EIN: 330248851
UEI: E11MGP4KHMF5
Data as of August 27, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 17, 2024. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by June 17, 2025 (436 days ago).
What is a management decision? →The Agency has not designed and implemented an accounting system that tracks grants, grant budgets and grant cost center-level of accounting, including allocation of indirect administrative program expenses. In testing the Agency compliance with allowable costs and activities allowed, the Agency could not identify specific federal grant expenditures related to the grant awards for either direct or indirect program expenses. As a result, the Agency could not provide a schedule of expenditures of federal awards timely and on an accrual basis.
Show full finding ▾Hide full finding ▴The Agency has not designed and implemented an accounting system that tracks grants, grant budgets and grant cost center-level of accounting, including allocation of indirect administrative program expenses. In testing the Agency compliance with allowable costs and activities allowed, the Agency could not identify specific federal grant expenditures related to the grant awards for either direct or indirect program expenses. As a result, the Agency could not provide a schedule of expenditures of federal awards timely and on an accrual basis.
1. Engaging CDSS for Clarification: KFA will formally engage the California Department of Social Services (CDSS) to clarify the applicability of federal guidelines for fee-for-service foster care providers. This includes obtaining specific guidance on financial reporting structure and reconciliation requirements. 2. Enhancing Financial Management Systems: KFA is implementing a financial management system capable of tracking costs by funding source, program, and passthrough entity. This system will facilitate accurate allocation of both direct and indirect costs and ensure compliance with federal guidelines. 3. Developing Comprehensive Cost Allocation Methodology: A consistent and documented cost allocation methodology is being developed, which includes time certifications for staff whose work spans multiple programs. This methodology will be reviewed annually to ensure continued compliance with applicable regulations. 4. Strengthening FC32 Reporting: Processes are being established to reconcile FC32 reports with functional expense statements. Allocations for executive salaries to the federal program will adhere to the federal executive level 2 salary limitation as required. 5. Training and Documentation: Financial and administrative staff are receiving training on cost allocation principles, federal salary limitations, and FC32 reporting requirements. Comprehensive documentation of all methodologies and calculations will be maintained for transparency and audit readiness. 6. Monthly Reconciliations: A monthly reconciliation process is being implemented to ensure expenditures and revenues align with the terms and conditions of the foster care program.
The Agency reported entity-wide expenses for their basic foster care program and payroll costs were not allocated or reported appropriately. In reconciling total program expenses reported on the Agency's FC 32 reports submitted during 2023, the auditor identified that program expenses for the basic foster care program were overstated as it included management and general expenses, as well as program expenses from the Agency's other foster care programs. The Agency's allocation of payroll costs on the ISFC and EISFC FC 32 reports could not be reperformed as the calculation and methodology were not sufficiently documented. As a result, the auditor noted that executive salaries were not limited to annual federal executive level 2 salary required in the terms and conditions of the foster care grant award.
Show full finding ▾Hide full finding ▴The Agency reported entity-wide expenses for their basic foster care program and payroll costs were not allocated or reported appropriately. In reconciling total program expenses reported on the Agency's FC 32 reports submitted during 2023, the auditor identified that program expenses for the basic foster care program were overstated as it included management and general expenses, as well as program expenses from the Agency's other foster care programs. The Agency's allocation of payroll costs on the ISFC and EISFC FC 32 reports could not be reperformed as the calculation and methodology were not sufficiently documented. As a result, the auditor noted that executive salaries were not limited to annual federal executive level 2 salary required in the terms and conditions of the foster care grant award.
1. Elimination of Federal Allocation for Executive Salaries in 2023: Starting in 2023, KFA ensured that no executive salaries were charged to the federal funding portion of the foster care program, eliminating any potential misallocation. 2. Development of Cost Allocation Methodology: KFA has initiated the development of a consistent methodology for allocating direct and indirect costs. This includes A) Utilizing time certifications for staff whose work spans multiple foster care subprograms (e.g., ISFC, EISFC). B) Documenting allocation methods to ensure transparency and auditability. 3. Reconciliation Processes: Processes have been implemented to reconcile FC32 reports with functional expense statements and financial records to ensure consistency and accuracy. 4. Enhanced Training: Staff involved in financial reporting and cost allocation have received training on compliance with federal and state requirements, including proper preparation of FC32 reports. 5. System Enhancements: KFA is upgrading its financial management systems to facilitate accurate tracking of program-specific expenses and allocating costs to the appropriate funding sources.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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