Trumbull County

Finding 2024-003 – Material Weakness/Reporting Noncompliance COVID-19 Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 U.S. DEPARMENT OF TREASURY Criteria: The U.S. Department of Treasury established reporting requirements for local governments. These requirements established methods and timelines for reporting Coronavirus State and Local Fiscal Recovery Funds (SLFRF expenditures to the U.S. Department of Treasury). Condition: The County misidentified contractors and beneficiaries as subrecipients on the quarterly reports to Treasury. Context: During our review of the quarterly project and expenditure reports, we noted the County improperly reported 70 and 82 contractors and beneficiaries as subrecipients on the 2024 Quarter 2 and 3 SLFRF Compliance Reports, respectively. Cause: Lack of sufficient internal controls over the reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds. Effect: The County was not in compliance with reporting requirements in 2024. 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 in the Treasury reporting portal.

Finding 2023-002 – Material Weakness/Reporting Noncompliance COVID-19 Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 U.S. DEPARMENT OF TREASURY Criteria: The U.S. Department of Treasury established reporting requirements for local governments. These requirements established methods and timelines for reporting Coronavirus State and Local Fiscal Recovery Funds (SLFRF expenditures to the U.S. Department of Treasury) Condition: The County misidentified contractors and beneficiaries as subrecipients on the quarterly reports to Treasury. Context: During our review of the quarterly project and expenditure reports, we noted the County improperly reported 22 and 33 contractors and beneficiaries as subrecipients on the 2023 Quarter 1 and 3 SLFRF Compliance Reports, respectively. Cause: Lack of sufficient internal controls over the reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds. Effect: The County was not in compliance with reporting requirements in 2023. 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 in the Treasury reporting portal.

2 C.F.R. Subpart F 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the County'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 identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL 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 awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in 200.414 Indirect (F&A) costs. 2 CFR Part 170 "subaward" has the meaning given in 2 CFR 200.1 and means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. The County's Federal Schedule had the following error: Funds provided to subrecipients for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) were understated by $3,000,000. Errors and omissions to the Schedule of Expenditures of Federal Awards could adversely affect future grant awards in addition to causing an inaccurate assessment of major federal programs that would be subjected to audit. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. County management should review all grant and loan awards and be familiar with federal reporting requirements. The County should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This may help ensure the Schedule is complete and accurate and major federal programs are correctly identified for audit.

2 C.F.R. Subpart F ? 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the County'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 identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL 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 awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in ? 200.414 Indirect (F&A) costs. The County's Federal Schedule had the following error: Expenditures for the Medicaid Assistance Program - MAC (AL 93.778), passed through the Ohio Department of Developmental Disabilities (ODODD), were overstated by $1,285,156 based on the confirmation provided by ODODD. Errors and omissions to the Schedule of Expenditures of Federal Awards could adversely affect future grant awards in addition to causing an inaccurate assessment of major federal programs that would be subjected to audit. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. County management should review all grant and loan awards and be familiar with federal reporting requirements. The County should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This may help ensure the Schedule is complete and accurate and major federal programs are correctly identified for audit.

2 CFR section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. While testing eligibility for the TANF program, it was determined that two out of forty tested applications were not signed off on by both the applicant and a representative of JFS. This is a 5% error rate. The County should complete all eligibility applications verifying they are signed off on by both the applicant and a representative of JFS.

2 CFR 200.403(g) states except where otherwise authorized by statute, costs must meet certain general criteria in order to be allowed under Federal awards which includes being adequately documented. 2 CFR 200.405(a) states, in part, that 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 relative benefits received. OAC 5101:12-1-80.3(C)(1)(a) states, in part, that the contractor shall record the contractor's actual monthly costs on the JFS 07034 "Governmental Contractor Monthly Expense Report" to identify the justified unit rate. OAC 5101:12-1-80.3(C)(2)(a) states, in part, that the CSEA is responsible for paying the actual expenses as determined by the process described in paragraphs (C)(1)(a) to (C)(1)(f) of this rule. The County Department of Job and Family Service /Child Support Enforcement Division (CDJFS/CSEA) (the agency) entered into an agreement with the Trumbull County Clerk of Courts for the provision of the Title IV-D clerking services for the calendar year 2019 with a unit of service noted as a filing of a CSEA initiated document. The Governmental Contractor Monthly Expense Report (JFS 07034) from the provider included both payroll and non-payroll related costs. The following issues were found in the April and September 2019 invoices: ? Payroll costs of the Clerk of Courts employees were allocated based on estimates of time spent by each employee and no supporting documentation is received to indicate allocations were based on actual activities in service month. Therefore, these costs are not considered actual costs. ? Travel and training costs, supply costs, and miscellaneous costs were allocated based on unsupported payroll allocations noted above. As such, these are not considered actual costs. ? The Total Operating Units Produced was calculated as only the total number of cases, not the total number of filings for those cases. Failure to obtain adequate documentation to verify that expenses are allocated based on supported actual activities or supported percentages, could result in the agency paying the provider an incorrect amount. Failure to ensure the total operating units is based on the appropriate contracted unit provided to any purchaser, could result in an incorrect justified unit rate, and thus, and incorrect amount being paid to the provider. As a result, the agency may receive federal IV-D reimbursement in excess of the benefits received. The total allocations to the Trumbull Clerk of Courts, in the amount of $35,264, were based on estimates of time spent by each employee developed by Clerk of Courts. The supporting documentation did not indicate allocations utilized were based on actual activities in the service month (staff counts or time studies). While using an estimate may be adequate, the documentation must meet the requirements of 2 CFR 200.405(a). Since these are federally reimbursable costs, there is potential that JFS received federal IV-D reimbursement in excess of benefits received. As a result, we find $35,264 to be a questioned cost. The County should implement procedures to obtain and review supporting documentation for all costs and all allocation percentages utilized on the Governmental Contractor Monthly Expense Report (JFS 07034). The review should ensure allocation percentages used are appropriate, based on supported documentation, and not based on estimates. Documentation of each allocation methodology used should be maintained to support the percentages utilized. Additionally, the agency should implement procedures to ensure the total units produced is accurate and based on the contracted unit rate and not different unit of service. The agency should also complete a reconciliation of the amounts paid under the aforementioned contract, and any similar, to amounts allowable based on supported allocations based on the actual activities/circumstances in the month and the appropriate units based on the contracted unit of service. If documentation cannot be provided, the agency should seek reimbursement of these costs from the provider.

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