Finding Text
45 CFR 75.420(f) states that incentive compensation to employees based on cost reduction, or efficient performance, suggestion awards, safety awards, etc., is allowable to the extent that the overall compensation is determined to be reasonable and such costs are paid or accrued pursuant to an agreement entered into in good faith between the non-Federal entity and the employees before the services were rendered, or pursuant to an established plan followed by the non-Federal entity so consistently as to imply, in effect, an agreement to make such payment. This code section applies to the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program. OGAPP Manual 100.3, B2.4 Personnel Costs, states that even though costs of overtime/bonuses are chargeable to federal grants, they are only allowable to the extent that the costs comply with certain guidelines. For bonuses, they are limited to 3% of an employee's gross wages (not including fringes) or $1,500, whichever is less. The Ohio Department of Health (ODH) program administrator must approve all bonuses and enter a comment in GMIS in the project comments section. Due to a lack of internal controls, the District paid out bonuses in excess of the amounts allowable under OGAPP (3%,or $1,500) from MIECHV funds during 2024. The excess bonus amounts considered unallowable for the MIECHV program totaled $1,367. The unallowable bonuses paid are under the $25,000 federal threshold and therefore would not be considered as questioned costs for either program. The District did not receive approval from ODH for the bonuses paid out in 2024. The District should establish and implement internal controls to ensure all requirements from the federal and pass-through entities are followed to help ensure compliance and reduce the risk of misuse of funds.