Guernsey CountyLocal Government

Foster Care and Adoption Assistance Random Moment Sampling Finding Number: 2022-002 CFDA Number and Title: AL#93.658 - Foster Care-Title IV-E AL#93.659 - Adoption Assistance Federal Award Identification Number / Year: G-2022-11-5932 / G-2022-06-0057 / G-2223-11-5932 / G-2223-11-6932 Federal Agency: U.S. Department of Health and Human Services Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Pass-Through Entity: Ohio Department of Jobs and Family Services Repeat Finding from Prior Audit? YesNoncompliance and Material Weakness 45 C.F.R. § 75.405 (a) states, in part, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with the relative benefits received. In order for a cost to be allocable, it must benefit both the Federal award and other work of the non-Federal entity and be distributed in proportions that may be approximated using reasonable methods. In addition, Ohio Admin. Code 5101:9-7-20(E) outlines the procedures to be utilized for random moment sampling time studies (RMS) designed to measure activity regarding various Federal programs passed through the Ohio Department of Job and Family Services including those administered through the public Children Services Agency. These procedures include an employee completing the required comments section, within WebRMS, with comments that demonstrate that the selected program and activity codes supporting the work performed by the assigned position at the time of the observation and ensuring adequate backup documentation is available to verify the activity being performed. Ohio Admin. Code 5101:9-7-20(K) indicates that the Children Services shall retain documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. We noted two instances out of 25, or eight percent of the RMS hits tested did not agree to the Statewide Automated Child Welfare Information System (SACWIS) documentation, or there was no documentation in the SACWIS system provided to support the activities of the employee for the code charged. Failure to maintain support for these activities could cause incorrect charges to federal programs. We recommend Guernsey County Children Services provide a review to its employees of federal requirements and required documentation and develop a plan to reduce discrepancies between RMS and SACWIS. Officials’ Response: See Corrective Action Plan.

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 subreceipient?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 thecash 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 Reportis submitted. If the cash balance owed to ODH is not returned at the close of the grant, the second and subsequent payments for all other grants will be held until all outstanding cash balances are received.The federal expenditures reported and drawdowns requested by the Department?s Administrator were not supported by actual expenditures of the Department. The Department did eventually spend these funds on allowable program expenditures. However, the amounts reported in the Grants Management Information System (GMIS) to the Ohio Department of Health were not able to be traced to specific group of expenditures.We recommend the Department implement internal controls to ensure grant expenditures reported to and requested from the grantor agency be supported by specific identifiable disbursements.

45 C.F.R. ? 75.405 (a) states, in part, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with the relative benefits received. In order for a cost to be allocable, it must benefit both the Federal award and other work of the non-Federal entity and be distributed in proportions that may be approximated using reasonable methods. In addition, Ohio Admin. Code 5101:9-7-20(E) outlines the procedures to be utilized for random moment sampling time studies (RMS) designed to measure activity regarding various Federal programs passed through the Ohio Department of Job and Family Services including those administered through the public children services agency. These procedures include an employee completing the required comments section, within WebRMS, with comments that demonstrate that the selected program and activity codes supporting the work performed by the assigned position at the time of the observation and ensuring adequate backup documentation is available to verify the activity being performed. Ohio Admin. Code 5101:9-7-20(K) indicates that the Children Services shall retain documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. We noted two instances out of 25 or 8 percent of the RMS hits tested did not agree to the SACWIS documentation or there was no documentation in the SACWIS system provided to support the activities of the employee for the code charged. Failure to maintain support for these activities could cause incorrect charges to federal programs. We recommend Guernsey County Children Services provide a review to employees of federal requirements and documentation and develop a plan to reduce discrepancies between RMS and SACWIS.

2 CFR Subpart F ? 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Department?s financial statements which must include the total federal awards expended as determined in accordance with ? 200.502.At a minimum, the schedule must:(1) List individual Federal programs by Federal agency.(2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifyingnumber assigned by the pass-through entity must be included.(3) Provide total Federal awards expended for each individual Federal program and the ALN numberor other identifying number when the ALN information is not available.(4) Include the total amount provided to subrecipients from each Federal program.(5) For loan or loan guarantee programs described in ? 200.502 Basis for determining Federal awardsexpended, paragraph (b), identify in the notes to the schedule the balances outstanding at the endof the audit period.(6) Include notes that describe the significant accounting policies used in preparing the schedule, andnote whether or not the auditee has elected to use the 10 percent de minimis cost rate as coveredin ? 200.414 Indirect (F&A) costs.The Department?s internal control procedures did not identify various errors within the Schedule of Expenditures of Federal Awards, including but not limited to using incorrect expenses and omitting a certain federal program.Adjustments, to which management have agreed, are reflected in the accompanying Schedule. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.

2 CFR ? 300.1 gives regulatory effect to the Department of Health and Human Services for 2 CFR Part200-Uniform Administration on Requirements, Cost Principles, and audit requirements for Federal awards- Subpart D, requires that formal written policies that address Activities Allowed, Allowable Costs, Periodof Performance, Reporting, and Subrecipient Monitoring, among other requirements. The Department doesnot have written procedures for any of the requirements under Title 2.We recommend the Department review the requirements under Title 2, Uniform Guidance (UG). TheDepartment should adopt policies to address each requirement and ensure all personnel administering thegrant are aware of the requirements and follow the established policies, to help ensure the grantrequirements are met. These policies should be included in the Policy and Procedures Handbook.

