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On-Site Financial Audits of Selected Residential Foster Care Contractors

October 2021

Summary Analysis

Of the five residential child care contractors (providers) audited, two providers—Children’s Hope Residential Services and ACH Child and Family Services' Residential Treatment Center— had financial controls in place to assist their operations in maintaining a sound fiscal basis. The other three providers audited—Hope Rising, City of Hope Missions, and The Children’s Shelter of San Antonio—had weaknesses or significant weaknesses in controls over their financial processes. As a result, those providers did not always accurately report the funds they expended providing 24-hour residential child care services for fiscal year 2019 and fiscal year 2020.

The three child-placing agencies audited did not always conduct supervisory visits of foster homes in accordance with all Department of Family and Protective Services (Department) requirements.

In addition, two of the three child-placing agencies - Hope Rising and Children's Hope Residential Services - did not always ensure that foster parents were paid in accordance with Department requirements. The other child-placing agency, The Children's Shelter of San Antonio, paid its foster parents the correct amount according to each child's level of care and days of service, as required.

 Jump to Overall Conclusion

Hope Rising (provider), a child-placing agency, had significant weaknesses in its controls over its financial processes, such as a lack of review and approvals of expenditures and no policies and procedures for key financial areas. This resulted in a lack of supporting documentation for transactions and misclassified information in the provider's general ledger. As a result, Hope Rising's cost reports for fiscal years 2019 and 2020 contained significant errors.

Jump to Chapter 1-A 

Hope Rising did not consistently conduct supervisory visits in accordance with all requirements in Title 26, Texas Administrative Code, Section 749.2815.

Jump to Chapter 1-B 

City of Hope Missions (provider), a general residential operation, had significant weaknesses in its controls over its financial processes, including inadequate support for its financial records, a lack of oversight, weaknesses in processing expenditures, and inadequate policies and procedures.

Jump to Chapter 2 

The Children's Shelter of San Antonio (provider), a child-placing agency, had weaknesses in the controls over its financial processes, including insufficient review and approval of expenditures and a lack of controls related to its cost reporting process. As a result, the provider did not always accurately report the funds it expended for providing 24-hour residential child care services for fiscal years 2019 and 2020.

Jump to Chapter 3-A 

The provider did not consistently conduct supervisory visits in accordance with all requirements in title 26, Texas Administrative Code, Section 749.2815.

Jump to Chapter 3-B 

Children's Hope Residential Services (provider), a child-placing agency, had financial controls in place to help its operation maintain itself on a sound fiscal basis. However, the provider should strengthen controls over the preparation of its cost report, payments made to foster parents, and retention of required documentation in employee personnel files.

Jump to Chapter 4-A 

The provider conducted all required quarterly monitoring visits for all foster homes tested. However, it did not consistently conduct other required visits or obtain foster parent signatures in accordance with all requirements in Title 26, Texas Administrative Code, Section 749.2815.

Jump to Chapter 4-B 

ACH Child and Family Services' Residential Treatment Center (provider), a general residential operation, had financial controls in place to assist its operation in maintaining a sound fiscal basis.

Jump to Chapter 5 

Graphics, Media, Supporting documents

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