Finding 503003 (2023-001)

Material Weakness
Requirement
C
Questioned Costs
-
Year
2023
Accepted
2024-10-16
Audit: 324945
Organization: Logan County (OH)

AI Summary

  • Core Issue: Logan County CDJFS exceeded the allowed average cash on hand of ten days for Social Services Block Grant funding, reaching over 167 days due to poor cash management controls.
  • Impacted Requirements: Non-compliance with 45 C.F.R. part 75 and Ohio Admin. Code § 5101:9-7-03 could lead to restrictions on cash draws or loss of grant funding.
  • Recommended Follow-Up: Review and strengthen policies for cash draw requests to ensure only necessary funds for immediate use are requested, limiting drawdowns to cover expenditures within ten days.

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.

Categories

Cash Management

Other Findings in this Audit

  • 503002 2023-001
    Material Weakness
  • 503004 2023-002
    Material Weakness
  • 1079444 2023-001
    Material Weakness
  • 1079445 2023-001
    Material Weakness
  • 1079446 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.658 Foster Care Title IV-E $1.58M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $951,227
93.563 Child Support Services $758,823
93.667 Social Services Block Grant $433,932
93.778 Medical Assistance Program $348,732
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $309,154
93.558 Temporary Assistance for Needy Families $300,040
93.659 Adoption Assistance $269,395
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $194,793
14.239 Home Investment Partnerships Program $182,372
16.585 Treatment Court Discretionary Grant Program $139,705
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $124,621
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $81,373
93.556 Marylee Allen Promoting Safe and Stable Families Program $65,182
20.600 State and Community Highway Safety $56,391
97.042 Emergency Management Performance Grants $52,481
84.027 Special Education Grants to States $52,035
20.205 Highway Planning and Construction $50,000
16.575 Crime Victim Assistance $47,389
17.225 Unemployment Insurance $44,623
93.645 Stephanie Tubbs Jones Child Welfare Services Program $43,272
93.575 Child Care and Development Block Grant $42,029
17.259 Wioa Youth Activities $40,694
84.173 Special Education Preschool Grants $37,757
17.258 Wioa Adult Program $31,875
93.674 John H. Chafee Foster Care Program for Successful Transition to Adulthood $31,870
10.561 Covid-19 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $27,434
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $24,380
97.039 Hazard Mitigation Grant $15,750
17.207 Employment Service/wagner-Peyser Funded Activities $15,531
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $14,131
93.747 Covid-19 Elder Abuse Prevention Interventions Program $10,305
84.181 Special Education-Grants for Infants and Families $9,755
17.278 Wioa Dislocated Worker Formula Grants $5,523
17.245 Trade Adjustment Assistance $2,475
17.277 Wioa National Dislocated Worker Grants / Wia National Emergency Grants $585
16.828 Swift, Certain, and Fair Supervision Program: Applying the Principles Behind Project Hope $30