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 § 200.320(a)(2)(i) defines simplified acquisitions as purchases where the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. The County did not have the proper internal controls in place to obtain sufficient quotations from qualified sources. For the State and Local Fiscal Recovery Funds (SLFRF) direct grant, one out of the two projects tested, which was for digitalization of Clerk of Courts' records in the amount of $20,804, exceeded the County's micro-purchase threshold of $10,000, but the County did not obtain and document price or rate quotations from an adequate number of qualified sources. For the State and Local Fiscal Recovery Funds passed through Ohio Department of Development, there was only one project subject to simplified acquisition testing, which was for professional engineering in the amount of $42,600. However, the County could not provide evidence that price or rate quotations were received from adequate number of qualified sources. Additionally, 31 CFR § 19.305 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 31 CFR § 19.120. 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 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 31 CFR § 19.220. All nonprocurement transactions as defined in 31 CFR § 19.970 (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless exempt by 31 CFR § 19.215. 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/content/home); collecting a certification from the entity, or adding a clause or condition to the covered transactions with that entity. The County did not have the proper internal controls in place to verify that all entities, with whom the County had entered into covered transaction, had not been suspended or debarred. Although all of the vendors tested were not suspended or debarred, the County did not have any evidence supporting that it performed a search before entering into a contract, collected certifications from the vendors, or added a clause or condition to covered transactions with the vendors to verify this information to verify this information. Failure to comply with federal procurement and suspension and debarment guidelines could result in improper spending of federal monies. The County should ensure that price or rate quotations are sought out from an adequate number of sources for procurement purchases defined as Simplified Acquisitions. In addition, the County should also develop and implement controls to verify that contractors who are taking part of a federally funded project are not suspended or debarred before entering into a contract with them.
2 C.F.R. Subpart E § 200.302(b)(2) requires that entities must present accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. 31 CFR § 35.4(c) further states in part that during the period of performance, recipients shall provide periodic reports providing detailed accounting of the uses of funds. The State and Local Fiscal Recovery Funds (SLFRF) annual Project and Expenditure Report requires quantifiable objective criteria containing reported obligations and expenditures for the following Key Line Items: a. Current period obligation b. Cumulative obligation c. Current period expenditure d. Cumulative expenditure The Current Period Expenditures for the Health Department / Records Center / Coroner / GIG Loan on the County's submitted SLFRF Project and Expenditure Report for the grant period ending December 31, 2025 were overstated by $1,059,739. This was due to expenditures paid for using interest revenue were improperly reported as SLFRF grant expenditures in quarter 4. All other amounts were properly reported. Failure to complete and submit accurate reports for required data elements could result in the loss or reduction of future grant funding or penalties imposed by the federal agency. The County should establish and implement procedures to review reports submitted to the federal grantor before submission to ensure that all amounts are reported correctly.
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. 2 CFR § 300.1 gives regulatory effect to the Department of Health and Human Services for 2 CFR § 200.405 (a) which 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. Ohio Admin. Code § 5101:9-1-04(C)(3) defines “Social service (SS) administrative costs” as costs that benefit one or more SS programs. The SS cost pool consists of costs relating to the administration of various SS programs. The Belmont County Job and Family Services did not have the proper internal controls in place to prevent unallowable activities and costs. During our testing of indirect payroll and non-payroll expenditures, we noted that the Belmont County Family and Children First Council Coordinator’s salary and benefits was improperly charged to the social services cost pool along with travel and meal reimbursements. This error resulted in a questioned cost of $75,456 against the Temporary Assistance for Needy Families (TANF) Grant. Failure to charge these costs to the appropriate cost pool resulted in the allocation of costs to a non-benefiting program, which subsequently resulted in the improper Federal reimbursement to this non-benefitting program. The Belmont County Job and Family Services should implement procedures to evaluate expenditures to determine which programs they benefit in order to charge the associated costs to the appropriate indirect cost pool or direct program. We further recommend the Belmont County Job and Family Services complete the necessary adjustment in CFIS Web to adjust the aforementioned costs, and any similar ones, to the benefitting program.
2 CFR § 300.1 gives regulatory effect to the Department of Health and Human Services for 2 CFR § 200.430 which states, in part, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per the Belmont County Department of Job and Family Services, employees complete their timesheet which are turned into their supervisor. From the timesheets, the supervisors prepare a ‘Hours Reported for Pay Ending’ form for each pay period end date which shows the employee name, hours worked, hours at time and One-half, on-call pay, etc. The Fiscal Administrator will ‘checkmark’ the employee hours on the ‘Hours Reported for Pay Period Ending’ form to verify that the amount is correct and added to the payroll transmittal report. Evidence of this approval on the ‘Hours Reported for Pay Ending’ are necessary to acknowledge that the expenditures are allowable, per specific grant regulations, and are compliant with Uniform Guidance requirements contained in Subpart E of 2 CFR part 200. Due to the lack of the control procedures over the review of payroll reports, two out of sixty (3%) employees tested did not have overtime hours from their time sheets reported on the ‘Hours Reported for Pay Period Ending’ form, which resulted in an underpayment. This weakness could result in unallowable expenditures (employees) being charged to programs administered by the County Department of Job and Family Services. Formal written procedures should be developed, implemented, and consistently applied to the approval of federal grant expenditures prior to payment. Procedures should include how approvals by management or administrators are documented for each expenditure and the approvals should be done by personnel knowledgeable about the federal program and, for payroll expenditures, the actual work performed by employees. Implementing a formal control process with help ensure only allowable expenditures are made using federal grant funds and will ensure that employees are paid properly.