LORAIN COUNTY GENERAL HEALTH DISTRICTLocal Government

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.302 states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted quarterly must be due no later than 30 calendar days after the reporting period. 31 CFR 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information in its 2021 interim final rule on reporting requirements for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its Project and Expenditure Report User Guide for State and Local Fiscal Recovery Funds. The 2021 interim rule supplementary information, part VIII states that counties will be required to submit quarterly Project and Expenditure reports through the end of the award period on December 31, 2026. The Department of Treasury’s Project and Expenditure Report User Guide provides, in part, that counties with a population that exceeds 250,000 residents must submit a Project and Expenditure Report by January 31, 2022 and then the last day of the month after the end of each quarter thereafter. The County did not have proper internal controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports. During testing of Project and Expenditure Reports for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027), we noted that: • The County did not submit the Project and Expenditure Reports for the second and fourth quarters by the required deadlines of July 31, 2024 and January 31, 2025, respectively. • On the first quarter Project and Expenditure Report, the County understated current period expenditures by $1,041,688, understated cumulative expenditures by $11,564,350, and understated cumulative obligations by $1,407,879. Similarly, on the third quarter Project and Expenditure Report, the County understated current period expenditures by $385.732, understated the cumulative expenditures by $13,169,950, and understated cumulative obligations by $1,407,879. Failure to have the proper controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports could result in Treasury taking action against the County for failure to comply with programmatic requirements. The County should implement and have controls in place to ensure the quarterly Project and Expenditure Reports are accurate and filed by the required due dates.

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.302 states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted quarterly must be due no later than 30 calendar days after the reporting period. 31 CFR 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information in its 2021 interim final rule on reporting requirements for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its Project and Expenditure Report User Guide for State and Local Fiscal Recovery Funds. The 2021 interim rule supplementary information, part VIII states that counties will be required to submit quarterly Project and Expenditure reports through the end of the award period on December 31, 2026. The Department of Treasury’s Project and Expenditure Report User Guide provides, in part, that counties with a population that exceeds 250,000 residents must submit a Project and Expenditure Report by January 31, 2022 and then the last day of the month after the end of each quarter thereafter. The County did not have proper internal controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports. During testing of Project and Expenditure Reports for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027), we noted that: • The County did not submit the Project and Expenditure Reports for the second and fourth quarters by the required deadlines of July 31, 2024 and January 31, 2025, respectively. • On the first quarter Project and Expenditure Report, the County understated current period expenditures by $1,041,688, understated cumulative expenditures by $11,564,350, and understated cumulative obligations by $1,407,879. Similarly, on the third quarter Project and Expenditure Report, the County understated current period expenditures by $385.732, understated the cumulative expenditures by $13,169,950, and understated cumulative obligations by $1,407,879. Failure to have the proper controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports could result in Treasury taking action against the County for failure to comply with programmatic requirements. The County should implement and have controls in place to ensure the quarterly Project and Expenditure Reports are accurate and filed by the required due dates.

The County did not have proper internal controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports. During testing of Project and Expenditure Reports for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027).

The District failed to obtain the proper documentation from the contractors for the subgrants showing that proper procurement methods were followed by Lorain/Medina Community Based Correctional Facility, The Road to Hope, Inc. and Avon Oaks Caring Community.  Due to a lack of control over procurement requirements the contractors did not obtain price or rate quotations from more than one qualified source, but based their purchases on past selections from a three-quote comparison in years past and negotiated contract rates below the market rate in accordance with the organization’s normal operating procedures.

The District's contractors that carried out the Confinement Facilities subgrant (CF0123) and Congregate Living Settings subgrant (LV0123) purchased various equipment totaling $231,299 and $549,434, respectively, for a total amount of $780,733 with the COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease (ELC) grant.  Due to deficiencies in inventory controls, the assets were not added to the District's inventory system.

The County did not have proper internal controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports. During testing of Project and Expenditure Reports for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds (AL #21.027).

The District failed to obtain the proper documentation from the contractors for the subgrants showing that proper procurement methods were followed by Lorain/Medina Community Based Correctional Facility, The Road to Hope, Inc. and Avon Oaks Caring Community.  Due to a lack of control over procurement requirements the contractors did not obtain price or rate quotations from more than one qualified source, but based their purchases on past selections from a three-quote comparison in years past and negotiated contract rates below the market rate in accordance with the organization’s normal operating procedures.

The District's contractors that carried out the Confinement Facilities subgrant (CF0123) and Congregate Living Settings subgrant (LV0123) purchased various equipment totaling $231,299 and $549,434, respectively, for a total amount of $780,733 with the COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease (ELC) grant.  Due to deficiencies in inventory controls, the assets were not added to the District's inventory system.

