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A Report on On-site Audits of Residential Child Care Providers

August 2014

Report Number 14-043

Overall Conclusion

Three of the five residential child care contractors (providers) audited accurately reported in their cost reports the majority of funds they expended for providing 24-hour residential child care services for 2013. Those providers were:

- Avalon Center, Inc.

- Buckner Children and Family Services, Inc.

- Children's Hope Residential Services, Inc. – West.

Two providers audited had significant weaknesses in controls over their financial processes. As a result, auditors identified errors in the expenditures they reported in their cost reports for providing 24-hour residential child care services. Those providers were:

- L'Amor Village Residential Treatment Center.

- The Open Arms Agency.

All five providers should strengthen their efforts to consistently maintain documentation showing that they accurately reported their expenditures associated with providing 24-hour child care services. They also should improve the accuracy and classification of financial transactions they include on their cost reports.

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