Audit 8489

2 C.F.R. 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. 2 C.F.R. § 180.220(b) provides that a contract for goods or services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction that is covered under § 180.210, and the amount of the contract is expected to equal or exceed $25,000. 2 C.F.R. § 376.220 states that in addition to the contracts covered under 2 C.F.R. § 180.220(b), this part also applies to all lower tiers of subcontracts under covered nonprocurement transactions, as permitted under the OMB guidance at 2 C.F.R. § 180.220(c). 2 C.F.R. § 180.300 provides that when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) checking SAM exclusions; or (b) collecting a certification from that person; or (c) 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 procurement for the State and Local Fiscal Recovery Fund, Assistance Listing # 21.027, we noted one instance in which there had been a payment 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 verification was not completed for the only covered transaction in the State and Local Fiscal Recovery Fund 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.

45 C.F.R. § 75.305(b) states for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Ohio Admin. Code 5101:9-7-03(B)(1) states the County Departments of Job and Family Services shall have cash management procedures in place to ensure the time elapsing between the receipt of funds and the disbursement of funds does not exceed a ten-day average for all federal funding. The days equivalent cash-on-hand for Tuscarawas County Job and Family Services averaged to 80 days per review of the CR 502 reports in 2022. Therefore, the cash on hand exceeded the allowable number of days by 70 for the year. The Tuscarawas County Job and Family Services should implement internal control procedures that would limit cash draws to amounts only immediately needed. Procedures should include, but are not limited to, a review of expenditures and requesting limited drawdowns that would ensure that cash on hand is expended within the ten-day requirement.

45 C.F.R. § 75.305(b) states for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Ohio Admin. Code 5101:9-7-03(B)(1) states the County Departments of Job and Family Services shall have cash management procedures in place to ensure the time elapsing between the receipt of funds and the disbursement of funds does not exceed a ten-day average for all federal funding. The days equivalent cash-on-hand for Tuscarawas County Job and Family Services averaged to 80 days per review of the CR 502 reports in 2022. Therefore, the cash on hand exceeded the allowable number of days by 70 for the year. The Tuscarawas County Job and Family Services should implement internal control procedures that would limit cash draws to amounts only immediately needed. Procedures should include, but are not limited to, a review of expenditures and requesting limited drawdowns that would ensure that cash on hand is expended within the ten-day requirement.

2 C.F.R. 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. 2 C.F.R. § 180.220(b) provides that a contract for goods or services is a covered transaction if the contract is awarded by a participant in a nonprocurement transaction that is covered under § 180.210, and the amount of the contract is expected to equal or exceed $25,000. 2 C.F.R. § 376.220 states that in addition to the contracts covered under 2 C.F.R. § 180.220(b), this part also applies to all lower tiers of subcontracts under covered nonprocurement transactions, as permitted under the OMB guidance at 2 C.F.R. § 180.220(c). 2 C.F.R. § 180.300 provides that when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) checking SAM exclusions; or (b) collecting a certification from that person; or (c) 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 procurement for the State and Local Fiscal Recovery Fund, Assistance Listing # 21.027, we noted one instance in which there had been a payment 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 verification was not completed for the only covered transaction in the State and Local Fiscal Recovery Fund 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.

45 C.F.R. § 75.305(b) states for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Ohio Admin. Code 5101:9-7-03(B)(1) states the County Departments of Job and Family Services shall have cash management procedures in place to ensure the time elapsing between the receipt of funds and the disbursement of funds does not exceed a ten-day average for all federal funding. The days equivalent cash-on-hand for Tuscarawas County Job and Family Services averaged to 80 days per review of the CR 502 reports in 2022. Therefore, the cash on hand exceeded the allowable number of days by 70 for the year. The Tuscarawas County Job and Family Services should implement internal control procedures that would limit cash draws to amounts only immediately needed. Procedures should include, but are not limited to, a review of expenditures and requesting limited drawdowns that would ensure that cash on hand is expended within the ten-day requirement.

45 C.F.R. § 75.305(b) states for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Ohio Admin. Code 5101:9-7-03(B)(1) states the County Departments of Job and Family Services shall have cash management procedures in place to ensure the time elapsing between the receipt of funds and the disbursement of funds does not exceed a ten-day average for all federal funding. The days equivalent cash-on-hand for Tuscarawas County Job and Family Services averaged to 80 days per review of the CR 502 reports in 2022. Therefore, the cash on hand exceeded the allowable number of days by 70 for the year. The Tuscarawas County Job and Family Services should implement internal control procedures that would limit cash draws to amounts only immediately needed. Procedures should include, but are not limited to, a review of expenditures and requesting limited drawdowns that would ensure that cash on hand is expended within the ten-day requirement.