger internal controls over federal awards and to help implement controls to monitor the use of federal funds and individual performance requirements. View of Responsible Officials from the Auditee: Management agrees with the finding and recommendation. Groundworks is replacing the Director of Operations position with two positions to oversee the major divisions of Groundworks Services - Director of Shelters and Director of Supportive Services. This additional capacity will support a more thorough monitoring of performance on the respective grants that fund programs under their supervision. Additionally, a protocol will be implemented wherein the Business Manager will be directly included on performance reports and that position will monitor and notify the Executive Director when performance issues are identified. When we submit our program reports we will note to the funder that if they have any feedback on any performance issues that we would like to hear it.