Audit 333188

FY End

2023-12-31

Total Expended

$3.40M

Findings

4

Programs

3

Organization: Knotts Family Agency (CA)

Year: 2023 Accepted: 2024-12-17

Auditor: Oscar G Armijo CPA

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
515148	2023-004	Material Weakness	-	Activities Allowed/Unallowed
515149	2023-005	Material Weakness	-	L
1091590	2023-004	Material Weakness	-	Activities Allowed/Unallowed
1091591	2023-005	Material Weakness	-	L

ALN	Program	Spent	Major
93.658	Foster Care Title IV-E	$247,036	Yes
93.558	Temporary Assistance for Needy Families	$160,446	-
93.659	Adoption Assistance	$81,776	-

Contacts

Name	Title	Type
E11MGP4KHMF5	Sandy Oquin	Auditee
9098800600	Oscar G. Armijo, CPA	Auditor
No contacts on file

Notes to SEFA

Title: 1 Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Knotts Family Agency, Inc. under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operation of Knotts Family Agency, Inc. it is not intended to and does not present the financial position, changes in the net assets, or cash flow of Knotts Family Agency, Inc. De Minimis Rate Used: N Rate Explanation: Knotts Family Agency, Inc. has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Title: 2 Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Knotts Family Agency, Inc. under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operation of Knotts Family Agency, Inc. it is not intended to and does not present the financial position, changes in the net assets, or cash flow of Knotts Family Agency, Inc. De Minimis Rate Used: N Rate Explanation: Knotts Family Agency, Inc. has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Knotts Family Agency, Inc. has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Finding Details

Finding 2023-004

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.

Finding 2023-005

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.

Finding 2023-004

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.

Finding 2023-005

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.