CAMILLUS HOUSE, INC.

Finding 2025-005: Activities Allowed or Unallowed / Allowable Costs/Cost Principles (Payroll) (Material Weakness) Federal Program: VA Homeless Providers Grant and Per Diem Program ("VA PDM") Assistance Listing Number: 64.024 Criteria: Per Uniform Guidance (§200.430), compensation costs charged to federal awards must be based on records that accurately reflect the work performed, be supported by a system of internal control providing reasonable assurance that charges are accurate, allowable, and properly allocated, reflect actual time worked, not budget estimates, and must include documentation such as timesheets or certifications of time and effort. Condition/Context: For 31 of 60 payroll transactions tested for the VA PDM program, Camillus did not maintain approved timesheets to support payroll costs charged to the program. In addition, for 31 of 60 transactions tested, allocations were based solely on budget estimates rather than actual time and effort records. This does not comply with Uniform Guidance requirements. Our sample was not, and was not intended to be, statistically valid. Cause: Camillus does not have adequate internal controls to provide information that personnel charges are accurate, allowable, and properly allocated. Effect or potential effect: Payroll costs charged to the program may not accurately reflect the work performed, increasing the risk of noncompliance with federal requirements. Questioned costs: $35,783 Repeat Finding, if applicable: This was not a repeat finding. Camillus should implement procedures to ensure payroll costs charged to federal programs are supported by actual time-and-effort documentation, such as timesheets or certifications, and that allocations are based on actual activity rather than budget estimates. Views of Responsible Officials: Camillus House acknowledges the finding and concurs that payroll costs charged to the VA PDM program must be supported by documentation reflecting actual time and effort. Management has implemented corrective actions to strengthen internal controls over payroll allocations and ensure compliance with Uniform Guidance.

Camillus House acknowledges the finding and has implemented and is continuing to enhance corrective actions as follows: Implementation of Time and Effort Reporting • Establish a formal time and effort reporting system for all personnel charged to programs • Require bi-weekly certified timesheets in Paylocity reflecting actual time worked Integration with Payroll Allocation • Ensure payroll allocations are based on actual time and effort • Perform monthly Finance review of payroll allocations Policy Updates • Update payroll and cost allocation policies to align with Uniform Guidance (§200.430) Training • Provide training to staff and annual refresher courses Monitoring and Oversight • Perform quarterly reviews and report to Audit and Finance Committees

Finding 2025-006: Activities Allowed or Unallowed / Allowable Costs/Cost Principles (Other than Personnel Services ("OTPS") Allocation) (Material Weakness) Federal Program: VA Homeless Providers Grant and Per Diem Program ("VA PDM") Assistance Listing Number: 64.024 Criteria: Under 2 CFR Part 200, Subpart E, costs charged to federal awards must be allowable, reasonable, and allocable. Allocable costs must be allocated in proportion to the benefits received and supported by a reasonable, documented allocation methodology applied consistently. A financial management system must provide records that adequately identify the source and application of funds, supported by effective internal controls. Record retention and documentation must support charges to federal awards. Condition/Context: Camillus charged OTPS costs to the VA PDM award without maintaining a documented allocation methodology. For 56 of 60 transactions tested, allocations were based solely on budget estimates rather than actual usage or other reasonable bases. Our sample was not, and was not intended to be, statistically valid. Cause: Camillus' system of internal controls was not properly designed to capture the required information to ensure that OTPS costs were allowable, supported, and properly allocated. Effect or potential effect: Costs charged to the federal awards may not be allocable in accordance with Uniform Guidance. Camillus relied on budget-based allocations and had no formal or documented contemporaneous actual cost allocation amounts for shared OTPS. Staff were not required to retain underlying usage/supporting records, and supervisory review did not detect the lack of allocability support. Questioned Costs: $16,386 Repeat Finding, if applicable: This was not a repeat finding. Recommendation: Management should adopt a written cost allocation plan for OTPS that identifies allocable cost pools and objective allocation bases (e.g., square footage, headcount, device counts, usage logs, transaction volumes, time/usage studies), require contemporaneous documentation (invoices, allocation worksheets, supporting metrics) for each OTPS charge to the award, and perform periodic true-ups from budget to actual activity. Views of Responsible Officials: Camillus House acknowledges the finding and agrees that OTPS costs must be supported by documented, reasonable, and consistently applied allocation methodologies. Management recognizes the need to strengthen internal controls and record retention processes for OTPS charges to federal awards, including the VA PDM program, to ensure compliance with Uniform Guidance. Management is committed to implementing a formal Cost Allocation Plan for OTPS that provides objective, documented allocation methods, and ensures ongoing oversight and compliance.

