Chapter 5101:9-1 Performance Standards

5101:9-1-01 ODJFS performance standards.

[This rule designated an internal management rule. For a copy of this rule, contact the Ohio Legislative Service Commission.]

5101:9-1-02 County cost structures.

(A) The Ohio department of job and family services (ODJFS) allocates costs in accordance with the ODJFS federally approved cost allocation plan (CAP). This annual plan is submitted to the United States department of health and human services and defines the method used by ODJFS to distribute and report costs to the various job and family services programs Ohio administers. Costs are placed in one of the six cost categories in paragraph (B) of this rule based on the activity to which they relate. Costs of similar functions in like circumstances must be treated consistently in making this assignment. General cost principles based on 2 C.F.R. part 225 are found in rule 5101:9-1-15 of the Administrative Code.

(B) The following cost structures are contained in the ODJFS CAP and must be used by the county family services agency for state and federal reporting purposes. Each county agency shall consistently apply costs within at least one of the following six cost structures based on the activity performed:

(1) Income maintenance cost category includes direct income maintenance and income maintenance related costs. In a county department of job and family services (CDJFS) that does not have staff who work solely on Workforce Investment Act (WIA) activities, this cost category may also include WIA costs.

(2) Social services cost category includes direct social services and social services related costs. In a CDJFS that does not have staff who work solely on WIA activities, this cost category may also include WIA costs.

(3) Child support cost category includes direct child support costs and child support administrative costs.

(4) WIA cost category includes direct WIA and WIA related costs when staff work solely on WIA program activities.

(5) ODJFS acknowledged CDJFS function/program cost category includes direct or shared ODJFS acknowledged CDJFS function/program costs of programs assigned by the county board of county commissioners to be administered by the county agency .

(6) Shared cost category.

(C) The county agency shall determine all direct, administrative and shared costs within the categories outlined in paragraph (B) of this rule to specific programs and grants in accordance with this chapter.

Effective: 06/11/2012
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.04 , 5101.02
Prior Effective Dates: 7/28/96, 1/31/04, 1/30/09

5101:9-1-03 Direct costs.

(A) In accordance with the Ohio department of job and family services (ODJFS) federally approved cost allocation plan, "direct costs" are those costs that benefit and can be identified specifically to a particular program. Expenditures reported as direct costs are chargeable solely to the applicable state or federal programs in accordance with benefits received.

(B) "Direct income maintenance (IM) costs" are costs for contracts or purchased services that benefit a particular IM program including temporary assistance to needy families (TANF), medicaid, food assistance (FA), food assistance employment and training (FAET), healthchek, income maintenance (IM) case management, at risk pregnancy case management transportation, and workforce development and can be directly allocated to activities associated with those specific programs. Direct IM costs also include costs of equipment that have received prior federal approval to be direct charged to particular IM programs.

(C) "Direct social services (SS) costs" are costs for contracts or purchased services that benefit and can be identified with a particular SS program including TANF, workforce development, refugee resettlement, childcare, enhanced medicaid transportation, or specific components/activities of the Title XX program; and can be directly allocated to activities associated with those specific programs. Direct SS costs also include costs of equipment that have received prior federal approval to be direct charged to a particular SS program or Title XX activity.

(D) "Direct child support costs (CS)" are costs of contracts or purchased services that benefit and can be identified with and directly charged to a specific activity within a specific child support program area and can be directly allocated to activities associated with those specific programs. Direct CS costs also include costs of equipment that have received prior federal approval to be direct charged to a particular CS program.

(E) "Direct workforce development (WFD) costs" are costs of contracts and purchased services that benefit and can be identified with a particular Workforce Investment Act (WIA) program and can be directly allocated to activities associated with those specific programs. Direct WFD costs are also costs of equipment that have received prior federal approval to be direct charged to a particular WIA program.

(F) "Direct child welfare (CW) costs" are costs of contracts, purchased services and maintenance costs that can be identified with a specific child welfare program including Title IV-B, state child protective allocation (SCPA), independent living (IL), TANF, post adoption assistance, Title XX related to children, and post adoption special service subsidies (PASSS).

(G) "Direct foster care and adoption assistance costs" are defined as contractually purchased services excluded from the SS administrative cost pool. These costs are for services incurred solely for allowable IV-E activities.

(H) "Direct ODJFS acknowledged county department of job and family services (CDJFS) function/program costs" are administrative or operating costs related to a specific ODJFS acknowledged CDJFS function/program administered by other state or local agencies but completed by staff in a public assistance agency. These direct ODJFS acknowledged function/program costs are considered non-reimbursable for ODJFS cost purposes including women, infants and children program as authorized by the Ohio department of health (ODH), county operated nursing facility, local area agency for aging, and local emergency assistance (AE) programs. A direct ODJFS acknowledged CDJFS function/program cost is the cost of salaries of direct service employees that are dedicated to a specific ODJFS acknowledged CDJFS function/program administered by another agency.

Replaces: 5101:9-1-03

Effective: 12/05/2013
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.04 , 5101.02
Prior Effective Dates: 8/24/81, 7/9/82, 1/1/86 (Emer.), 4/1/86, 1/10/87, 8/6/87, 4/21/88 (Emer.), 7/1/88, 7/25/88, 1/7/89, 7/8/89, 12/30/89, 7/28/96, 12/4/03, 5/15/08

5101:9-1-04 Administrative costs.

(A) Administrative/operational costs are the costs incurred in the effective and efficient management of a federal grants program.

(1) Administrative/operational costs are incurred for a common purpose benefiting more than one program.

(2) Administrative/operational costs do not include costs that can be assigned to a specific program; e.g., TANF administration, Workforce Investment Act (WIA) administration.

(3) The general principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local government agencies, found in 2 C.F.R. part 225 and described in rule 5101:9-1-15 of the Administrative Code, apply to the allowability for charging administrative/operational costs to these federal programs. Examples of administrative costs include, but are not limited to:

(a) Costs not associated with providing program services to individuals, including staff performing administration and coordination functions;

(b) Preparation of program plans and budgets; and

(c) Costs for goods and services required for administration, including costs for supplies, equipment, travel, postage, utilities, office space rental, and maintenance, provided such costs are not classified as administrative costs for providing program services.

(B) Shared administrative costs.

(1) Shared administrative costs are incurred for a common purpose benefiting more than one major function and are not readily assignable to specific programs or cost pools.

(2) In a county department of job and family services (CDJFS) or a combined agency, staff are identified with one or more programs and the information is imported to the Ohio department of job and family services (ODJFS) via the county finance information system (CFIS).

(C) Administrative costs associated with the major program area categories and ODJFS acknowledged CDJFS function or program cost category are grouped into cost pools. Cost pools are based on the program activity to which they relate. Expenditures reported through cost pools represent operating costs of the local agency. Administrative costs linked to direct casework activity are measured and allocated to various federal funding sources and programs through the random moment sample (RMS) time study.

(1) Income maintenance administrative costs.

