Adams County

Material Weakness/Noncompliance – Suspension and Debarment 31 CFR 19 gives regulatory effect to the Department of Treasury for 2 CFR Section 180.305 which states that Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principles are suspended or debarred, unless the Federal agency responsible for the transaction grants an exception under 2 CFR Section 180.135. “Covered transactions” include nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between a participant in a covered transaction and another person. Procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) are covered transactions if the contracts are expected to equal or exceed $25,000 or meet certain other specified criteria outlined in 2 CFR § 180.220s. All nonprocurement transactions (i.e. subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless listed in the exemptions in 2 CFR § 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available (Sam.gov), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR 180.300). The County did not have the proper internal controls in place to verify that all entities, with whom the County had entered into covered transactions, had not been suspended or debarred. Due to the deficient internal control structure, the required verification was not completed for any of the vendors sampled with covered transactions in the Coronavirus State and Local Fiscal Recovery Funds during Fiscal Year 2024. Those transactions had a payment to a vendor of equal or greater than $25,000 and there was no evidence the County checked the SAM exclusions, collected a certification from the entity, or added a clause or condition to the covered transaction with the vendor. Failing to have the appropriate internal controls in place may result in suspended or debarred vendors receiving federal funds. Prior to contracting with vendors that will be paid with federal funds, the County should verify the vendor is not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor.

Material Weakness/Noncompliance – Allowable Costs/Cost Principles 2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; During testing we noted that the County Commissioner’s department did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.

Material Weakness/Noncompliance – Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Special Tests and Provisions – Payment Rate Setting and Application 2 CFR Part 200, Subpart E and appendices III-VII establish principles and standards for determining allowable direct and indirect costs for Federal awards. • Be necessary and reasonable for the performance of the Federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. • Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the Federal award as to types or amount of cost items. • Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. • Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. • Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian tribes only, as otherwise provided for in 2 CFR Part 200. • Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period. • Be adequately documented. 45 CFR Section 1356.21(m)(1) and 45 CFR Section 1356.60 (a)(1) and (c) establish guidelines for proper allocation of rates between maintenance and administrative expenditures in conformance with cost principles. Maintenance and administrative expenditure payments need to be properly calculated and in accordance with Title IV-E agency’s policies to ensure only allowable costs are charged to the program. Rates used should be based upon established payment rates per the Title IV-Es agency’s rate schedule for maintenance and administrative costs. The agency should establish foster care maintenance and administrative expenditure payment rates which provide only for costs which are necessary for the proper and efficient administration of the program, and which are for allowable costs Further, periodic review of payment rates should be performed to ensure the rates’ continuing appropriateness. During testing we identified instances where amounts claimed did not agree to amounts invoiced by providers. In addition, we identified several instances where the amount reimbursed was not calculated correctly. There were instances of over and underpayments as a result of clerical errors in rates entered into the SAWCIS, the statewide automated child welfare information system that assists in payment processing and case management. These over/under payments resulted in noncompliance with activities allowed or unallowed, allowable costs/cost principles, and special tests and provisions – payment rate setting and application as described above. We recommend the Children Services department implement additional monitoring procedures to ensure amounts claimed and amounts requested for reimbursement are input correctly and calculated in accordance with applicable compliance requirements.

2 CFR 200 outlines the following policies required for a County spending for Foster Care Title IV-E funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; During testing we noted that the County Children Services department did not have sufficient written policies addressing the above requirement. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.

See Schedule of Findings and Questioned Costs for table. Noncompliance / Significant Deficiency 2 CFR ?1000 gives regulatory effect to the Department of Treasury for 2 CFR section 200.302 which notes the data elements for collection of financial information. Section E2.2 of the Ohio Department of Health (ODH) Grants Administration Policy and Procedures Manual states, "Subgrantee Monthly and Quarterly Expenditure Reports must be completed and submitted via GMIS within 15 calendar days following the end of the reporting period, which is designated in the RFP." Paragraph 4 of this section further states, "the monthly or quarterly report must be based on the subrecipient?s accounting records and supporting documentation, and all documents must be maintained by the subrecipient for review by ODH staff. The reporting of expenditures and revenues must be on the cash basis; thereby reporting actual expenses paid during the month or quarter." Section E2.3 of the Ohio Department of Health (ODH) Grants Administration Policy and Procedures Manual states, "the Subrecipient Final Expense Report and any overpayments must be submitted to ODH within thirty five (35) calendar days following the end of the grant year. The Subrecipient Final Expense Report details the total expenditures for the project period. No extensions will be granted for Final Expense Reports. The information contained in this report must reflect the project accounting records and supporting documentation. Any cash balances must be returned to ODH when the Subrecipient Final Expense Report is submitted. If the cash balance owed to ODH is not returned at the close of the grant, the second and subsequent payment(s) for all other grants will be held until all outstanding cash balances are received. The District improperly reported $4,157 additional expenditures on the Final Expense Report than what was reflected in the District accounting records for the Coronavirus-19 Contact Tracing grant. The District should implement internal control procedures to ensure the Final Expense Report is supported by actual expenditures of the District for the report period. Procedures should include supervisory review to ensure the completeness and accuracy of the reports prior to submission.