Camillus House acknowledges the finding and has implemented and is continuing to enhance corrective actions as follows: Cost Allocation Plan • Implement formal allocation plan using drivers such as square footage and headcount Documentation • Maintain invoices, allocation worksheets, and supporting schedules Reconciliation • Perform quarterly true-ups between budget and actual Training • Train staff on allocation methodology and documentation Monitoring • Conduct periodic reviews and report results to management

Finding 2025-007: Activities Allowed or Unallowed / Allowable Costs/Cost Principles (Payroll) (Material Weakness) Federal Program: Continuum of Care Program Assistance Listing Number: 14.267 Criteria: Per Uniform Guidance (§200.430), compensation costs charged to federal awards must be based on records that accurately reflect the work performed, be supported by a system of internal control providing reasonable assurance that charges are accurate, allowable, and properly allocated, reflect actual time worked, not budget estimates, and must include documentation such as timesheets or certifications of time and effort. Condition/Context: For 35 of 60 payroll transactions tested for the Continuum of Care program, Camillus did not maintain approved timesheets to support payroll costs charged to the program. In addition, for 40 of 60 payroll transactions tested, allocations were based solely on budget estimates rather than actual time and effort records. This does not comply with Uniform Guidance requirements. Our sample was not, and was not intended to be, statistically valid. Cause: Camillus does not have adequate internal controls to provide information that personnel charges are accurate, allowable, and properly allocated. Effect or potential effect: Payroll costs charged to the program may not accurately reflect the work performed, increasing the risk of noncompliance with federal requirements. Questioned costs: $54,037 Repeat Finding, if applicable: This was not a repeat finding. Recommendation: Camillus should review and enhance procedures to ensure payroll costs charged to federal programs are supported by actual time-and-effort documentation, such as timesheets or certifications, and that allocations are based on actual activity rather than budget estimates. Views of Responsible Officials: Camillus House acknowledges the finding and concurs that payroll costs charged to the Continuum of Care Program must be supported by documentation reflecting actual time and effort. Management has implemented corrective actions to strengthen internal controls over payroll allocations and ensure compliance with Uniform Guidance.

Camillus House acknowledges the finding and has implemented and is continuing to enhance corrective actions as follows: Implementation of Time and Effort Reporting • Establish a formal time and effort reporting system for all personnel charged to programs • Require bi-weekly certified timesheets in Paylocity reflecting actual time worked Integration with Payroll Allocation • Ensure payroll allocations are based on actual time and effort • Perform monthly Finance review of payroll allocations Policy Updates • Update payroll and cost allocation policies to align with Uniform Guidance (§200.430) Training • Provide training to staff and annual refresher courses Monitoring and Oversight • Perform quarterly reviews and report to Audit and Finance Committees

Finding 2025-008: Special Tests and Provisions (Material Weakness) Federal Program: Continuum of Care Program Assistance Listing Number: 14.267 Criteria: Per 2 CFR Part 200 and HUD program requirements (Compliance Supplement, Special Tests and Provisions), when grant funds are used to pay rent for all or part of a structure or individual housing units, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted units. Documentation supporting these determinations must be maintained. Condition /Context: For 60 rental transactions tested, there was a lack of documentation demonstrating that rents charged under the Continuum of Care Program did not exceed rents charged by the same owner for comparable unassisted units. Our sample was not, and was not intended to be, statistically valid. Cause: Management did not implement procedures to obtain or retain documentation verifying that rents charged were consistent with those for comparable unassisted units owned by the same landlord. Staff were unaware of the specific documentation requirement, and supervisory review did not identify the omission. Effect or potential effect: Without documentation, compliance with HUD requirements regarding reasonable rental rates cannot be substantiated. This increases the risk that federal funds may be used for rents that exceed allowable limits. Questioned Costs: None Repeat Finding, if applicable: This is a repeat finding. Recommendation: Management should establish and enforce procedures requiring documentation that rents paid under the program do not exceed rents charged by the same owner for comparable unassisted units. Acceptable documentation may include copies of leases for unassisted units, rent comparison worksheets, or other contemporaneous evidence. Staff should be trained on this requirement, and supervisory review should confirm compliance before approving rental payments. Views of Responsible Officials: Camillus House acknowledges the finding and concurs with the auditor’s assessment. Management recognizes the importance of maintaining documentation to substantiate that rents charged under the Continuum of Care Program are reasonable and comply with HUD and federal requirements. Management has implemented corrective measures to strengthen internal controls and compliance procedures for rental payments.

