FAC Explorer

Audit 336922

FY End
2024-06-30
Total Expended
$24.58M
Findings
2
Programs
18
Organization: Volunteers of America Chesapeake & Carolinas, INC (MD)
Year: 2024 Accepted: 2025-01-09
Auditor: Bdo

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
518466 2024-001 Significant Deficiency - J
1094908 2024-001 Significant Deficiency - J

Programs

ALN Program Spent Major Findings
64.033 Va Supportive Services for Veteran Families Program $9.57M - 0
14.195 Project-Based Rental Assistance (pbra) $2.03M Yes 0
93.696 Certified Community Behavioral Health Clinic Expansion Grants $1.50M Yes 0
14.218 Community Development Block Grants/entitlement Grants $1.00M Yes 0
14.267 Continuum of Care Program $693,268 Yes 1
14.239 Home Investment Partnerships Program $645,854 - 0
17.274 Youthbuild I & II $540,272 - 0
64.055 Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program $492,570 - 0
93.243 The Medicaid Assisted Therapy (mat) Program $354,191 - 0
14.235 Supportive Housing Program $350,000 - 0
93.243 The Minority Aids Initiative (mai) Program $329,767 - 0
93.788 Opioid Str $318,937 - 0
93.243 The Compass Program From Commonwealth of Virginia $257,048 - 0
64.024 Va Homeless Providers Grant and Per Diem Program $233,562 - 0
16.812 Second Chance Re-Entry Program $185,654 - 0
93.958 Block Grants for Community Mental Health Services $100,523 - 0
14.241 Housing Opportunities for Persons with Aids $100,000 - 0
14.231 Emergency Solutions Grants Program $47,876 - 0

Contacts

Name Title Type
FVSQANNLYGK1 Suzanne Tobin Auditee
3018323810 Divya Gadre Auditor
No contacts on file

Notes to SEFA

Title: Loan And Loan Guarantee Programs Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the consolidated financial position, changes in net assets, or cash flows of the Organization. The accompanying schedule of expenditures of federal awards and our audit described below do not include the federal expenditures of VOA Hickory Knoll, Inc. and VOA Butner Morning Glory, Inc. because the component units engaged other auditors to have an audit performed in accordance with the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Organization administers various programs funded by the U.S. Department of Housing and Urban Development. Balances and transactions relating to these programs are included in the Organization’s basic consolidated financial statements. Loans outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at June 30, 2024 consists of: Assistance Listing Number Program Name Outstanding Balance as of June 30, 2024 14.239 Home Investment Partnerships Program $ 4,713,757 14.218 Community Development Block Grants/Entitlement Grants 1,000,000 14.241 Housing Opportunities for Persons with AIDS 100,000 Total loan and loan guarantee programs $ 5,813,757
Title: Reconciliation of the Schedule to the Consolidated Statement of Activities Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the consolidated financial position, changes in net assets, or cash flows of the Organization. The accompanying schedule of expenditures of federal awards and our audit described below do not include the federal expenditures of VOA Hickory Knoll, Inc. and VOA Butner Morning Glory, Inc. because the component units engaged other auditors to have an audit performed in accordance with the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The reconciliation of the Schedule to the consolidated statement of activities is below: Year ended June 30, 2024 Schedule of expenditures of federal awards $ 24,582,226 Loan and loan guarantee programs (5,813,757) Patient service revenue 21,159,631 Other state and local government revenues and grants 5,677,150 Government revenues and grants per consolidated statement of activities $ 45,605,250

