Finding Text
45 C.F.R. part 75 subpart D, section 75.305(b) states for non-Federal entities other than states, payment 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) states that when a County Department of Job and Family Services (CDJFS) is funded on a reimbursement basis, program costs are paid by local funds before reimbursement is requested. When funds are drawn in advance, the CDJFS shall follow procedures to minimize the time elapsing between the transfer of funds from the state and local disbursement. Disbursements to a CDJFS administering federal programs shall cover allowable expenditures consistent with federal and state regulations.
(1) Requests for cash draws may be submitted weekly and are processed by the Ohio department of job and family services (ODJFS) in six working days. In accordance with 45 C.F.R. part 75 subpart D, section 75.305, cash drawn in advance must be limited to the minimum amount needed for actual, immediate requirements. The CDJFS 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.
(2) Cash drawn shall be traceable to program expenditures sufficient to establish such funds have not been used in violation of the restrictions and prohibitions of applicable rules and regulations. The accounting systems of the CDJFS shall support internal controls necessary to insure federal grants and state funds remain separated on a grant, program, or project basis.
Ohio Admin. Code § 5101:9-7-03(C) states (1) the county finance information system (CFIS) calculates the average number of days of cash on hand on an individual grant basis. This information is based on expenditures and cash draws reported in CFIS in accordance with rule 5101:9-7-29 of the Administrative Code and reflected in the CFIS over/under report. The average number of days of cash on hand is calculated as follows:
(a) The cash on hand amount is calculated by deducting the reported expenditures over the lifetime of the funding source, up to the budgeted amount from the total amount of cash draws over the lifetime of the funding source;
(b) The daily average expenditure amount is calculated by dividing the total reported expenditures by the number of calendar days the funding has been available; and (c) The average number of days of cash on hand is calculated by dividing the cash on hand from paragraph (C)(1)(a) of this rule by the average daily expenditures in paragraph (C)(1)(b) of this rule.
(2) At the end of each quarter, the CDJFS shall review the CFIS cash on hand report to ensure compliance with paragraph (B)(1) of this rule.
(a) If an event, beyond the reasonable control of the CDJFS, results in noncompliance with the cash management requirements, the CDJFS shall document the event.
(b) If circumstances resulting in the noncompliance are caused by internal control deficiencies or operational processes, the CDJFS shall document the steps implemented to avoid a reoccurrence.
(3) Continued non-compliance may result in ODJFS restricting the agency's draws to ensure the cash management practices of the CDJFS are in compliance with paragraph (B)(1) of this rule.
The Logan County Department of Job and Family Services had 1 of the 4 quarters during fiscal year 2023 where the average cash on hand exceeded ten days for the Social Services Block Grant funding. Due to lack of internal controls over cash management, the County had over 167 days of cash on hand.
The failure to comply with the cash management requirements per the federal C.F.R. and Ohio Administrative Code could result in the Ohio Department of Job and Family Services restricting the agency's draws to ensure the cash management practices are in compliance with the requirements or a loss of grant funding. The Logan County Department of Job and Family Services should review the policies and procedures in place for drawing down Federal grant monies to help ensure only cash needed for immediate use is requested. Furthermore, the drawdowns should be limited to cover transactions expected to be expended within ten days.