(a) "Income maintenance (IM) administrative costs" are costs that benefit one or more IM programs. The IM cost pool consists of costs relating to the administration of various IM programs and may include work activities under prevention, retention, and contingency (PRC), Ohio works first (OWF), or food assistance employment and training (FAET). In a CDJFS, this cost category may also include WIA costs.

(i) This cost pool includes staff identified to IM through the shared costs distribution, the IM administrator, and staff performing IM functions when IM activities are performed under the direction of the IM administrator. This cost pool also includes staff performing both IM and WIA functions, as well as administrators who supervise the staff performing both IM and WIA functions.

(ii) The ODJFSacknowledged CDJFS function or program cost category includes direct or shared ODJFS acknowledged CDJFS functions or program costs for IM programs assigned by the board of county commissioners to be administered by the county agency.

(b) The local agency shall report IM administrative costs on the JFS 02827 "Public Assistance (PA) Quarterly Financial Statement" in accordance with rule 5101:9-7-29 of the Administrative Code and allocated by the process described in paragraphs (C)(1)(b)(i) to (C)(1)(b)(iii) of this rule.

(i) In a CDJFS or a combined agency, staff are identified with one or more programs and the information is imported to ODJFS via the quarterly report of full time equivalent (FTE) positions in CFIS as IM combined.

(ii) Administrative costs associated with the IM program area are placed in the IM cost pool along with the IM portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code. Administrative costs associated with the workforce program area may be placed in the IM cost pool along with the workforce portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code.

(iii) Administrative costs are distributed based on percentages derived from the results of the RMS in accordance with rule 5101:9-7-20 of the Administrative Code.

(2) Social service administrative costs.

(a) "Social service (SS) administrative costs" are costs that benefit one or more SS programs. The SS cost pool consists of costs relating to the administration of various SS programs, including work activities under PRC, OWF, FSET, and specific IM or WIA programs, if these programs are performed by SS staff.

(i) This cost pool includes staff identified to SS through the shared costs distribution, the SS administrator, and staff performing SS functions when SS activities are performed under the direction of the SS administrator. This cost pool also includes staff performing both SS and WIA functions, as well as administrators who supervise the staff performing both SS and WIA functions.

(ii) The ODJFS acknowledged CDJFS function or program cost category includes direct or shared ODJFS acknowledged CDJFS function or program costs for programs assigned by the board of county commissioners to be administered by the county agency.

(b) The local agency shall report SS administrative costs on the JFS 02827 in accordance with rule 5101:9-7-29 of the Administrative Code and allocated by the process described in paragraphs (C)(2)(b)(i) to (C)(2)(b)(iii) of this rule.

(i) In a CDJFS or a combined agency, staff are identified with one or more programs and reported as direct or apportioned direct SS and the information imported to ODJFS via the quarterly report of FTE positions in CFIS.

(ii) Administrative costs associated with the SS program area are placed in the SS cost pool along with the SS portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code. Administrative costs associated with the workforce program area may be placed in the SS cost pool along with the workforce portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code.

(iii) Administrative costs are distributed based on percentages derived from the results of the RMS in accordance with rule 5101:9-7-20 of the Administrative Code.

(3) Workforce administrative costs.

(a) "Workforce administrative costs" are costs that directly benefit one or more WIA programs. These costs include staff identified to workforce through the shared costs distribution; the workforce administrator, if the administrator only supervises staff who solely perform workforce activities, and staff performing workforce functions, if the staff performs solely workforce activities.

(b) The local agency shall report workforce administrative costs on the JFS 02827 in accordance with rule 5101:9-7-29 of the Administrative Code and allocated by the process described in paragraphs (C)(3)(b)(i) to (C)(3)(b)(iii) of this rule.

(i) In a CDJFS or a combined agency, workforce staff are identified with one or more programs by the quarterly report of FTE positions and the information imported to ODJFS via the quarterly report of FTE positions in CFIS.

(ii) In a CDJFS without staff who work solely on WIA activities, administrative costs associated with the workforce program area are placed in the IM or SS cost pool along with the workforce portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code. Administrative costs are distributed based on percentages derived from the income maintenance random moment sample (IMRMS) or social service random moment sample (SSRMS) results in accordance with rule 5101:9-7-20 of the Administrative Code.

(iii) In a CDJFS with staff who work solely on WIA activities, administrative costs associated with the workforce program areas and the staff dedicated to the WIA programs are placed in the WIA cost pool along with the workforce portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code. Administrative costs are distributed based on percentages derived from the workforce random moment sample (WFRMS) results in accordance with rule 5101:9-7-20 of the Administrative Code. Any staff who work on both IM and WIA activities, as well as the administrators who supervise those staff, are placed in the IM or SS cost pool.

(4) Child support administrative costs.

(a) "Child support (CS) administrative costs" are all CS expenditures with the exception of direct Title IV-D or non-IV-D costs, shared costs, and countywide central service plan payments. The CS cost pool consists of costs relating to the administration of the CS program.

(i) This cost pool includes salaries, benefit related compensation, and operation costs of all employees assigned to CS functions, as well as administrative contracts related to various CS program functions.

(ii) Administrative costs included in this cost pool are for administrative activities related to location of absent parents and putative fathers; paternity establishment; support order establishment, modifications, and enforcement; and distribution and disbursement of support collections.

(b) The local agency shall report CS administrative costs on the JFS 02750 "Child Support Enforcement Agency (CSEA) Quarterly Financial Statement" in accordance with rules 5101:9-7-29 and 5101:9-6-83 of the Administrative Code and allocated by the process described in paragraphs (C)(4)(b)(i) to (C)(4)(b)(iii) of this rule.

(i) In combined agencies, CS staff are identified with one or more programs and the information is imported to ODJFS via the quarterly report of FTE positions in CFIS as CS.

(ii) Administrative costs associated with the CS program area are placed in the CS cost pool along with the CS portion of shared costs in accordance with rule 5101:9-1-05 of the Administrative Code.

(iii) Administrative costs are distributed based on percentages derived from the results of the RMS in accordance with rule 5101:9-7-23 of the Administrative Code.

(D) In a CDJFS, all administrative costs in the SS, IM, or WIA cost pools, including ODJFS acknowledged CDJFS function or program expenditures, are made from the public assistance (PA) fund. If a separate fund exists for an ODJFS acknowledged CDJFS function or program, costs identified to the ODJFS acknowledged function or program must be reimbursed to the PA fund from the separate fund. The amount to be reimbursed to the PA fund is dependent upon the RMS and the amount identified on the operating expenditure reports.

(E) Single- or multi-purpose contracts for administrative services may be included in the IM cost pool, SS cost pool, CS cost pool, WIA cost pool or the shared cost pool, if the costs of the contract are not assignable to a particular cost objective in accordance with relative benefits received. Examples of administrative contracts that may be appropriately charged to a shared cost pool include, but are not limited to, building maintenance, human resource services, or any service that indirectly benefits more than one of the major program areas. All single-purpose and multi-purpose contracts with service providers or for case management activities shall be charged directly to the benefiting program funding sources. They may not be included in cost pool expenditures, which are allocated based on time study results.