Finding Details

Finding 2024-001
2024-001 – Program Income Identification of the Federal Program U.S. Department of Housing and Urban Development Name of Program: Continuum of Care Program pass-through from Prince George’s County Assistance Listing Number: 14.267 Grant Award Number: MD023L3G002012/MD0232L3G002013 Pass-through Identifying Number: 524.1-14267-2024 Grant Award Period: July 1, 2022 to June 30, 2024 Criteria or Specific Requirements – In accordance with 2 CFR 200.80, program income means, “gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in § 200.307 paragraph (f).” Paragraph (f) states, “There are no Federal requirements governing the disposition of income earned after the end of the period of performance for the Federal award, unless the Federal Awarding agency regulations or the terms and conditions of the Federal award provide otherwise.” There are three methods of applying program income: deduction; addition; and cost-sharing. The Federal agency should specify what program income method(s) will be used in the terms and conditions of the Federal award. The deduction method will be used if the Federal agency does not specify a method for applying program income. Unless specified in the agency’s regulations, program income treatment is usually handled in the grant agreement terms and conditions. The pass-through grant from Prince George’s County should follow the method for applying program income outlined in the manual issued by the Behavioral Health Authority (BHA). Per the manual, the Continuum of Care (CoC) grant funds is to be used to pay the difference between the contract rent for a unit and 30% of the participant’s or family’s income (program income). Condition – The Organization failed to comply with the program income compliance requirement of the U.S. Department of Housing and Urban Development (HUD) Continuum of Care Program by not netting the $41,762 of program income (contracted rent amount per tenant) generated from the pass-through grant to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA. Per the manual, BHA will utilize CoC funding to make affordable housing for program participants and families by using CoC grant funds to pay the difference between the contract rent for a unit and 30% of the participant’s or family’s income. We were informed by the Organization that they instead followed what was verbally communicated to them that they can use the program income to cover for utilities and maintenance costs of the properties being rented, which is also an acceptable use of the program income. We were also informed that BHA has not demanded that the Organization remit the program income collected during the fiscal year 2024 and BHA has not stopped the funding under this program since the Organization utilized the program income to cover program expenses. Cause - The Organization did not follow the protocol in the manual issued by BHA to net the program income from the pass-through grant with the contracted rent amount per tenant prior to submitting the reimbursement request to HUD. Instead, the Organization followed what was verbally communicated to them that they can use the program income to cover for utilities and maintenance costs of the properties being rented, which is also an acceptable use of the program income. Potential Effect - Charges to Federal awards for rent is more than what is allowed under the manual issued by BHA. Questioned costs – $41,762, this is the amount the Organization is allowed to collect from the tenants per the manual issued by BHA and represents 30% or less of the tenants’ annual income and should have been netted with the contracted rent amount per tenant prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA. Context – The condition was identified during the fiscal year 2024 audit when we reviewed and tested the program income compliance requirement applicable for Assistance Listing Number 14.267. We noted that the program income generated from the pass-through grant during the fiscal year 2024 totaling $41,762 was not netted to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA. Recommendation - We recommend the Organization establish internal control and processes to properly account for program income in accordance with the protocol outlined in the manual issued by BHA, i.e., to net the program income to the contracted rent amount per tenant prior to submitting for reimbursement from HUD. Views of Responsible Officials - Management agrees with the federal award finding identified in the audit. Effective immediately, the Organization will comply with the program income compliance requirement of the U.S. Department of Housing and Urban Development (HUD) Continuum of Care Program by netting program income generated from the pass-through grant to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA.
Finding 2024-001
2024-001 – Program Income Identification of the Federal Program U.S. Department of Housing and Urban Development Name of Program: Continuum of Care Program pass-through from Prince George’s County Assistance Listing Number: 14.267 Grant Award Number: MD023L3G002012/MD0232L3G002013 Pass-through Identifying Number: 524.1-14267-2024 Grant Award Period: July 1, 2022 to June 30, 2024 Criteria or Specific Requirements – In accordance with 2 CFR 200.80, program income means, “gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in § 200.307 paragraph (f).” Paragraph (f) states, “There are no Federal requirements governing the disposition of income earned after the end of the period of performance for the Federal award, unless the Federal Awarding agency regulations or the terms and conditions of the Federal award provide otherwise.” There are three methods of applying program income: deduction; addition; and cost-sharing. The Federal agency should specify what program income method(s) will be used in the terms and conditions of the Federal award. The deduction method will be used if the Federal agency does not specify a method for applying program income. Unless specified in the agency’s regulations, program income treatment is usually handled in the grant agreement terms and conditions. The pass-through grant from Prince George’s County should follow the method for applying program income outlined in the manual issued by the Behavioral Health Authority (BHA). Per the manual, the Continuum of Care (CoC) grant funds is to be used to pay the difference between the contract rent for a unit and 30% of the participant’s or family’s income (program income). Condition – The Organization failed to comply with the program income compliance requirement of the U.S. Department of Housing and Urban Development (HUD) Continuum of Care Program by not netting the $41,762 of program income (contracted rent amount per tenant) generated from the pass-through grant to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA. Per the manual, BHA will utilize CoC funding to make affordable housing for program participants and families by using CoC grant funds to pay the difference between the contract rent for a unit and 30% of the participant’s or family’s income. We were informed by the Organization that they instead followed what was verbally communicated to them that they can use the program income to cover for utilities and maintenance costs of the properties being rented, which is also an acceptable use of the program income. We were also informed that BHA has not demanded that the Organization remit the program income collected during the fiscal year 2024 and BHA has not stopped the funding under this program since the Organization utilized the program income to cover program expenses. Cause - The Organization did not follow the protocol in the manual issued by BHA to net the program income from the pass-through grant with the contracted rent amount per tenant prior to submitting the reimbursement request to HUD. Instead, the Organization followed what was verbally communicated to them that they can use the program income to cover for utilities and maintenance costs of the properties being rented, which is also an acceptable use of the program income. Potential Effect - Charges to Federal awards for rent is more than what is allowed under the manual issued by BHA. Questioned costs – $41,762, this is the amount the Organization is allowed to collect from the tenants per the manual issued by BHA and represents 30% or less of the tenants’ annual income and should have been netted with the contracted rent amount per tenant prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA. Context – The condition was identified during the fiscal year 2024 audit when we reviewed and tested the program income compliance requirement applicable for Assistance Listing Number 14.267. We noted that the program income generated from the pass-through grant during the fiscal year 2024 totaling $41,762 was not netted to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA. Recommendation - We recommend the Organization establish internal control and processes to properly account for program income in accordance with the protocol outlined in the manual issued by BHA, i.e., to net the program income to the contracted rent amount per tenant prior to submitting for reimbursement from HUD. Views of Responsible Officials - Management agrees with the federal award finding identified in the audit. Effective immediately, the Organization will comply with the program income compliance requirement of the U.S. Department of Housing and Urban Development (HUD) Continuum of Care Program by netting program income generated from the pass-through grant to the amount to be reimbursed prior to submitting the reimbursement request to HUD, in accordance with the protocol outlined in the manual issued by BHA.