Audit 414858

29 USC § 3164(c)(4) states, in part, not less than 20 percent of [Youth Activity] funds allocated to the local area shall be used to provide in-school youth and out-of-school youth with [paid and unpaid work experiences that have a component of academic and occupational education, as described in 29 USC § 3164(c)(2)(C)]. 20 CFR § 681.590 states, in part, local area administrative costs are not subject to the 20 percent minimum work experience expenditure requirement. The County did not have procedures in place to monitor and ensure that federal earmarking requirements were being met. The County used 15.93 percent of the allocated Youth Activity funds, except for the local area expenditures for administration, to provide paid and unpaid work experiences. Failure to comply with USC earmark requirements for federal programs could result in complications with regard to receiving federal funding and legal issues potentially involving having to repay the funds used. The County should implement policies and procedures to monitor and track program expenditures against legally mandated earmark requirements through the course of the year to ensure that earmarking requirements are being met.

The Hamilton County Department of Job and Family Services (HCDJFS) established eligibility policies and procedures for the approval of participants in the Foster Care federal award. The policies and procedures include a requirement that each eligibility placement form is required to be reviewed and approved by program personnel and evidenced by signature on the eligibility placement form. Due to the lack of controls over the eligibility placement process, of the eligibility placement agreements tested for fiscal year 2025, eight of 40 (20%) were not signed by HCDJFS program personnel to indicate review of the placement agreement with the eligibility determination. Lack of controls in place by reviewing and signing placement forms could result in benefits provided to ineligible participants. HCJFS program personnel should review all eligibility placement forms and approve such forms by signature.

45 C.F.R. § 75.405(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. In order 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. 2 C.F.R. § 300.106 gives regulatory effect to the US Department of Health and Human Services and 2 C.F.R. § 2900.4 gives regulatory effect to the US Department of Labor for 2 C.F.R. § 200.405(a) which state, in part, a cost is allocable to a Federal award or other cost objective if the cost is assignable to that Federal award or other cost objective in accordance with the relative benefits received. This standard is met if the cost benefits both the Federal award and other work of the recipient or subrecipient and can be distributed in proportions that may be approximated using reasonable methods. The Ohio Department of Job and Family Services (ODJFS) and Ohio Department of Children and Youth (ODCY) have implemented a cost allocation plan approved by the US Department of Health and Human Services and communicated time sampling requirements for said plan to county agencies. This is provided for within 45 C.F.R. § 75.430, which states, in part, that random moment sampling (RMS) may be utilized for allocating salaries and wages to Federal awards. Ohio Admin. Code 5101:9-7-20 outlines the procedures to be utilized for random moment sampling time studies designed to measure activity regarding various Federal programs passed through the ODJFS and ODCY. Ohio Admin. Code 5101:9-7-20(E)(3) states the employee receiving an observation moment will have forty-eight hours to respond, not including weekends or holidays. Ohio Admin. Code 5101:9-7-20(F)(3) states, in part, the RMS coordinator shall review and approve by accepting all observation moment responses within seventy-two hours. Due to the lack of controls over the random moment sampling process, the Hamilton County Department of Job and Family Services (HCJFS) did not ensure an RMS Coordinator review and approval of an observation moment was performed within 72 hours for three of 60 (10%) RMS time studies observations tested. Additionally, an employee did not respond to the RMS observation moment within 48 hours for one of the three exceptions (33%). These time studies are used to allocate expenditures across the federal programs for the county agency and failure to properly complete and approve these activities could cause incorrect charges to federal awards. The HCJFS should review its internal control policies and procedures over its RMS processes to ensure RMS activities by Coordinators and employees are performed timely.