See Schedule of Findings and Questioned Costs for table. Noncompliance / Material Weakness 45 CFR part 75 gives regulatory effect to the Department of Health and Human Services for 2 CFR sections 200.420 through 200.476. These sections provide the principles to be applied in establishing the allowability of certain items of cost. Section B2.4 of the Ohio Department of Health (ODH) Grants Administration Policy and Procedures Manual states, "Compensation must follow the Ohio Department of Administrative Services regulations and meet federal merit system or other requirements, where applicable. Federal guidelines require subrecipients to maintain Time and Activity or Time and Effort reporting to verify time worked for all employees who are charged less than 100% to a specific funding source." The District Fiscal Officer and Health Commissioner were paid out of the Preventative Health and Health Services Block Grant federal program, in the amount of $7,695; however, they did not maintain Time and Effort sheets that indicated the time spent working on the grant. Failure to complete time and effort sheets could result in the District not meeting federal compliance requirements in the future and could result in questioned costs for the federal program. The District should complete time and effort sheets for any employee who is not paid 100% from a single funding source.

See Schedule of Findings and Questioned Costs for table. Noncompliance / Material Weakness 45 CFR part 75 gives regulatory effect to the Department of Health and Human Services for 2 CFR section 200.313 which provides the requirements for equipment and property purchased with federal awards. The 2017 Ohio Department of Health Grants Administrative Policies and Procedures Manual states in part that, the subgrantee must maintain procedures for managing equipment, including replacing equipment, until the transfer, replacement, or disposition of the equipment occurs, even if the grant has terminated. The equipment management system must meet the following minimum requirements: 1. An accurate property record-keeping system shall be maintained for equipment costing $1,000 or more. These records are subject to the conditions regarding retention, maintenance, and accessory. For each item of equipment, the records shall include: a. A description of the equipment, including manufacturer?s model number, if any b. An identification number, such as the manufacturer?s serial number c. Asset tag number d. Identification of the grant under which the equipment was acquired e. The information needed to calculate the program share of the equipment f. Acquisition date and unit acquisition cost g. Location, use and condition of the equipment and the dates of physical inventory h. All pertinent information on the ultimate transfer, replacement or disposition of the equipment 2. Equipment must be tagged with an asset tag number and marked as property of the appropriate funding project. 3. A physical inventory shall be taken and the results reconciled with the property records at least once every two years to verify the existence, current value, utilization and continued need for the equipment unless an annual inventory is specified in the program specific RFP. 4. A control system shall be in effect to ensure adequate safeguards to prevent loss, damage, or theft of equipment. Any loss, damage, or theft of equipment shall be investigated, fully documented, and reported to the GSU Chief in writing. It is the subgrantee?s obligation to replace any lost, damaged, or stolen equipment. 5. The subgrantee shall implement adequate maintenance procedures to keep the equipment in good condition. Any program equipment determined to be inoperative shall be reported to the GSU Chief and the ODH Program Administrator who funded the purchase in writing. The District did not maintain a listing of inventory that was purchased with Preventative Health and Health Services Block Grant funds. Furthermore, no physical inventory has been taken for equipment purchased. This could result in the misallocation of assets purchased with federal monies. The District should prepare an inventory listing that complies with the standards outlined by the Ohio Department of Health. The District should also complete a physical inventory as required.

See Schedule of Findings and Questioned Costs for table. Noncompliance / Significant Deficiency 45 CFR part 75 gives regulatory effect to the Department of Health and Human Services for 2 CFR section 200.302 which notes the data elements for collection of financial information. Section E2.2 of the Ohio Department of Health (ODH) Grants Administration Policy and Procedures Manual states, "Subgrantee Monthly and Quarterly Expenditure Reports must be completed and submitted via GMIS within 15 calendar days following the end of the reporting period, which is designated in the RFP." Paragraph 4 of this section further states, "The monthly or quarterly report must be based on the subrecipient?s accounting records and supporting documentation, and all documents must be maintained by the subrecipient for review by ODH staff. The reporting of expenditures and revenues must be on the cash basis; thereby reporting actual expenses paid during the month or quarter." Section E2.3 of the Ohio Department of Health (ODH) Grants Administration Policy and Procedures Manual states, "the Subrecipient Final Expense Report and any overpayments must be submitted to ODH within thirty five (35) calendar days following the end of the grant year. The Subrecipient Final Expense Report details the total expenditures for the project period. No extensions will be granted for Final Expense Reports. The information contained in this report must reflect the project accounting records and supporting documentation. Any cash balances must be returned to ODH when the Subrecipient Final Expense Report is submitted. If the cash balance owed to ODH is not returned at the close of the grant, the second and subsequent payment(s) for all other grants will be held until all outstanding cash balances are received. The District misstated expenditures on the March, June, and November Monthly Expenditure Report by ($1,456), $13,877, and $717, respectively for the Preventative Health and Health Services Block Grant. The District also improperly reported $8,309 of additional expenditures on the Final Expense Report than what was reflected in the District accounting records. The District should implement internal control procedures to ensure Monthly Expenditures Reports and the Final Expense Report are supported by actual expenditures of the District for the reporting period. Procedures should include supervisory review to ensure the completeness and accuracy of the reports prior to submission.