Texas State Auditor's Office - Summary of Report 25-005

A Performance Audit

An Audit Report on On-site Financial Audits of Selected Residential Foster Care Contractors

October 2024

Overview

Background

Audit Objectives

Of the four residential childcare contractors (providers) audited, two providers - DePelchin Children's Center and Buckner Rio Grande Children's Home Inc. - established adequate financial processes to help maintain operations on a sound fiscal basis for fiscal year 2023. One provider - New Horizons Ranch Residential Treatment Center - should strengthen its financial processes to ensure compliance with the Health and Human Services Commission's (Commission) accounting and cost reporting requirements. One provider - Caring Heart Residential Care Services LLC - had significant weaknesses in its financial processes.

The two child-placing agencies audited - DePelchin Children's Center and Buckner Rio Grande Children's Home Inc. - did not consistently comply with all the Commission's foster home monitoring requirements.

PRIORITY

CARING HEART RESIDENTIAL CARE SERVICES LLC - FISCAL PROCESSES

Caring Heart did not have adequate financial processes. Significant weaknesses were identified with Caring Heart's oversight and cost reporting of its expenditures, including related-party transactions.

Jump to Chapter 1

MEDIUM

NEW HORIZONS RANCH RESIDENTIAL TREATMENT CENTER - FISCAL PROCESSES

New Horizons Ranch established financial processes that helped ensure it operated on a sound fiscal basis; however, it should strengthen its accounting and cost reporting processes to ensure compliance with the Commission's requirements.

Jump to Chapter 2

MEDIUM

BUCKNER RIO GRANDE CHILDREN'S HOME INC. - FISCAL PROCESSES

Buckner Rio Grande appropriately reported expenses on its cost report and paid its foster parents in accordance with the appropriate rates; however, it should improve its payroll process.

Jump to Chapter 3-A

HIGH

BUCKNER RIO GRANDE CHILDREN'S HOME INC. - FOSTER PARENT MONITORING

Buckner Rio Grande did not verify that monitoring visits were conducted in compliance with the Commission's Minimum Standards.

Jump to Chapter 3-B

LOW

DEPELCHIN CHILDREN'S CENTER - FISCAL PROCESSES

DePelchin established effective financial processes to help maintain its operations on a sound fiscal basis and paid its foster parents in accordance with the appropriate rates.

Jump to Chapter 4-A

HIGH

DEPELCHIN CHILDREN'S CENTER - FOSTER PARENT MONITORING

DePelchin did not ensure that quarterly visits were performed and met the Commission's Minimum Standards

Jump to Chapter 4-B

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