The Town of Johnstown and the YMCA of Northern Colorado are headed into a public discussion over a forensic audit that has raised questions about financial reporting, subsidy payments, payroll allocations and Town-owned equipment tied to the Johnstown YMCA.
The issue is scheduled for discussion at the June 22 Johnstown Town Council meeting, according to the Town Council agenda communication. The packet includes the Town’s original audit cure letter, NOCO YMCA’s written response, a Town Manager memorandum responding to the YMCA, and the full Eide Bailly forensic accounting report.
At the center of the dispute is how much, if anything, the YMCA owes the Town — or whether the Town may owe the YMCA money instead.
The Town initially demanded $164,460.93 from NOCO YMCA after reviewing the forensic audit. After considering the YMCA’s response, Town staff revised that position and now says the YMCA’s “outstanding accountability” to the Town totals $106,022.62, according to the June 18 memorandum from Town Manager Matt LeCerf.
NOCO YMCA disputes several of the Town’s findings and calculations. In its May 5 response, the organization argued that some audit findings were based on incomplete information, incorrect assumptions or expenses that were valid Johnstown YMCA costs.
Audit reviewed three years of YMCA records
The Town hired Eide Bailly LLP in April 2025 to conduct a forensic accounting review of YMCA records related to the Johnstown facility. The review covered Jan. 1, 2022, through Dec. 31, 2024, according to the Eide Bailly forensic accounting report.
The Johnstown YMCA is operated by the YMCA of Northern Colorado under a 2019 facility management agreement with the Town. The agreement authorizes the YMCA to manage and operate the recreation center through Dec. 31, 2031. It also allows the Town to provide an annual operating subsidy of up to $500,000 if facility revenues are not enough to maintain operations.
The forensic accounting report found differences between financial statements submitted to Johnstown and the YMCA’s general ledger. Those included revenue differences in 2022 and 2023, as well as expense differences in 2022, 2023 and 2024.
The report also identified two revenue items that had not been reported to Johnstown in prior financial statements: a $35,000 grant in 2023 and $22,842.06 in joining fee revenue in 2024. According to the report, those items may result in $27,545 for 2023 and $15,112.93 for 2024 being owed back to Johnstown or applied to future subsidy payments.
Eide Bailly also reviewed selected expenses and identified $55,411.02 in observations. Those included expenses lacking supporting documentation or itemized receipts, transactions where the Johnstown YMCA location was not listed, expenses charged by employees not assigned to Johnstown, and three prohibited-use transactions totaling $163.92.
The report included several limits on its findings. Eide Bailly stated that it was not engaged to determine whether any person or party violated laws or regulations, and that it did not perform a financial audit for the purpose of expressing an audit opinion.
Town demanded repayment in February
After receiving the audit, Johnstown sent a Feb. 20 letter to NOCO YMCA CEO Chris Coker seeking to cure what the Town described as financial deficiencies.
In the audit cure letter, LeCerf wrote that the Town believed it was owed $164,460.93 from the YMCA for fiscal years 2022 through 2024. The Town requested repayment by June 20, 2026.
The Town’s calculation included several categories: lack of supporting documentation, expenses where Johnstown was not listed, expenses involving employees not assigned to Johnstown, prohibited use, payroll allocation questions, equipment inventory issues and the cost of the audit itself.
YMCA challenges several findings
NOCO YMCA responded in May with a letter describing the document as its complete and official organizational position.
The YMCA did not dispute every item. It accepted the $163.92 prohibited-use amount and did not dispute $4,684.52 tied to the “Johnstown not listed” category.
However, the YMCA challenged several other parts of the Town’s claim.
The organization said it had located additional receipts for some expenses flagged as lacking documentation. It also argued that some employees served the Johnstown facility even if payroll records did not identify Johnstown as their primary location.
NOCO YMCA also disputed payroll allocation findings involving Jen Spettel and Pat Murray. For Spettel, the YMCA said only 70% of her salary was allocated to Johnstown during the relevant period and that January through April 2023 was not allocated to Johnstown. For Murray, the YMCA argued the Town used an unreasonable assumption about how his time should have been divided among Johnstown, Loveland and Cheyenne.
The equipment issue is also disputed. NOCO YMCA acknowledged that some Town-owned equipment had been loaned to another YMCA location and said that should have been discussed with Johnstown leadership. The YMCA proposed paying $1,753.50 as a rental fee for the time the equipment was used elsewhere, but disputed the larger equipment-related claim.
The YMCA also rejected responsibility for the Town’s $35,000 audit cost and argued that revised calculations may show the Town owes money to the YMCA.
Town staff lowers claim but maintains dispute
In the June 18 memo, Town staff responded to the YMCA’s May letter and revised several amounts.
Town staff accepted three invoices provided by the YMCA and reduced one lack-of-documentation category from $23,795.02 to $18,768.33.
Staff also accepted the YMCA’s position on the Jen Spettel payroll issue, reducing that disputed amount to $0.
Other disagreements remain.
For expenses involving employees not assigned to Johnstown, Town staff accepted some of the YMCA’s explanation but rejected several items. The memo specifically questioned whether certain DoorDash and Downtown Aquarium expenses were sufficiently tied to the Johnstown facility under the management agreement. Staff revised that category to $7,030.51.
For Pat Murray’s payroll allocation, Town staff continued to dispute part of the amount and listed an updated figure of $31,981.24.
On equipment, staff accepted part of the YMCA’s proposed rental calculation but continued to raise concerns about a Life Fitness Total Body ArcTrainer and an InBody 270 scanner. The memo revised the equipment-related amount to $8,394.10.
Town staff also maintained that NOCO YMCA should pay the $35,000 audit cost. The memo cites the facility management agreement and argues the forensic audit was triggered by significant deviations in financial reporting.
After those revisions, Town staff concluded that it disagrees with the YMCA’s position that the Town owes the YMCA money. Instead, staff said the YMCA’s outstanding financial accountability to the Town totals $106,022.62.
Council discussion set for June 22
The June 22 agenda item is listed as a discussion between the Town of Johnstown and NOCO YMCA. No final action is listed in the agenda communication.
The agenda communication places the discussion under several strategic plan areas, including public trust, community partnerships, economic resilience, parks and facilities, and infrastructure maintenance.
The Johnstown YMCA remains one of the community’s major recreation facilities. The upcoming discussion is expected to focus not only on the disputed dollar amount, but also on financial reporting expectations, documentation standards, equipment oversight and the future working relationship between the Town and NOCO YMCA.