Effective: 06/11/2012
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.04 , 5101.02
Prior Effective Dates: 8/24/81, 6/20/82, 7/9/82, 1/17/83, 1/1/86 (Emer), 4/1/86, 1/10/87, 8/6/87, 4/21/88 (Emer), 7/1/88, 7/25/88, 1/7/89, 7/8/89, 12/30/89, 7/28/96, 6/15/98, 1/31/04, 1/23/09

5101:9-1-05 Allocation of shared costs.

(A) Shared costs are indirect costs incurred for a common purpose that benefit two or more major program areas or Ohio department of job and family services (ODJFS) acknowledged functions/programs and are not readily assignable, without effort disproportionate to the results achieved, to a specific program or specific program area cost pool. Costs designated as shared costs are placed in the shared cost pool.

(1) When employee activities benefit two or more major program areas, costs associated with that employee are reported in the shared cost pool. Examples of staff who are appropriately charged to the shared cost pool include the director, the director's immediate staff, and other staff who support the general administration of the agency, such as personnel, fiscal, security, or centralized purchasing, assuming the costs associated with those staff are not readily assignable to a specific program or program area cost pool. Staff categorized as shared do not participate in any ODJFS random moment sample (RMS) observations.

(2) Shared costs are identified in combined and stand alone county department of job and family services (CDJFS). Shared costs include local agency functions.

Administrative contract costs are included in the shared cost pool if they are not assignable to a particular program in accordance with relative benefits received. Examples of administrative contracts appropriately charged to a shared cost pool include, but are not limited to, building maintenance, human resource services, or any service that indirectly benefits more than one federal program operated by the local agency.

(B) Shared costs in the shared cost pool are allocated to the ODJFS cost categories in a two phase process:

(1) In the first phase, shared costs are allocated to individual program areas within the CDJFS, based on the average number of full-time equivalent (FTE) positions imported to ODJFS in the county finance information system (CFIS). The major program areas are income maintenance (IM), social services (SS), Workforce Investment Act (WIA), and/or child support (CS). Costs associated with WIA may be combined with IM or SS or may be considered a major program area if all workforce staff in a CDJFS work solely on workforce programs.

(2) In the second phase, shared costs are further distributed to various programs within each major program area.

(a) The IM portion of shared costs identified in phase one is added to the IM combined administrative costs to create an IM administrative cost pool. These costs are then distributed to the IM related programs based on percentages derived from the income maintenance random moment sample observations. In a CDJFS that does not have staff who work solely on WIA activities, the WIA portion of shared costs identified in phase one is added to the IM cost pool.

(b) Any SS portion of shared costs identified in phase one is added to the SS administrative costs to create a SS administrative cost pool. These costs are then distributed to the SS related programs based on percentages derived from the social services random moment sample observations. In a CDJFS that does not have staff who work solely on WIA activities, the WIA portion of shared costs identified in phase one is added to the SS cost pool.

(c) Any CS portion of shared costs identified in phase one is added to the CS administrative costs to create a CS administrative cost pool. Costs are distributed between Title IV-D and non-IV-D activities based on percentages derived from the quarterly results of the child support random moment sample observations. These costs are then distributed to the CS related programs based on percentages derived from the child support random moment sample observations.

(d) In a CDJFS with staff who work solely on WIA activities, the WIA portion of shared costs identified in phase one is added to the WIA administrative costs to create a WIA cost pool. These costs are then distributed to the WIA related programs based on percentages derived from the workforce random moment sample observations.

(C) ODJFS acknowledged CDJFS shared costs are paid from the public assistance (PA) fund. The individual CDJFS function/program funds shall reimburse the PA fund for the portion of the shared costs that is attributable to its major program areas, as identified through the process described in paragraph (B) of this rule. The transfer between funds shall be identified through the expenditure reporting process.

Effective: 06/11/2012
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.04 , 5101.02
Prior Effective Dates: 1/1/86 (Emer), 4/1/86, 4/2/86 (Emer), 7/1/86, 1/10/87, 8/6/87, 4/21/88 (Emer), 7/1/88, 7/25/88, 7/8/89, 7/28/96, 6/15/98, 1/31/04, 1/13/09

5101:9-1-10 Countywide central service costs.

(A) "Countywide central service costs" are allowable costs of services provided by a governmental unit on a centralized basis to its departments and agencies. Countywide central service costs include costs that are incurred by other county agencies such as the county auditor, county prosecutor, or county treasurer, for the benefit of the county family services agency, and the cost of other central services allocated to the county family services agency. Countywide central service costs fall into one of the two following categories:

(1) "Billed central services" means central services that are billed to benefitting agencies and/ or programs on an individual fee for service or similar basis.

(2) "Allocated central services" means central services that benefit agencies but are not billed to the agencies on a fee for service or similar basis.

(B) County governments claiming countywide central service costs under federal awards must develop a cost allocation plan that identifies, accumulates and allocates the countywide central service costs. County governments must address any central service cost that benefits all county government branches, whether treated as a billed charge to the county family services agency (CFSA) or as an allocated charge in the cost allocation plan. This plan, prepared by the board of county commissioners, is referred to as the countywide central service cost allocation plan. The county must submit the countywide central service cost allocation plan to the Ohio department of job and family services (ODJFS) on behalf of the CFSA claiming reimbursement no later than December thirty-first of the calendar year for which it is used as the basis of claim.

(C) CFSAs shall report countywide central service costs within the first quarter following the end of the state fiscal year to which they are assigned.

(D) CFSAs report countywide central service costs as shared or as income maintenance administrative, social services administrative (adult social services and/or child related social services), Workforce Investment Act (WIA), and child support administrative expenditures as identified in the plan and as applicable to the CFSA. CFSAs report countywide central service cost in accordance with rule 5101:9-7-29 of the Administrative Code. Service costs relating to disability medical assistance and disability financial assistance are reported separately.

Effective: 04/12/2012
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.04 , 329.05 , 5101.02
Prior Effective Dates: 8/24/81, 10/1/82, 7/2/84, 7/15/84, 1/1/86 (Emer), 4/1/86, 4/2/86 (Emer) 7/1/86, 12/15/86, 7/1/87 (Emer), 9/28/87, 6/2/89, 7/8/89, 2/1/98, 1/31/04, 1/30/09

5101:9-1-15 Cost principles.

[This rule designated an internal management rule]

(A) The expenditure of funds received by grantees of federal funds and their sub-recipients must follow cost principles established in 2 C.F.R. part 225 and be in accordance with state and local requirements. Where federal, state, or local requirements differ, the most restrictive requirement shall apply.

(B) The following terms relate to cost principles used in this rule:

(1) "Award" is a grant, cost reimbursement contract, and/or other agreement between the government unit and the federal government.

(2) "Cognizant agency" is the federal agency responsible for reviewing, negotiating and approving cost allocation plans or indirect cost proposals developed under 2 C.F.R. part 225 on behalf of all federal agencies.

(3) "Cost" is an amount as determined on a cash, accrual, or other basis acceptable to the federal awarding or cognizant agency. It does not include transfers to a general or similar fund.

(4) "Cost allocation plan" means a central service cost allocation plan, public assistance cost allocation plan, and indirect cost rate proposal.