Camillus House acknowledges the finding and has implemented and is continuing to enhance corrective actions as follows: Documentation • Maintain at least three comparable rent analyses Review • Require supervisory approval prior to lease execution Training • Train staff on HUD requirements Monitoring • Perform quarterly compliance reviews

2024-008

Finding 2025-009: Period of Performance (Material Weakness) Federal Program: VA Homeless Providers Grant and Per Diem Program ("VA PDM") Assistance Listing Number: 64.024 Criteria: Per 2 CFR Part 200 program requirements, costs charged to a federal award must be incurred within the award’s approved period of performance and supported by adequate documentation evidencing (a) the timing of the underlying goods/services received and (b) appropriate review/approval of the transactions in accordance with the Organization’s internal controls and the award terms. Condition /Context: For 11 of 60 other than personnel services sampled items, there was a lack of supporting information or the supporting documentation indicated the underlying expense was incurred prior to the period of performance. For 31 of 60 payroll transactions sampled, there was a lack of review and approval of the transaction being within period of performance. Our sample was not, and was not intended to be, statistically valid. Cause: The Organization’s controls were not adequately designed and/or operating to ensure that (1) costs charged to the VA PDM award are supported by documentation demonstrating the costs were incurred within the period of performance and (2) recurring journal entries charged to the award are supported by appropriate documentation and supervisory approval prior to posting. Effect or potential effect: Without effective controls and documentation over period of performance, there is an increased risk that costs charged to the VA PDM may be charged to the program that are not within the award's performance period. Questioned Costs: $2,960 (likely questioned costs were determined to be greater than $25,000) Repeat Finding, if applicable: This was not a repeat finding. Recommendation: Management should enhance its controls to ensure that only costs incurred within the VA PDM award’s period of performance are charged to the program and that each charge is supported by sufficient documentation. Management should maintain evidence of review and approval of payroll transactions being within period of performance. Views of Responsible Officials: Camillus House acknowledges the finding and concurs with the auditor’s assessment. Management recognizes the importance of maintaining documentation to substantiate VA PDM award’s period of performance. Accordingly, management has implemented corrective measures to strengthen internal controls and compliance procedure

Camillus House acknowledges the finding and has implemented and is continuing to enhance corrective actions as follows: Control Procedures • Verify costs fall within grant period prior to posting Review Controls • Require supervisory approval Monitoring • Quarterly compliance testing

Finding 2024-006: Activities Allowed or Unallowed / Allowable Costs / Cost Principles (Payroll) (Material Weakness & Material Noncompliance) Federal Program: Coronavirus State and Local Fiscal Recovery Funds ("SLFRF") Assistance Listing Number: 21.027 Criteria: Per Uniform Guidance (§200.430), compensation costs charged to federal awards must be based on records that accurately reflect the work performed, be supported by a system of internal control providing reasonable assurance that charges are accurate, allowable, and properly allocated, reflect actual time worked, not budget estimates, and must include documentation such as timesheets or certifications of time and effort. Condition/Context: For a sample of 60 payroll transactions tested for the SLFRF program, totaling $28,505, Camillus did not maintain approved timesheets or any allocation methodology to support payroll costs charged to the program. Allocations were based solely on budget estimates rather than actual time and effort records, which does not comply with Uniform Guidance requirements. Our sample was not, and was not intended to be, statistically valid. Cause: Camillus has not developed a system of internal control which provides information that personnel charges are accurate, allowable, and properly allocated. Effect or potential effect: Payroll costs charged to the program may not accurately reflect the work performed, increasing the risk of noncompliance with federal requirements. Questioned costs: $28,505 Repeat Finding, if applicable: This was not a repeat finding. Recommendation: Camillus should implement procedures to ensure payroll costs charged to federal programs are supported by actual time-and-effort documentation, such as timesheets or certifications, and that allocations are based on actual activity rather than budget estimates. Views of Responsible Officials: Camillus House acknowledges the finding and concurs that payroll costs charged to the SLFRF program must be supported by documentation reflecting actual time and effort. Management has implemented corrective actions to strengthen internal controls over payroll allocations and ensure compliance with Uniform Guidance.

Camillus House recognizes the need to ensure that payroll costs charged to the SLFRF program are based on actual time and effort rather than budgeted estimates and is implementing a formal reporting process supported by supervisor-approved documentation for all personnel charged to federal awards. The organization is strengthening its payroll allocation procedures in Paylocity, updating relevant policies to align with Uniform Guidance, and providing targeted training to program and finance staff to reinforce compliance expectations. Management will conduct regular internal reviews to verify the accuracy of payroll charges and promptly address any discrepancies. These corrective actions, overseen by the Finance Department under the Chief Financial Officer, are expected to be fully implemented by June, 2026.

