Audit of The Key Program Incorporated

This is a state performance audit of The Key Program Incorporated, a nonprofit human-service organization, covering July 1, 2013 through June 30, 2016.

“I am pleased to provide this performance audit of The Key Program Incorporated.”

The state wanted to know whether Massachusetts funds and surpluses were being used only for Massachusetts programs, and whether shared administrative costs were divided properly between Massachusetts and Rhode Island work.

“The purpose of this audit was to determine whether Key was using its Massachusetts revenue and surpluses only for Massachusetts programs and was properly allocating its administrative expenses between its Massachusetts and Rhode Island operations.”

The Key Program received most of its money from Massachusetts, so taxpayers have an interest in whether that money was used correctly.

“The Commonwealth of Massachusetts is Key’s principal source of revenue.”

If you are a Massachusetts resident, this audit gives some assurance that the state money reviewed was not found to be misused for out-of-state programs or wrongly assigned costs.

“Did Key use the Commonwealth’s resources exclusively for Massachusetts programs?”

The auditor answered yes to both main questions: Massachusetts resources were used for Massachusetts programs, and administrative and indirect costs were allocated correctly.

“Did Key allocate the correct amounts of administrative and indirect costs to its Massachusetts and out-of-state programs?”

The report does not list corrective actions or required follow-up, because it did not report significant noncompliance in the areas reviewed.

“Our audit revealed no significant instances of noncompliance by Key that must be reported under generally accepted government auditing standards in the areas covered by our audit objective.”

This was part of a broader state effort to watch human-service contracts and make them more accountable, transparent, and cost-effective.

“This audit was conducted as part of OSA’s ongoing efforts to audit human-service contracting activity by state agencies and to promote accountability, transparency, and cost effectiveness in state contracting.”

Administrative and indirect costs are shared operating costs, not tied to just one program, that had to be divided between Key’s Massachusetts and Rhode Island programs.

“We also assessed the method Key used to allocate its administrative and indirect costs to its programs to make sure that this method was allowable and that the allocations were correctly calculated.”