PORTAGE COUNTY

Criteria: 2 C.F.R. § 200.328 states, in part, this information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. Condition: The Mental Health and Recovery Board of Portage County failed to submit the final expenditures report to the Ohio Department of Mental Health and Addiction Services for both awards under the State Opioid Response Grant Program by the November 15, 2024 deadline. Context: During our review of the GFMS reporting system, the reports were subsequently filed on February 21, 2025. However, the County was unable to provide a copy of the report submitted in the system. This is the result of the County not having effective internal controls over reporting requirements. Cause: The County did not have effective internal controls to help ensure that all reporting requirements were met as required by the grant agreement. The lack of internal controls could result in the County failing to track grants appropriately, as well as, submitting late and/or inaccurate reports leading to further noncompliance. Effect: Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency. Recommendation: We recommend the County improve controls over the reporting requirements associated with this program. This includes obtaining a better understanding of the reporting processes.

The U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Award Terms and Conditions signed by the County includes, in Section 9(b), that the award is subject to 2 CFR Part 180 and Treasury’s implementing regulation at 31 CFR Part 19. 2 CFR 180.305 states that Non-Federal entities are prohibited from entering into a covered transaction with parties that are suspended or debarred or whose principals are suspended or debarred, unless the Federal agency responsible for the transaction grants an exception under 2 CFR § 180.135. 2 CFR 180.200 identifies “covered transactions” as 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 § 180.220. All nonprocurement transactions (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless exempt by 2 CFR § 180.215. When a non-Federal entity enters into a covered transaction, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking SAM exclusions (https://sam.gov ); collecting a certification from the entity, or adding a clause or condition to the covered transactions with that entity. 31 CFR Part 19 has analogous provisions to 2 CFR Part 180. 31 CFR § 19.100 states that Part 19 adopts a governmentwide system of debarment and suspension for Department of Treasury nonprocurement activities. 31 CFR § 19.305 prohibits participants from entering into a covered transaction with an excluded person unless the Department of Treasury grants an exception and prohibits participants from entering into any transaction with a disqualified person unless the participant has obtained an exception under the disqualifying statute, Executive order, or regulation. 31 CFR § 19.200 identifies “covered transactions” as nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at a lower tier, between a participant in a covered transaction and another person. 31 CFR § 19.220(b)(1) specifically provides that a contract for goods or services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction covered under § 19.210, and the amount of the contract is expected to equal or exceed $25,000. Under 31 CFR § 19.210, all nonprocurement transactions, as defined in § 19.970, are covered transactions unless listed in § 19.215. 31 CFR § 19.300 provides that when entering into a covered transaction with another person at the next lower tier, the participant must verify that the person at the lower tier is not excluded or disqualified. This may be done by checking the EPLS (Excluded Parties List System), collecting a certification from that person if allowed by this rule, or adding a clause or condition to the covered transaction with that person. 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. During testing of non-payroll expenditures for the Coronavirus State and Local Fiscal Recovery Funds, we noted three instances in which the program had a payment or contract to a vendor of more 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 prior to payment issuance. Due to the deficient internal control structure, the required verifications were not completed for the three covered transaction in the Coronavirus State and Local Fiscal Recovery Funds until November, 2023, which was after the vendor payments were issued. Failing to have adequate controls in place may result in vendors receiving federal funds that are suspended or debarred. 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.

2 C.F.R. § 200.328 states, in part, this information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Mental Health and Recovery Board of Portage County failed to submit the final expenditures report to the Ohio Department of Mental Health and Addiction Services for both awards under the State Opioid Response Grant Program. The reports were subsequently filed on October 21, 2024, 342 days after the required due date. This is the result of the County not having effective internal controls over reporting requirements. Noncompliance with grant requirements could have an adverse effect on future grant awards by the awarding agency. The County did not have effective internal controls to help ensure that all reporting requirements were met as required by the grant agreement. The lack of internal controls could result in the County failing to track grants appropriately, as well as, submitting late and/or inaccurate reports leading to further noncompliance.

The U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Award Terms and Conditions signed by the County includes, in Section 9(b), that the award is subject to 2 CFR Part 180 and Treasury?s implementing regulation at 31 CFR Part 19. 2 CFR 180.305 states that Non-Federal entities are prohibited from entering into a covered transaction with parties that are suspended or debarred or whose principals are suspended or debarred, unless the Federal agency responsible for the transaction grants an exception under 2 CFR ? 180.135. 2 CFR 180.200 identifies ?covered transactions? as 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 ? 180.220. All nonprocurement transactions (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless exempt by 2 CFR ? 180.215. When a non-Federal entity enters into a covered transaction, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking SAM exclusions (https://sam.gov ); collecting a certification from the entity, or adding a clause or condition to the covered transactions with that entity. 31 CFR Part 19 has analogous provisions to 2 CFR Part 180. 31 CFR ? 19.100 states that Part 19 adopts a governmentwide system of debarment and suspension for Department of Treasury nonprocurement activities. 31 CFR ? 19.305 prohibits participants from entering into a covered transaction with an excluded person unless the Department of Treasury grants an exception and prohibits participants from entering into any transaction with a disqualified person unless the participant has obtained an exception under the disqualifying statute, Executive order, or regulation. 31 CFR ? 19.200 identifies ?covered transactions? as nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at a lower tier, between a participant in a covered transaction and another person. 31 CFR ? 19.220(b)(1) specifically provides that a contract for goods or services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction covered under ? 19.210, and the amount of the contract is expected to equal or exceed $25,000. Under 31 CFR ? 19.210, all nonprocurement transactions, as defined in ? 19.970, are covered transactions unless listed in ? 19.215. 31 CFR ? 19.300 provides that when entering into a covered transaction with another person at the next lower tier, the participant must verify that the person at the lower tier is not excluded or disqualified. This may be done by checking the EPLS (Excluded Parties List System), collecting a certification from that person if allowed by this rule, or adding a clause or condition to the covered transaction with that person. 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. During testing of non-payroll expenditures for the Coronavirus State and Local Fiscal Recovery Funds, we noted four instances in which the program had a payment or contract to a vendor of more 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. Due to the deficient internal control structure, the required verifications were not completed for the four covered transaction in the Coronavirus State and Local Fiscal Recovery Funds during Fiscal Year 2022. Failing to have the appropriate controls in place may result in vendors receiving federal funds that are suspended or debarred. 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.

2 C.F.R. ? 200.303 provides that non-Federal recipients and subrecipients of a Federal award must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. The County could not provide support for the encumbrances of $578,210 of the $1,298,218 reported as obligated/encumbered for the reporting period of March 1, 2020 to September 30, 2020. We were unable to substantiate the total amount reported by the County. The County has not established effective internal controls over retention of reporting records, which support the amounts reported to OBM. Failure to maintain appropriate records and supporting documentation could result in reporting errors or the misuse of federal funds. The County should retain adequate records and supporting documentation for all the balances reported to OBM