(5) "Governmental unit" means the state, local, or federally recognized Indian tribal government, including any component thereof. Components of governmental units may function independent of the governmental unit in accordance with the term of the award.

(C) The application of cost principles is based on the premise that:

(1) State and local governmental units are responsible for the efficient and effective administration of federal awards through the application of sound management practices.

(2) The governmental units assume responsibility for administering federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the federal award.

(3) Each governmental unit has the primary responsibility for employing the form of organization and those management techniques that are necessary to assure proper and efficient administration of federal awards.

(D) Costs may be categorized as follows:

(1) Allowable costs. These are costs that have been identified by the state or federal government as approved costs in compliance with the 2 C.F.R. part 225. The county agency may be reimbursed for a portion or for all of these costs.

(2) Costs allowable with prior approval. All costs in this category are allowable only if they have been prior-approved by the Ohio department of job and family services (ODJFS) and/or the federal agency providing the funds. The county agency may be reimbursed for a portion or for all of these prior-approved costs.

(3) Unallowable costs. These are costs that are non-reimbursable. A cost is unallowable if it is either:

(a) Prohibited as allowable by law; or

(b) Not allocable to a state or federal program. In this case, a county agency may expend funds for a particular item or activity, but the expenditure must be paid entirely with local funds.

(E) Costs must be allowable, reasonable, and allocable.

(1) A cost is allowable for federal reimbursement only to the extent of benefits received by federal awards and its conformance with the general policies and principles stated in 2 C.F.R. part 225. To be allowable under federal awards, costs must meet the following general criteria:

(a) Be necessary and reasonable for proper and efficient administration of the federal award.

(b) Be allocable to federal awards under the provisions of 2 C.F.R. part 225.

(c) Be authorized or not prohibited under state or local laws or regulations.

(d) Conform to any limitations or exclusions set forth in 2 C.F.R. part 225, federal law, terms and conditions of the federal award, or other governing regulations to types or amounts of the cost items.

(e) Be consistent with policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the government unit.

(f) Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.

(g) Except as otherwise provided in 2 C.F.R. part 225, be determined in accordance with generally accepted accounting principles.

(h) Not be included as a cost or used to meet cost sharing or matching requirements of any other federal award in either the current or prior period, except as specifically provided by federal law or regulation.

(i) Be the net of all applicable credits.

(j) Be adequately documented.

(2) A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when governmental units or components are predominately federally funded. In determining reasonableness of a given cost, consideration shall be given to:

(a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the governmental unit or the performance of the federal award.

(b) The restraints or requirements are imposed by such factors as sound business practices; arms length bargaining; federal, state, and other laws or regulations; and terms and conditions of the federal award.

(c) Market prices for comparable goods or services.

(d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the governmental unit, its employees, the public at large, and the federal government.

(e) Significant deviations from the established practices of the governmental unit that may unjustifiably increase the federal award's cost.

(3) A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received.

(a) All activities that benefit from the governmental unit's indirect cost, including unallowable activities and services donated to the governmental unit by third parties, will receive an appropriate allocation of indirect costs.

(b) Any cost allocable to a particular federal award or cost objective under the principles provided for in 2 C.F.R. part 225 may not be charged to other federal awards to overcome fund deficiencies, to avoid restrictions imposed by law or terms of the federal awards, or for other reasons.

(c) All costs must be allocated in compliance with the cost structures and methodologies defined in the ODJFS cost allocation plan (CAP). The CAP describes the method used to distribute and report costs to the various job and family services and workforce development programs Ohio administers and is approved by the federal cognizant agency.

(F) The total cost of a federal award is composed of the allowable direct cost of the program plus its allocable portion of allowable indirect costs, less applicable credits. Applicable credits refer to receipts or expenditure type transactions which offset or reduce expense items.

Examples of such receipts or transactions are: purchase discounts, rebates, recoveries or indemnities on losses, and adjustments of overpayments or erroneous charges.

(G) Cost principles for selected items in 2 C.F.R. part 225 are applied in establishing the allowability or unallowability of certain costs. These principles apply whether a cost is treated as direct or indirect. The fact that a particular item of cost is not mentioned in 2 C.F.R. part 225 does not imply that it is either allowable or unallowable. Determination of allowability in each case should be based on the treatment or standards provided for similar or related items of cost.

(H) The following selected items of costs address where there is more restrictive policy based on Ohio law and/or where policy clarifications have been received:

(1) "Advertising and Public Relations" - The costs of promoting the approval of a tax levy is an unallowable advertising and public relations cost.

(2) "Automatic Data Processing (ADP)" - The cost of data processing services for grant programs is allowable. This allowability does not supersede the restrictions regarding reimbursement of ADP expenditures in support of a federally approved ODJFS statewide system; e.g. client registry information system-enhanced (CRIS-E). That is, data processing costs that duplicate any statewide system functions cannot be claimed for federal reimbursement and are therefore non-reimbursable costs. In addition, acquisitions that may affect the ODJFS network, regardless of the cost or financial responsibility, must be approved by ODJFS prior to purchase. Approval can be obtained through the technology and service support policy (TSSP) request process as detailed in rule 5101:9-9-17 of the Administrative Code.

(3) "Bonding" - Costs of premiums on bonds covering employees who handle grant funds are allowable. Bonds are required as an assurance of faithful performance of duties as set forth in sections 329.01 and 5153.13 of the Revised Code. Each county department of job and family services (CDJFS) director and public children services agency (PCSA) director must post a bond prior to assuming that position.

(4) "Self-Insurance Plans" - The cost of self-insurance is allowable if included in the countywide central services cost allocation plan. Only self-insurance plans that are actuarially based are reimbursable.

(5) "County Established Workers' Compensation Reserve Funds" - The U.S. department of health and human services deems as allowable county agency contribution to these county reserve funds for self-insurance plans for workers' compensation provided that all conditions of 2 C.F.R. part 225 are met in adhering to the proper and efficient administration of federal awards, including:

(a) Reserve funds are not used for purposes other than workers' compensation claims and administrative expenses;

(b) Reserve levels are actuarially determined;

(c) Reserve levels do not exceed allowable levels for:

(i) Claims runoff amounts; and

(ii) Costs that would have been incurred had the counties chosen the base rate plan or experience rating plan, or had the counties chosen to use the actual claims paid method for charging federal programs for workers' compensation;

(d) Earned interest remains in the reserve fund to help lower contribution rates;

(e) Charges are consistent with federal and nonfederal program regulations; and

(f) Treatment of charges is consistent, whether charged as direct or indirect costs.

(I) Determination of allowability of cost not specially addressed in this rule or 2 C.F.R. part 225 should be based on the treatment or standards provided for similar or related items of cost.

Replaces: 5101:9-1-15

Effective: 01/30/2009
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 309.11 , 329.01 , 329.04 , 5153.13
Prior Effective Dates: 8/24/81, 12/18/81, 7/9/82, 1/1/86 (Emer), 4/1/86, 4/2/86 (Emer), 7/1/86, 12/15/86, 1/10/87, 7/20/87 (Emer), 8/6/87, 10/16/87, 4/21/88 (Emer), 7/1/88, 1/7/89, 7/8/89, 12/30/89, 5/1/96, 7/28/96, 6/23/97, 12/1/97, 4/3/98, 8/1/98, 1/31/04

5101:9-1-16 County organization and fiscal administration.

