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7 <br /> 1 . Transfer of Funds: There are two categories of public funds <br /> that could be transferred to the private non-profit: Title XX <br /> staff funds and purchase of care funds. The mechanism for this <br /> transfdr is by contract between DSS and the private non-profit. <br /> 2. Liability: Though MS could contract with a private non-profit <br /> for expenditure of day care funds and the delivery of day care <br /> services, liability, in the event of contracting, would remain <br /> with the DSS. <br /> 3. Monitoring and Accountability: Though, in a contracting arrange- <br /> ', ment, Orange County would retain liability for a private non- <br /> profit's non-compliance with federal and/or state regulations, <br /> or theImisapplication of funds, there are a number of mechanisms <br /> available to mitigate this occurrence. <br /> a. The optimal arrangement would be for the County to <br /> retain control over the handling of all funds. In <br /> this arrangement, the private non-profit would be <br /> responsible for all programmatic areas while the <br /> County would retain all accounting, check writing <br /> and other fiscal functions. <br /> b. An alternative arrangement would be to vest all <br /> programmatic and fiscal functions with the private <br /> non-profit. The County could mitigate its liability <br /> in this arrangement by requiring of the private <br /> non-profit the following: <br /> 1. The County could require the private non- <br /> profit to undergo an annual financial and <br /> compliance audit by an independent accounting <br /> firm. <br /> 2. The County could require the private non- <br /> , profit to establish specific accounting <br /> procedures and internal controls to insure <br /> sound financial management. <br /> 3. The County could require the private non- <br /> - profit to adopt an annual budget and submit <br /> monthly financial reports. <br /> 4. The County could stipulate in the contract <br /> that the private non-profit shall be respon- <br /> sible for any costs or expenses incurred as <br /> a result of any acts or omissions by the <br /> private non-profit or any of its officers, <br /> agents or employees. <br /> fe <br />