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 subreceipient?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 thecash 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 Reportis submitted. If the cash balance owed to ODH is not returned at the close of the grant, the second and subsequent payments for all other grants will be held until all outstanding cash balances are received.The federal expenditures reported and drawdowns requested by the Department?s Administrator were not supported by actual expenditures of the Department. The Department did eventually spend these funds on allowable program expenditures. However, the amounts reported in the Grants Management Information System (GMIS) to the Ohio Department of Health were not able to be traced to specific group of expenditures.We recommend the Department implement internal controls to ensure grant expenditures reported to and requested from the grantor agency be supported by specific identifiable disbursements.

45 C.F.R. ? 75.405 (a) states, in part, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with the relative benefits received. In order for a cost to be allocable, it must benefit both the Federal award and other work of the non-Federal entity and be distributed in proportions that may be approximated using reasonable methods. In addition, Ohio Admin. Code 5101:9-7-20(E) outlines the procedures to be utilized for random moment sampling time studies (RMS) designed to measure activity regarding various Federal programs passed through the Ohio Department of Job and Family Services including those administered through the public children services agency. These procedures include an employee completing the required comments section, within WebRMS, with comments that demonstrate that the selected program and activity codes supporting the work performed by the assigned position at the time of the observation and ensuring adequate backup documentation is available to verify the activity being performed. Ohio Admin. Code 5101:9-7-20(K) indicates that the Children Services shall retain documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. We noted two instances out of 25 or 8 percent of the RMS hits tested did not agree to the SACWIS documentation or there was no documentation in the SACWIS system provided to support the activities of the employee for the code charged. Failure to maintain support for these activities could cause incorrect charges to federal programs. We recommend Guernsey County Children Services provide a review to employees of federal requirements and documentation and develop a plan to reduce discrepancies between RMS and SACWIS.

2 CFR Subpart F ? 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Department?s financial statements which must include the total federal awards expended as determined in accordance with ? 200.502.At a minimum, the schedule must:(1) List individual Federal programs by Federal agency.(2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifyingnumber assigned by the pass-through entity must be included.(3) Provide total Federal awards expended for each individual Federal program and the ALN numberor other identifying number when the ALN information is not available.(4) Include the total amount provided to subrecipients from each Federal program.(5) For loan or loan guarantee programs described in ? 200.502 Basis for determining Federal awardsexpended, paragraph (b), identify in the notes to the schedule the balances outstanding at the endof the audit period.(6) Include notes that describe the significant accounting policies used in preparing the schedule, andnote whether or not the auditee has elected to use the 10 percent de minimis cost rate as coveredin ? 200.414 Indirect (F&A) costs.The Department?s internal control procedures did not identify various errors within the Schedule of Expenditures of Federal Awards, including but not limited to using incorrect expenses and omitting a certain federal program.Adjustments, to which management have agreed, are reflected in the accompanying Schedule. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit.

2 CFR ? 300.1 gives regulatory effect to the Department of Health and Human Services for 2 CFR Part200-Uniform Administration on Requirements, Cost Principles, and audit requirements for Federal awards- Subpart D, requires that formal written policies that address Activities Allowed, Allowable Costs, Periodof Performance, Reporting, and Subrecipient Monitoring, among other requirements. The Department doesnot have written procedures for any of the requirements under Title 2.We recommend the Department review the requirements under Title 2, Uniform Guidance (UG). TheDepartment should adopt policies to address each requirement and ensure all personnel administering thegrant are aware of the requirements and follow the established policies, to help ensure the grantrequirements are met. These policies should be included in the Policy and Procedures Handbook.

45 C.F.R. ? 75.405 (a) states, in part, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with the relative benefits received. In order for a cost to be allocable, it must benefit both the Federal award and other work of the non-Federal entity and be distributed in proportions that may be approximated using reasonable methods. In addition, Ohio Admin. Code ? 5101:9-7-20(E) outlines the procedures to be utilized for random moment sampling time studies (RMS) designed to measure activity regarding various Federal programs passed through the Ohio Department of Job and Family Services including those administered through the public children services agency. These procedures include an employee completing the required comments section, within WebRMS, with comments that demonstrate that the selected program and activity codes supporting the work performed by the assigned position at the time of the observation and ensuring adequate backup documentation is available to verify the activity being performed. Ohio Admin. Code ? 5101:9-7-23(K) indicates that the CSEA shall retain documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. We noted four instances out of 25 or 16 percent of the RMS hits tested did not agree to the SACWIS documentation or there was no documentation in the SACWIS system provided to support the activities of the employee for the code charged. Failure to maintain support for these activities could cause incorrect charges to federal programs. We recommend Guernsey County Children Services provide a review to employees of federal requirements and documentation and develop a plan to reduce discrepancies between RMS and SACWIS.

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