(A) The Ohio department of job and family services (ODJFS) currently recognizes, for federally-approved cost allocation purposes and reimbursement, the following county agency organizational structures:

(1) County department of job and family services (CDJFS);

(2) Child support enforcement agency (CSEA);

(3) Public children services agency (PCSA);

(4) Workforce development agency (WDA); or

(5) Any combination of a CDJFS and one or more county organizational structures included in this paragraph; or

(6) A joint county CDJFS pursuant to rule 5101:9-1-16.1 of the Administrative Code.

(B) The board of county commissioners may, in accordance with sections 307.981 , 330.04 , and 329.40 of the Revised Code, designate a private or government entity to serve as a CDJFS, CSEA, PCSA, WDA, combined or joint county organizational structure. The various programs ODJFS administers are operated under any one of these county agency organizational structures based on the determination and resolution of the local board of county commissioners.

(C) The CDJFS has or may have the responsibility of administering the following programs and related activities. While ODJFS is required to assure that statewide mandated services are available in all eighty-eight counties, there may be local flexibility with respect to the Title XX and prevention, retention and contingency (PRC) plans filed by each county:

(1) Income maintenance (IM) programs and activities that include:

(a) Title XIX medicaid administration and related programs;

(b) Food assistance (FA) administration and employment training;

(c) Disability assistance (DA); and

(d) Other income support programs administered by ODJFS and governed by the department of health and human services (DHHS) and the United States department of agriculture (USDA).

(2) Family and adult social services (FASS) that include:

(a) Title XX social services block grant;

(b) Adult protective services (APS);

(c) Child care; and

(d) Other adult and family support programs administered by ODJFS.

(3) Temporary assistance for needy families (TANF) activities that include:

(a) Ohio works first (OWF) work activities;

(b) PRC;

(c) Training; and

(d) Other approved TANF allowable programs and activities.

(4) FA employment and training (FAET) activities related to job education and training opportunities for FA clients;

(5) CSEA programs and activities where the board of county commissioners has designated the CDJFS as the local agency assigned the child support program functions;

(6) PCSA programs and activities where the board of county commissioners has designated the CDJFS as the local agency assigned the children services program functions; and,

(7) Workforce Investment Act (WIA) programs and activities where the board of county commissioners has designated the CDJFS as the local agency assigned workforce development program functions.

(D) The CSEA has the responsibility of administering the programs and activities related to Title IV-D child support program, which includes paternity establishment, child and medical support establishment and enforcement, child, medical and spousal support payment collection. The CSEA is also responsible for non-IV-D related activities funded by other federal, state and local grants such as: Title XIX, as it relates to support enforcement; TANF Title IV-A activities; Title IV-E, as it relates to paternity establishment, support order establishment activities; and special enforcement/employment projects in conjunction with OWF work activities.

(E) The PCSA has the responsibility of administering children services activities for neglected, abused and dependent children. The PCSA is responsible for activities such as foster care and adoption assistance, group homes, child endangerment, independent living, Title IV-E foster care and adoption, Title IV-B federal child welfare subsidy, emergency services assistance, state child protective services, and Title XIX medicaid activities related to children in custody of the PCSA. Although the PCSA is not responsible for administration of the Title XX program, the PCSA may administer Title XX activities in accordance with the county's approved Title XX plan and through an agreement with the local CDJFS.

(F) The WDA has the responsibility of providing workforce development activities, as authorized by the Workforce Investment Act of 1998. The workforce development system is designed to meet the needs of employers, job seekers, and current workers in career advancement through increasing employment, job retention, earning, and occupational skill attainment.

(G) The following functions/programs are included in the state cost allocation plan as functions that may be supervised by the CDJFS. These acknowledged functions/programs may be added under the supervision of the CDJFS by the board of county commissioners. The board or CDJFS must notify ODJFS by resolution of intent preferably at the beginning of the quarter, but no less than thirty days prior to the transfer of the acknowledged function/program to the CDJFS. The notification of intent shall be submitted to the ODJFS fiscal supervisor. The fiscal supervisor must notify the ODJFS office of fiscal and monitoring services, and if applicable, the appropriate ODJFS program area.

(1) Workforce development agency as authorized by the Workforce Investment Act of 1998;

(2) Women, infants and children (WIC) program as authorized by the Ohio department of health;

(3) County operated nursing facility;

(4) Local area agency for aging as authorized by the Ohio department of aging. (This agency may include the passport program by being a passport provider.);

(5) Local emergency assistance (EA) program, authorized by the board of county commissioners, which primarily benefits recipients of ODJFS administered programs;

(6) County operated children's home; and

(7) County tuberculosis (TB) control department.

(H) The functions/programs listed in paragraph (G) of this rule may be placed under the supervision of the CDJFS director, income maintenance administrator, or social services administrator. These areas may not be supervised by the child support administrator or public children services administrator, if other than the social services administrator in combined agencies.

(I) The functions/programs listed in paragraph (G) of this rule are currently recognized under the supervision of the CDJFS for the purpose of reimbursement of allowable and reasonable costs. The costs of an ODJFS acknowledged function/program may appear in only one cost center. That is, in agreement with the administrative arrangement, costs may appear in only the income maintenance, social services, or ODJFS acknowledged function/program cost category.

(J) The board of county commissioners may add any job and family services function under the supervision of the CDJFS. To add a function/program other than those listed in paragraph (G) of this rule under the supervision of the CDJFS, the board of county commissioners must notify ODJFS by resolution of intent, three months prior to the transfer to the CDJFS. The notification of intent to transfer an additional function/program to the CDJFS shall be submitted to the ODJFS fiscal supervisor. The fiscal supervisor must notify the ODJFS office of fiscal and monitoring services, and, if applicable, the appropriate ODJFS program area.

Effective: 09/27/2012
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.01 , 329.02 , 329.04 , 329.40
Prior Effective Dates: 7/28/96, 6/15/98, 1/31/04, 6/15/06, 10/10/11

5101:9-1-16.1 Joint county department of job and family services.

(A) As outlined in section 329.40 of the Revised Code, a board of county commissioners (BOCC), by entering into a written agreement, may form a joint county department of job and family services (CDJFS) to perform the duties, provide the services, and operate the programs required under this chapter.

(B) Each board of county commissioners entering into the agreement shall provide written notice of their intent to form a joint CDJFS to the director of the Ohio department of job and family services (ODJFS).

(1) Notification shall include a copy of the BOCC resolution of intent to form a joint CDJFS.

(2) The notification shall be received by ODJFS no less than ninety days before the agreement's effective date.

(3) The agreement shall take effect not earlier than the first day of the calendar quarter following the ninety-day notice period.

(C) The boards of county commissioners of the counties forming the joint county department shall collectively constitute the board of directors of the joint CDJFS.