Finding 2024-007: Activities Allowed or Unallowed / Allowable Costs / Cost Principles (Other than Personnel ("OTPS") Allocation) (Material Weakness & Material Noncompliance) Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Criteria: Under 2 CFR Part 200, Subpart E, costs charged to federal awards must be allowable, reasonable, and allocable. Allocable costs must be allocated in proportion to the benefits received and supported by a reasonable, documented allocation methodology applied consistently. A financial management system must provide records that adequately identify the source and application of funds, supported by effective internal controls. Record retention and documentation must support charges to federal awards. Condition/Context: Camillus charged OTPS costs to the SLFRF award without maintaining a documented allocation methodology. For 51 of 60 transactions tested, allocations were based solely on budget estimates rather than actual usage or other reasonable bases. 60 disbursements from the OTPS population included 51 from the Shelter Expansion program. The 51 selections lacked the documented methodology and support for expense allocation. Our sample was not, and was not intended to be, statistically valid. Cause: Camillus' system of internal controls was not properly designed to capture the required information to ensure that OTPS costs were allowable, supported, and properly allocated. Effect or potential effect: Costs charged to the federal awards may not be allocable in accordance with Uniform Guidance. Camillus relied on budget-based allocations and had no formal or documented contemporaneous actual cost allocation amounts for shared OTPS. Staff were not required to retain underlying usage/supporting records, and supervisory review did not detect the lack of allocability support. Questioned Costs: $53,147 Repeat Finding, if applicable: This was not a repeat finding. Recommendation: Management should adopt a written cost allocation plan for OTPS that identifies allocable cost pools and objective allocation bases (e.g., square footage, headcount, device counts, usage logs, transaction volumes, time/usage studies), require contemporaneous documentation (invoices, allocation worksheets, supporting metrics) for each OTPS charge to the award, and perform periodic true-ups from budget to actual activity. Management allocability support before posting costs to the award. Views of Responsible Officials: Camillus House acknowledges the finding and agrees that OTPS costs must be supported by documented, reasonable, and consistently applied allocation methodologies. Management recognizes the need to strengthen internal controls and record retention processes for OTPS charges to federal awards, including the Shelter Expansion program, to ensure compliance with Uniform Guidance. Management is committed to implementing a formal Cost Allocation Plan for OTPS that provides objective, documented allocation methods, and ensures ongoing oversight and compliance.

Camillus House acknowledges the need to strengthen its allocation of OTPS costs charged to the SLFRF program and is implementing a formal, documented cost allocation plan that identifies objective and consistently applied allocation bases supported by contemporaneous records. Management is enhancing internal controls by requiring measurable documentation for all OTPS charges, performing periodic reconciliations to ensure allocations reflect actual usage, and updating procedures to reinforce federal compliance standards. Staff training and ongoing monitoring have been established to ensure adherence to the revised allocation methodology, with oversight by Finance leadership and full implementation expected by June, 2026.

Finding 2024-008: Special Tests and Provisions (Material Weakness) Federal Program: Continuum of Care Program Assistance Listing Number: 14.267 Criteria: Per 2 CFR Part 200 and HUD program requirements (Compliance Supplement, Special Tests and Provisions), when grant funds are used to pay rent for all or part of a structure or individual housing units, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted units. Documentation supporting these determinations must be maintained. Condition /Context: For 60 rental transactions tested, there was a lack of documentation demonstrating that rents charged under the Continuum of Care Program did not exceed rents charged by the same owner for comparable unassisted units. Our sample was not, and was not intended to be, statistically valid. Cause: Management did not implement procedures to obtain or retain documentation verifying that rents charged were consistent with those for comparable unassisted units owned by the same landlord. Staff were unaware of the specific documentation requirement, and supervisory review did not identify the omission. Effect or potential effect: Without documentation, compliance with HUD requirements regarding reasonable rental rates cannot be substantiated. This increases the risk that federal funds may be used for rents that exceed allowable limits. Questioned Costs: None Repeat Finding, if applicable: This was not a repeat finding. Recommendation: Management should establish and enforce procedures requiring documentation that rents paid under the program do not exceed rents charged by the same owner for comparable unassisted units. Acceptable documentation may include copies of leases for unassisted units, rent comparison worksheets, or other contemporaneous evidence. Staff should be trained on this requirement, and supervisory review should confirm compliance before approving rental payments. Views of Responsible Officials: Camillus House acknowledges the finding and concurs with the auditor’s assessment. Management recognizes the importance of maintaining documentation to substantiate that rents charged under the Continuum of Care Program are reasonable and comply with HUD and federal requirements. Management has implemented corrective measures to strengthen internal controls and compliance procedures for rental payments.

Camillus House will be implementing enhanced procedures to ensure full compliance with HUD rent reasonableness requirements, including establishing standardized documentation protocols, instituting supervisory review prior to payment approval, providing staff training on rent reasonableness standards, and conducting ongoing quarterly monitoring to verify compliance. These corrective actions are designed to ensure that all rental payments under the Continuum of Care Program are properly supported, reviewed, and retained in accordance with federal regulations by June, 2026.

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