The following accounting procedures are necessary for local accountability in the financing and cash management of federal and state funds.
The Ohio department of job and family services (ODJFS) notifies the local area fiscal agent at the beginning of the state fiscal year (SFY) of the amounts the local area is eligible to receive. The local area, through the area's designated fiscal agent, makes the WIA funding available to its subrecipients. Each local area and subrecipients of the local areas are required to establish and maintain a workforce development fund to be used for all deposits and disbursements of funds for all WIA activities.
(1) Available funds are limited by state appropriation and federal award.
(2) All payments are issued via electronic funds transfer (EFT) .
(3) All expenditures and reimbursements for activities funded under WIA are required to be made from the workforce development fund.
(B) Cash management.
When a local area is funded on a reimbursement basis, program costs are paid with local funds before reimbursement is requested. When funds are drawn in advance, the local area shall follow procedures to minimize the time elapsing between the transfer of funds from the state and local disbursement. Disbursements to a local area administering federal programs shall cover allowable expenditures consistent with federal and state regulations.
(1) A local area may submit requests for cash draws weekly. Requests are processed by ODJFS within six working days. In accordance with the Cash Management Improvement Act and Title 29 C.F.R. part 97, section 20, cash drawn in advance must be limited to the minimum amount needed for actual, immediate requirements. The local area 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 grants. The local area shall monitor the cash management practices of the workforce development agencies to ensure they conform to the same standards.
(2) Cash drawn shall be traceable to a level of program expenditures adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes, rules, and regulations. The accounting systems of the local area shall support internal controls necessary to insure the reporting of activity affiliated with federal grants and state funds remain separated on a grant, program, or project basis.
(C) Quarterly cash on hand calculation.
(1) At the end of each quarter, ODJFS will calculate each local area's average days' cash on hand for all federal funding based on expenditures and cash draws for the WIA data subset as they appear on the county finance information (CFIS) over/under report.
(2) The average days' cash on hand will be calculated on an individual grant basis as follows:
(a) At the end of each quarter, ODJFS will calculate excess cash on hand by deducting the total 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) ODJFS will then calculate the average expenditures by dividing the total expenditures by the number of calendar days the funding has been available; and
(c) Finally, ODJFS will calculate the average days' cash on hand by dividing the excess cash on hand from the amount calculated in paragraph (C)(2)(a) of this rule by the average daily expenditures calculated in paragraph (C)(2)(b) of this rule.
(3) ODJFS will forward the results of the average days' cash on hand calculation to the local area for review.
(a) If an event, beyond the reasonable control of the local area, results in noncompliance with the cash management requirements, the local area shall document the event and upon request of ODJFS provide documentation to the ODJFS office of fiscal and monitoring services (OFMS).
(b) If circumstances resulting in the noncompliance are caused by internal control deficiencies or operational processes, the local area shall document the steps implemented to avoid a reoccurrence and upon request provide the documentation to the ODJFS OFMS.
(c) ODJFS may take additional action to ensure the cash management practices of the local area are in compliance with paragraph (B)(1) of this rule.
(D) Quarterly interest calculation and reconciliation.
An interest liability accrues if federal funds are received prior to the day the funds are paid. A local area shall calculate and report earned interest quarterly. ODJFS will complete the quarterly interest reconciliation using the "State Treasury Asset Reserve of Ohio" (STAR Ohio) rate and send a preliminary spreadsheet to the local area.
(1) Interest on the cumulative amount of excess cash on hand shall be compounded daily and calculated by the local area using either the average monthly interest rate earned or the STAR Ohio interest rate published on the Ohio treasurer of state website at http://www.ohiotreasurer.org.
(2) As part of the quarterly interest reconciliation, the local area may take into consideration the months in which the local area used local funds for program purposes other than for local match and, therefore, operated on a reimbursement basis, provided the local area requests funds timely as set forth in this rule. When the monthly interest liability as calculated in paragraph (D)(1) of this rule is a negative number and when the local area has documentation identifying the funds used as local funds, the resulting negative number may be used to offset any interest liability from other months during the quarter. The format of the quarterly reconciliation will include, at a minimum, the following:
(a) The monthly interest liability owed by the local area or the monthly offsetting interest liability based upon the local area using local funds for program purposes for each applicable federal program allocation; and
(b) The total net interest liability owed by the local area or the total net offsetting interest liability based upon the local area using local funds for program purposes for each applicable federal program allocation for the quarter.
(3) The total net interest liability owed by the local area or the total net offsetting interest liability based upon the local area using local funds for program purposes for each applicable federal program allocation for the federal fiscal year (FFY). In accordance with 29 C.F.R. 97.21(i), a local area, as subgrantee, may keep interest amounts up to one hundred dollars per year for administrative expenses.
(4) For each applicable federal program allocation with a total net offsetting interest liability (a negative number calculated in the quarterly reconciliation), no adjustment to program income will be necessary. ODJFS shall not be liable to the local area for any interest liability based upon the local area using local funds for program purposes.
(E) Local area accruals and liquidations of accruals.
As expenditures are incurred, they become accrued expenses and shall be reported as accruals. At the time the accrual is liquidated (disbursed), the local area may draw down funds and shall report the disbursement of the accrual as expenditure for that quarter. All accruals shall be liquidated by the end of the period of availability
(F) The local area shall maintain the completed quarterly interest reconciliation documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. This documentation may be subject to inspection, monitoring, and audit by ODJFS and the Ohio auditor of state.