(D) On the effective date of the agreement, the board of directors shall take control of and manage the joint county department subject to this chapter and all other sections of the Revised Code governing the authority and responsibilities of a single board of county commissioners in the operation of a single county department of job and family services.

(E) All rules, regulations and policies that govern a CDJFS shall also be applicable to a joint CDJFS.

Effective: 09/27/2012
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.01 , 329.02 , 329.04 , 329.40

5101:9-1-22 Changing organizational structure.

(A) The board of county commissioners (BOCC) may initiate a change to the organizational structure of a county family services agency (CFSA). The new organizational structure must be in accordance with rule 5101:9-1-16 of the Administrative Code.

(1) The BOCC may merge or combine CFSAs and/or add the workforce development function; or

(2) The BOCC may separate a CFSA or workforce development function from a combined agency and create a stand alone agency.

(B) Notification of change.

The CFSA shall provide written notice of the intent to change the organizational structure to ODJFS. The notification of intent to change any organizational structure of the agency shall be submitted by the CFSA to the county's assigned ODJFS fiscal supervisor. The ODJFS fiscal supervisor will provide the notification to the ODJFS office of fiscal and monitoring services and, if applicable, the appropriate ODJFS program area.

(1) Notification shall include a copy of the BOCC resolution of intent to change the county agency's organizational structure.

(2) The notification shall be received by ODJFS no less than ninety days before the proposed organizational change date.

(3) The organizational change shall take effect no earlier than the first day of the quarter following the ninety-day notice period.

(C) Cost allocation.

Agencies shall develop an action plan outlining the changes necessary to remain in compliance with the ODJFS federally approved cost allocation plan (CAP). Final plans must be submitted by the CFSA to the county's assigned ODJFS fiscal supervisor no later than sixty days before the organizational change date. Plans shall include information and timelines regarding necessary changes to the random moment sample (RMS) time study and associated cost pools to ensure compliance with rules 5101:9-1-04 , 5101:9-1-05 , 5101:9-7-20 and 5101:9-7-23 of the Administrative Code and ODJFS CAP as follows:

(1) Combined agencies.

Newly combined agencies shall meet RMS compliance by establishing appropriate cost pools to ensure proper cost distribution. A combined family services agency (CFSA) is any combination of a county department of job and family services (CDJFS) and one or more county organizational structures listed below. All combined CFSAs have a minimum of three cost pools including shared, income maintenance (IM), and social services (SS) and are required to participate in the IMRMS and the SSRMS.

(a) CDJFS workers in a combined agency are required to participate in the IMRMS and the SSRMS.

(b) Workforce investment act (WIA) workers in a workforce development area (WDA) combining with a CDJFS are required to participate in the IMRMS or the SSRMS. If the agency has staff solely working on WIA activities, they may establish a workforce cost pool and participate in the workforce RMS.

(c) Child welfare workers in a public children services agency (PCSA) combining with a county department of job and family services (CDJFS) are required to participate in the SSRMS.

(d) Child support workers in a child support enforcement agency (CSEA) combining with a CDJFS are required to participate in the CSRMS.

(e) Shared costs are indirect costs incurred for a common purpose and benefit more than one cost pool. Combined agencies shall place shared costs in the shared cost pool and shall develop a system for the transfer process from the public children services agency (PCSA) fund or the child support enforcement agency (CSEA) administrative fund to the public assistance (PA) fund.

(2) Stand alone agencies.

Newly designated stand alone agencies shall meet RMS compliance and establish appropriate cost pools to ensure proper cost distribution.

(a) Stand alone public assistance agencies will have shared, IM, and SS cost pools and are required to participate in the SS RMS and IM RMS.

(b) Stand alone WDA shall reference rule 5101:9-31-17 of the Administrative Code to determine cost allocation requirements. If the stand alone WDA allocates costs by RMS, staff are required to participate in the workforce RMS.

(c) Stand alone PCSAs are required to participate in the child welfare RMS.

(d) Stand alone CSEAs are required to participate in the child support RMS.

(3) The RMS coordinator will create and submit rosters to ODJFS fifteen days prior to the beginning of the RMS reporting period which impacts the quarter of the organizational change. The RMS coordinator will also generate RMS samples for all affected subsets of the new organizational structure.

(4) Prior to the effective change date, CFSA will accumulate and calculate full-time equivalent (FTE) data and enter the FTE data via the county finance information system (CFIS) for the FTE period used to allocate costs for the quarter of the new organizational structure. Data from the first quarter of the new organizational structure will be utilized to distribute shared costs for both the initial and subsequent quarter.

(D) Reporting compliance.

At the end of the first quarter of the organizational change, the CFSA shall meet reporting requirements in accordance with rule 5101:9-7-29 of the Administrative Code.

(1) Newly merged agencies shall meet financial reporting requirements by certifying cash balances, reporting combined administrative costs and reconciling administrative costs in accordance with rule 5101:9-7-29 of the Administrative Code as follows:

(a) In a combined CDJFS/PCSA:

(i) The CDJFS shall certify the receipt of revenues and disbursements from the public assistance fund on the JFS 02827 "Public Assistance (PA) Quarterly Financial Statement."

(ii) The CDJFS/PCSA shall certify transactions related to social services administration costs and applicable shared costs in CFIS on the JFS 02827.

(iii) The PCSA shall certify social services costs, revenues and disbursements on the JFS 02820 "Children Services Quarterly Financial Statement."

(b) In a combined CDJFS/CSEA:

(i) The CDJFS shall certify the receipt of revenues and disbursements from the public assistance fund on the JFS 02827.

(ii) The CDJFS/CSEA shall certify transactions related to applicable shared costs on the JFS 02827.

(iii) The CSEA shall continue to certify child support administrative costs in CFIS and the receipt of revenues and disbursements on the JFS 02750 "Child Support Enforcement Agency (CSEA) Quarterly Financial Statement."

(2) Newly designated stand alone agencies shall also meet financial reporting requirements by certifying cash balances, reporting administrative costs and reconciling administrative costs in accordance with rule 5101:9-7-29 of the Administrative Code as follows:

(a) A stand alone CDJFS shall certify the receipt and disbursements from the public assistance fund on the JFS 02827.

(b) A stand alone PCSA shall certify SS administrative costs and applicable county wide indirect costs on the JFS 02820.

(c) A stand alone CSEA shall certify child support administrative costs and applicable county wide indirect costs on the JFS 02750.

(d) A stand alone workforce development agency shall certify workforce development fund revenues and disbursements and WIA area accruals and obligations on the JFS 01992 "Workforce Investment Act (WIA) Quarterly Financial Statement."

Replaces: 5101:9-1-22

Effective: 04/01/2014
Promulgated Under: 111.15
Statutory Authority: 307.981 , 5101.02
Rule Amplifies: 307.981 , 329.40 , 5101.02
Prior Effective Dates: 8/15/08

5101:9-1-23 Changing organizational structure from combined agencies to stand alone family services or workforce development agencies.

[This rule designated an internal management rule]

(A) A county board of commissioners (BOC) may determine to change the organizational structure of an agency by separating a family services or workforce development function from a combined agency and creating a stand alone agency. Prior to a change in the organizational structure, the newly designated stand alone agency shall meet all requirements of this rule. Additionally, the organizational structure of each separated agency must comply with rule 5101:9-1-16 of the Administrative Code.