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.332 states, in part, that all pass-through entities must: • Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information noted at 2 CFR 200.332(a) at the time of the subaward; • Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, described in paragraphs (d) and (e) of 2 CFR 200.332; • Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208; • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that the subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include those items listed in 2 CFR 200.332(d); • Verify every subrecipient is audited as required by Subpart F of 2 CFR 200.332 when it is expected that the subrecipient’s Federal award expended equal or exceed the threshold set forth in 2 CFR 200.501; • Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records; and • Consider taking enforcement action against noncompliant subrecipients as described in 2 CFR 200.339 and in program regulations. The County did not have written subrecipient agreements for three of three (100%) tested subrecipients of Coronavirus State and Local Fiscal Recovery Funds (AL #21.027). The County did not have the proper internal controls in place to verify that subawards were identified to the subrecipient nor that the subrecipients were evaluated for risk or their award activities were monitored. A subrecipient agreement is one method that would allow the County to support the performance of risk assessment, that every subaward is clearly identified to the subrecipient as a subaward and includes required federal award identification information, and to support the determination of and the completion of monitoring activities. Failure to have proper oversight and training procedures over the County’s divisions to ensure the implementation of subrecipient monitoring requirements can lead to weaknesses with internal controls and compliance over subrecipient monitoring, as well as risk that subrecipients are not aware that the award is a Federal award or that noncompliance is not identified by the County. The County should implement policies and procedures to ensure that subrecipient agreements are in place for all subrecipients of Federal funding and monitoring procedures are properly performed for all subrecipients.

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted quarterly must be due no later than 30 calendar days after the reporting period. 31 CFR 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information in its interim final rule on reporting requirements for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its User Guide: Treasury’s Portal for Recipient Reporting (User Guide). The interim rule supplementary information, part VIII states that counties will be required to submit quarterly Project and Expenditure reports through the end of the award period on December 31, 2026. The Department of Treasury’s User Guide provides, in part, that counties with a population that exceeds 250,000 residents must submit a Project and Expenditure Report by January 31, 2022 and then the last day of the month after the end of each quarter thereafter. The County did not have proper internal controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports. During testing of Project and Expenditure Reports for the Coronavirus State and Local Fiscal Recovery Funds (AL #21.027), we noted that: • The County did not submit the Project and Expenditure Reports for the third and fourth quarters by the required deadlines of October 31, 2022 and January 31, 2023, respectively, due to technical difficulties upon submission, and did not contact the U.S. Department of Treasury for assistance with their technical difficulties until January 26, 2023; and • The County excluded $23,000 of expenditures from the second quarter Project and Expenditure Report Failure to have the proper controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports could result in Treasury taking action against the County for failure to comply with programmatic requirements. The County should implement and have controls in place to ensure the quarterly Project and Expenditure Reports are accurate and filed by the required due dates.

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.332 states, in part, that all pass-through entities must: • Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information noted at 2 CFR 200.332(a) at the time of the subaward; • Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, described in paragraphs (d) and (e) of 2 CFR 200.332; • Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208; • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that the subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include those items listed in 2 CFR 200.332(d); • Verify every subrecipient is audited as required by Subpart F of 2 CFR 200.332 when it is expected that the subrecipient’s Federal award expended equal or exceed the threshold set forth in 2 CFR 200.501; • Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records; and • Consider taking enforcement action against noncompliant subrecipients as described in 2 CFR 200.339 and in program regulations. The County did not have written subrecipient agreements for three of three (100%) tested subrecipients of Coronavirus State and Local Fiscal Recovery Funds (AL #21.027). The County did not have the proper internal controls in place to verify that subawards were identified to the subrecipient nor that the subrecipients were evaluated for risk or their award activities were monitored. A subrecipient agreement is one method that would allow the County to support the performance of risk assessment, that every subaward is clearly identified to the subrecipient as a subaward and includes required federal award identification information, and to support the determination of and the completion of monitoring activities. Failure to have proper oversight and training procedures over the County’s divisions to ensure the implementation of subrecipient monitoring requirements can lead to weaknesses with internal controls and compliance over subrecipient monitoring, as well as risk that subrecipients are not aware that the award is a Federal award or that noncompliance is not identified by the County. The County should implement policies and procedures to ensure that subrecipient agreements are in place for all subrecipients of Federal funding and monitoring procedures are properly performed for all subrecipients.

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted quarterly must be due no later than 30 calendar days after the reporting period. 31 CFR 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information in its interim final rule on reporting requirements for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its User Guide: Treasury’s Portal for Recipient Reporting (User Guide). The interim rule supplementary information, part VIII states that counties will be required to submit quarterly Project and Expenditure reports through the end of the award period on December 31, 2026. The Department of Treasury’s User Guide provides, in part, that counties with a population that exceeds 250,000 residents must submit a Project and Expenditure Report by January 31, 2022 and then the last day of the month after the end of each quarter thereafter. The County did not have proper internal controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports. During testing of Project and Expenditure Reports for the Coronavirus State and Local Fiscal Recovery Funds (AL #21.027), we noted that: • The County did not submit the Project and Expenditure Reports for the third and fourth quarters by the required deadlines of October 31, 2022 and January 31, 2023, respectively, due to technical difficulties upon submission, and did not contact the U.S. Department of Treasury for assistance with their technical difficulties until January 26, 2023; and • The County excluded $23,000 of expenditures from the second quarter Project and Expenditure Report Failure to have the proper controls in place to ensure the timely and accurate submission of the Project and Expenditure Reports could result in Treasury taking action against the County for failure to comply with programmatic requirements. The County should implement and have controls in place to ensure the quarterly Project and Expenditure Reports are accurate and filed by the required due dates.