A Performance Audit
An Audit Report on On-site Financial Audits of Selected Residential Foster Care Contractors
October 2016
Summary Analysis
One of the four residential child care contractors (providers) audited had significant weaknesses in controls over its financial and cost reporting processes. In addition, another provider had significant weaknesses in its processes for obtaining the required background checks for foster families.
The other two providers audited generally complied with cost reporting requirements and background check requirements.
Auditors identified serious weaknesses in the processes that Faith Always Inspires True Healing Works Inc. (provider) used to develop its 2015 cost report. The provider did not use a general ledger to prepare its 2015 cost report, as the Department of Family and Protective Services (Department) required. The provider also did not maintain all 2015 bank statements. As a result, auditors could not determine whether data necessary to form a conclusion regarding the audit objectives was complete, and auditors could not determine whether the provider accurately reported funds it expended for providing child placing services.
Overall, the provider complied with foster parent monitoring and background check requirements; however, it should establish processes for tracking all volunteers, foster parents, household members, and frequent visitors.
Kids At The Crossroads, Inc. (provider) had significant weaknesses in its processes for obtaining required background checks for foster families.6 The provider also did not consistently comply with Department requirements for monitoring foster families.
The provider accurately reported on its cost report the majority of funds it expended for providing 24-hour residential child care services for fiscal year 2015. However, the provider should improve its controls to ensure that it complies with all cost reporting requirements, reports only allowable expenditures, and maintains complete and accurate documentation that fully supports all expenditures in its general ledger and on its cost report.
Good Shepherd Residential Treatment Centre, Inc. (provider) generally complied with Department background check requirements; however, it should strengthen its processes for ensuring that required fingerprint background checks are conducted.
The provider generally complied with cost reporting requirements for the expenditures for which it had supporting documentation; however, it should maintain documentation that fully supports its cost report.
The expenditures that the provider reported on its fiscal year 2015 cost report reconciled to its general ledger. However, the provider did not always have supporting documentation for those reported expenditures.
Guiding Light Rtc (provider) accurately reported on its cost report the majority of funds it expended for providing 24-hour residential child care services for fiscal year 2015. However, the provider should maintain complete and accurate documentation that fully supports all expenditures in its general ledger and on its cost report. Additionally, it should strengthen certain controls over its financial processes to help ensure that it accurately reports expenditures.
Overall, the provider complied with Department background check requirements.
Graphics, Media, Supporting documents