(B) Prior to separating any public children services agency (PCSA), child support enforcement agency (CSEA) or workforce development agency functions from a county department of job and family services (CDJFS), the BOC shall notify ODJFS by resolution of intent ninety days before the proposed separation date. The notification of intent to change the organizational structure of the combined agency shall be submitted by the BOC to the county's assigned ODJFS fiscal supervisor. The ODJFS fiscal supervisor will notify the ODJFS office of fiscal services, and if applicable, the appropriate ODJFS program area.

(C) Affected agencies shall develop a plan outlining the changes necessary to remain in compliance with the ODJFS federally approved cost allocation plan (CAP). Final plans must be submitted to ODJFS no later than sixty days before the proposed separation date. Plans should include information and timelines regarding, but not limited to, necessary changes to the random moment sample (RMS) time study and associated cost pools to ensure compliance with the ODJFS CAP, as follows:

(1) Newly designated stand alone agencies shall meet RMS compliance, as described in paragraphs (C)(1)(a) to (C)(1)(c) of this rule, by establishing appropriate cost pools to ensure proper cost distribution as required by rule 5101:9-7-20 of the Administrative Code.

(a) Stand alone PCSAs are required to participate in the child welfare random moment sample (CWRMS) time study..

(b) Stand alone workforce investment areas (WIAs) with positions engaged directly in related program functions are required to participate in the workforce random moment sample (WFRMS) time study.

(c) Stand alone CSEAs are required to participate in the child support random moment sample (CSRMS).

(2) In accordance with the ODJFS CAP, the RMS coordinator shall submit rosters for all affected sub-sets of the newly appointed agency in anticipation of the proposed change for the sampling period that impacts the calendar quarter that includes the organizational change date.

(3) The full-time equivalent (FTE) data shall be accumulated and calculated for the calendar quarter immediately prior to the merger begin date. The RMS coordinator shall submit the JFS 04291 "Quarterly Report Of Stand Alone CSEA, PCSA, AND WIA Full Time Equivalents"

(04/2008) identifying the number of staff for each category of the first and second quarter as designated in the first quarter financials.

(D) Newly designated stand alone agencies shall also meet financial reporting requirements by properly reporting administrative costs and reconciling administrative costs as required by rule 5101:9-7-29 of the Administrative Code.

(1) Stand alone PCSAs must report social services administrative costs and applicable county wide indirect costs on the JFS 02820 "Children Services Monthly Financial Statement."

(2) Stand alone CSEAs shall report social services administrative costs and applicable county wide indirect costs on the JFS 02750 "Child Support Administrative Fund Monthly Financial Statement."

(3) Stand alone workforce development agencies shall use the JFS 01992 "Workforce Investment (WIA) Fund Certification Sheet" to identify expenditures eligible for reimbursement.

(E) Additional steps may be necessary to ensure newly created stand alone agencies are in compliance with the processes described in the CAP. Technical assistance from assigned ODJFS fiscal supervisors will be provided to individual agencies upon request.

Effective: 08/15/2008
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 5101.02 , 307.981

5101:9-1-88 Subrecipient annual risk assessment review and monitoring process.

(A) General purpose.

(1) County family services agencies (CFSA) and workforce development agencies (WDA), as subrecipients of the Ohio department of job and family services (ODJFS), are required to monitor their subrecipients. This rule establishes minimal standard monitoring requirements for CFSAs and WDAs.

This rule does not negate federal, state, or local requirements of the Workforce Investment Act or other specific federal programs.

(2) These standards follow the requirements set forth in the office of management and budget (OMB) circular A-133, the OMB circular A-133 compliance supplement, part 3, and other applicable federal principles.

(3) Subrecipient monitoring may include, but is not limited to, formal audits.

(4) Subrecipient monitoring need not test for all areas of compliance, but serves to provide reasonable assurance that:

(a) Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements; and

(b) Performance goals are achieved.

(B) Definitions.

As used in this rule:

(1) "Compliance requirements" include, but are not limited to, compliance requirements listed in the OMB circular A-133, the OMB circular A-133 compliance supplement, part 3, and applicable state and federal laws referenced in the subgrant agreement between ODJFS and each CFSA or WDA, or communicated by ODJFS to a CFSA or WDA pursuant to such subgrant agreements. Examples include, but are not limited to:

(a) Activities allowed or disallowed;

(b) Allowable costs/cost principles;

(c) Cash management;

(d) Eligibility; and

(e) Reporting.

(2) "Federal program" means all federal awards to a non-federal entity assigned a single number in the catalog of federal domestic assistance (CFDA).

(3) "Improvement plan" means a written statement of action to be taken by the subrecipient to correct identified deficiencies, produce the recommended improvements, or demonstrate whether the reviewer's findings either are invalid or do not warrant corrective action.

(4) "Internal control" means a process affected by an entity's management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

(a) Effectiveness and efficiency of operations;

(b) Reliability of financial reporting; and

(c) Compliance with applicable laws and regulations.

(5) "Pass-through entity" means a non-federal entity that provides a federal award to a subrecipient to carry out a federal program. Pass-through entities identify the federal awards to subrecipients, inform subrecipients of federal, state, and local compliance requirements, monitor subrecipient activities, and ensure subrecipients have single audits if required. Pass-through entities also provide technical assistance and training, issue management decisions as to audit findings and ensure corrective action is taken by subrecipients if there are audit findings against the subrecipients' grants.

(6) "Single audit" means an audit that includes both the entity's financial statements and the federal awards as described in the OMB circular A-133, compliance supplement, part 3, subpart e.

(7) "Subgrant agreement" is the means by which a grant award of federal financial assistance is issued to a subrecipient. Subgrant agreements generally identify a federal award to a subrecipient that includes a CFDA number, a program name, an award year, the federal awards entity, and the program services and requirements. A subgrant agreement may contain identifying information for multiple grant awards being passed through to the same subrecipient. For each grant award passed through to a subrecipient, there will be a subgrant agreement and this subgrant agreement should be considered as an important tool for monitoring subrecipient activities.

(8) "Subrecipient" means a non-federal entity that expends federal awards received from a pass-through entity to carry out a federal program, but does not include an individual who is a beneficiary of such a program. A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency.

(9) "Vendor" means a dealer, distributor, merchant, or other seller providing goods or services required for the conduct of a federal program. These goods or services may be for use by a CFSA, WDA, or the beneficiaries of the federal program.

(C) Subrecipient versus vendor relationship.

