Finding 1191799 (2025-002)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-03-30

Audit: 395614

Organization: Capstone Community Action, Inc. (VT)

Auditor: LEONE MCDONNELL & ROBERTS P A

AI Summary

Core Issue: The board composition does not meet the required tripartite structure, with only 11% public sector representation instead of the mandated 1/3.
Impacted Requirements: Noncompliance with the Community Services Block Grant Act may lead to corrective actions and jeopardize future funding.
Recommended Follow-Up: Implement a board composition matrix, establish a 60–90 day vacancy filling requirement, and create annual certifications to ensure compliance.

Finding Text

U.S. Department of Health and Human Services State of Vermont Department for Children and Families 2025-002: Compliance Finding – Special Tests and Provisions Community Services Block Grant (ALN 93.569) Condition: A board roster was obtained for September 25, 2025, the final board meeting of the fiscal year. This listing showed that the board was comprised of 8 members of the following designations: participant sector – 4 members (44%), private sector – 4 members (44%), and public sector – 1 member (11%). Criteria or specific requirement: All eligible entities in the state of Vermont shall be governed by a tripartite board as described in section 6768 of "The Community Services Block Grant Act". The board must fully participate in the development, planning, implementation, and evaluation of the program to serve low-income communities, and must be composed of 1/3 elected public officials, at least 1/3 representative of lowincome individuals and families in the neighborhood served, and the remaining members of business or community groups. Cause: Lack of oversight by management. Effect: The Organization was out of compliance with CSBG statutory governance requirements for a portion of the fiscal year. Continued noncompliance may increase the risk of corrective action by the pass-through entity and jeopardize future CSBG funding. Questioned costs: No questioned costs were identified. Recommendation: Adopt a board composition matrix with term tracking. This matrix can include sector designation, term start and end dates, public official designation expiration, as applicable, and vacancy status. This matrix can be reviewed at each board meeting to ensure timely addressing any issues or concerns. Establish written requirement that vacancies must be filled within 60–90 days. Require immediate escalation to the board chair or governance committee if ratios fall below statutory minimums. This demonstrates proactive compliance rather than reactive correction. Document Contingency Procedures - Create procedures specific to the Organization for situations where: public officials decline appointment, democratic elections fail to produce candidates, and / or board size changes mid-year. Require Written Annual Certifications - Have the board chair or governance committee sign an annual certification confirming the tripartite composition compliance documentation of democratic selection procedures. This provides clear internal control and audit trail.

Corrective Action Plan

Community Services Block Grant (ALN 93.569) U.S. Department of Health and Human Services State of Vermont Department for Children and Families Finding 2025-002 Compliance Finding - Special Tests and Provisions Corrective Action Plan Board Composition Matrix In response to the audit comment concerning the need for a Board Composition Matrix, we reviewed our current Board Roster. This review indicates our Roster meets the requirements listed (sector designation, term start and end dates, public official designation expiration, as applicable, and vacancy status). The board is sent an updated roster upon request. and it is updated each time a board member and/or seat is changed. The Board Development and Governance Committee reviews this most of the months that they meet, especially when discussing board recruitment, which is an ongoing agenda item while a seat is vacant. Current Procedure Currently, the Board Chair (Abby White) and Governance Committee Chair (Karen Lowry Reed) are both regularly consulted about board vacancies by the Executive Director (Alison Calderara), both to commit to outreach, and to review current candidates for the board. The Board Bylaws currently reference that the Board Development & Governance Committee is responsible for "[filling] any vacancies on the Board as soon as reasonably Possible." Additionally, all Board members sign an acknowledgement of the Bylaws annually, which reference the board composition. Recruitment is the responsibility of the Development and Governance Committee. Proposed Update of Procedure With the assistance of associated staff, the Development & Governance Committee will create a procedure to follow when vacancies arise, that covers unforeseen vacancies, as well as planned ones (such as when a board member's term limit is approaching). This will also include reference for different sectors, each of which have slightly different requirements for coming on the board. Capstone will complete this written procedure within 90 days. Current Status The Board seat that resulted in the organizational standard finding was filled November 2025. Three of the four required public sector seats are now filled. Responsible Person: Alison Calderara Date of Completion: June 28, 2026

Other Findings in this Audit

1191790 2025-001

Material Weakness Repeat
1191791 2025-001

Material Weakness Repeat
1191792 2025-001

Material Weakness Repeat
1191793 2025-001

Material Weakness Repeat
1191794 2025-001

Material Weakness Repeat
1191795 2025-001

Material Weakness Repeat
1191796 2025-001

Material Weakness Repeat
1191797 2025-001

Material Weakness Repeat
1191798 2025-001

Material Weakness Repeat
1191800 2025-003

Material Weakness Repeat
1191801 2025-003

Material Weakness Repeat
1191802 2025-003

Material Weakness Repeat
1191803 2025-003

Material Weakness Repeat
1191804 2025-003

Material Weakness Repeat
1191805 2025-003

Material Weakness Repeat
1191806 2025-003

Material Weakness Repeat
1191807 2025-003

Material Weakness Repeat
1191808 2025-003

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$1.56M
93.569	COMMUNITY SERVICES BLOCK GRANT	$696,215
21.023	EMERGENCY RENTAL ASSISTANCE PROGRAM	$292,405
93.568	LOW-INCOME HOME ENERGY ASSISTANCE	$276,181
97.036	DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS)	$142,076
10.569	EMERGENCY FOOD ASSISTANCE PROGRAM (FOOD COMMODITIES)	$111,958
10.558	CHILD AND ADULT CARE FOOD PROGRAM	$89,151
21.009	VOLUNTEER INCOME TAX ASSISTANCE (VITA) MATCHING GRANT PROGRAM	$51,000
14.267	CONTINUUM OF CARE PROGRAM	$45,662
81.042	WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS	$10,567
93.600	HEAD START	$10,245
10.182	PANDEMIC RELIEF ACTIVITIES: LOCAL FOOD PURCHASE AGREEMENTS WITH STATES, TRIBES, AND LOCAL GOVERNMENTS	$6,500
93.570	COMMUNITY SERVICES BLOCK GRANT DISCRETIONARY AWARDS	$4,410
14.251	ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS	$2,947