The CFSA or WDA may enter into contracts with vendors to obtain goods or services for the administration of a federal program or may enter into subgrant agreements to make an award of federal financial assistance to an entity to administer a federal program. While contracts with vendors require contract monitoring, such monitoring is beyond the scope of this rule, which addresses subrecipient monitoring pursuant to subgrant agreements. The substance of the relationship is more important than the form of the agreement when making the determination of whether a subrecipient or vendor relationship exists. The CFSA or WDA shall apply the following guidelines to determine whether an agreement establishes a subrecipient relationship or a vendor relationship. It is not expected that all of the characteristics will be present and judgment should be used in determining whether the relationship between the parties is that of a pass-through entity and a subrecipient or that of a purchaser and a vendor. The distinguishing characteristics are as follows:

(1) Subrecipient characteristics:

(a) Determines who is eligible to receive federal financial assistance;

(b) Measures performance against the objectives of the federal program requirements;

(c) Has responsibility for programmatic decision making and is adhering to the requirements of the federal program;

(d) Uses the federal funds to implement a program rather than provide goods or services for the program of a pass-through entity;

(e) Administers the grant from award to closeout;

(f) Develops policies and systems to ensure effective management of federal funds and compliance with federal, state, and local laws and regulations; and

(g) Ensures an established budget of costs exists to operate the program and a method of monitoring actual costs against the budget.

(2) Vendor characteristics:

(a) Provides services or goods within normal business operations;

(b) Provides similar or same goods or services to many different purchasers;

(c) Operates in a competitive environment;

(d) Provides goods or services ancillary to the operation of a federally funded program;

(e) Is not subject to compliance requirements of the federal programs; and

(f) Is not responsible for program compliance but transactions must be structured to allow the pass-through entity to assure compliance.

(D) Subgrant agreement requirements.

Each subgrant agreement shall outline, as appropriate, the scope of work, budget, performance requirements, the program authorizing legislation, and the program regulations.

(1) Subgrant agreements must include basic requirements addressing, at a minimum, administrative requirements. Those administrative requirements include:

(a) Financial management and procurement;

(b) Financial and program reports;

(c) Records retention;

(d) Cost allocation;

(e) Payment;

(f) Matching;

(g) Period of availability;

(h) Program income;

(i) Real property;

(j) Equipment and supplies;

(k) Monitoring and audits; and

(l) Other additional requirements to meet federal compliance.

(2) In accordance with those requirements, all subgrant agreements shall contain the following:

(a) Applicable CFDA title and number, award name, and name of federal agency;

(b) Notice of any significant applicable compliance requirements, including OMB circular A-133 audit requirements, arranging the audit, and submission of the final audit report to the CFSA or WDA; and

(c) Notice that the CFSA or WDA will perform an annual risk assessment to determine the appropriate level of monitoring of the subrecipient.

(E) Risk assessment.

On an annual basis, the CFSA or WDA shall determine the appropriate degree and method for the monitoring of each subrecipient by performing a risk assessment review. This risk assessment is performed to ensure adequate monitoring is performed and resources and personnel are used efficiently.

(1) The extent and frequency of subrecipient monitoring will depend on several factors including the:

(a) Amount of the award;

(b) Type of subrecipient organization;

(c) Subrecipient's prior experience with federal funds;

(d) Subrecipient's prior monitoring results;

(e) Complexity of the program requirements;

(f) Subrecipient's organizational stability; and

(g) Subrecipient's reporting history.

(2) Risk assessment review mechanisms shall be in place to identify the following:

(a) Where unallowable activities or costs could be charged to a federal program and be undetected or misappropriated, or improper disposition of property acquired with federal funds;

(b) Changes to eligibility determination systems;

(c) The accuracy of underlying report source data and the validity of the reports;

(d) The level of management commitment and understanding of federal requirements and regulatory changes; and

(e) Various internal changes that may affect performance, such as:

(i) Financial problems;

(ii) Loss of essential personnel; and

(iii) Rapid growth.

(3) The CFSA or WDA shall conduct the subrecipient risk assessment review annually. The review shall occur within a reasonable time interval from the beginning of the provision of the service or the establishment of the subrecipient relationship in order to:

(a) Identify any existing risk factors during the early phase of the grant agreement; and

(b) Determine the level of monitoring that shall occur.

(F) Subrecipient monitoring.

Subrecipient monitoring requirements are established by ODJFS to provide reasonable assurance that federal award information and compliance requirements are identified to subrecipients, subrecipient activities are monitored, subrecipient audit findings are resolved, and the impact of any subrecipient non-compliance on the pass-through entity is evaluated.

(1) Subrecipient monitoring may include, but not be limited to, the following:

(a) An on-site or desk review audit of the subrecipient's records to verify the services being provided are within the scope of the funding being received and the subrecipient has an effective means of determining recipients are eligible for the services being provided. Allowability of services and eligibility will be monitored by examining one or more of the following items:

(i) Program records to review brochures and/or materials disseminated to the public;

(ii) Program forms to ensure they capture accurate program services and eligibility requirements; and

(iii) Case files, completed applications, service delivery documentation, and other program records and forms to determine the subrecipient is appropriately assessing eligibility criteria and the service delivery documentation is valid.

(b) An on-site or desk review audit of the subrecipient's records in order to provide reasonable assurance the cost of goods, services, and property are allowable, in accordance with applicable federal regulations and expenditures appear to be within the budget submitted for approval by examining one or more of the following items:

(i) Purchasing records or invoices to ensure expenditures are allowable, necessary, and reasonable (ii) Monthly expenditure reports to compare with the annual budget amounts to determine an appropriate level of spending and expenditures being charged against the fund are supported by an approved budget;

(iii) Invoices and budgets, in order to provide reasonable assurance that costs and charges are within the scope of allowable federal costs. The reviewer may interview management personnel and review procedure manuals, inventory, and audit reports to ensure the subrecipient has effective control over and accountability for all funds, property, and other assets;

(iv) Financial records to assure accounting records identify the source of funds and provide for accurate division of charges and costs between federal and non-federal activities;

(v) Subrecipient's procedure manual or other operating policies to determine the subrecipient has an effective means of communication, internal control, and guidance for its employees to reasonably guard against the misuse of funds;

(vi) Quarterly/annual inventory reports to determine the subrecipient has a method for safeguarding assets to assure they are used solely for authorized purposes; and

(vii) Audit reports to determine compliance with any existing corrective action plan.

(c) An on-site or desk review audit of the subrecipient's records in order to provide reasonable assurance the recipient has acquired goods and services in accordance with applicable state and federal regulations by examining one or more of the following items:

(i) Subrecipient's procurement policy or manual to determine whether the policy represents an acceptable level of internal control and is in accordance with federal procurement requirements;

(ii) A sampling of various transactions to ensure the policy is being followed; and

(iii) Codes of conduct and other policies regarding standards of ethical behavior for making procurements to assure practice of acceptable procurement principles.

(d) An on-site or desk review audit in order to provide reasonable assurance reports are supported by underlying accounting or performance records and are submitted in accordance with the provisions of the subgrant agreement by examining the following items:

(i) Pass-through entities' records to assure timely receipt of required reports; and

(ii) Supporting documentation, for a sampling of reports to assure the accuracy and completeness of data and information included in the reports.

(2) In accordance with the CFSA or WDA annual risk assessment review, as described in paragraph (F) of this rule, and audit requirements, as described in paragraph (B)(5) of this rule, subrecipient monitoring may also include evaluation of the following elements, as applicable.

(a) Cash management, in which the reviewer will provide reasonable assurance federal funds are drawn down only for immediate needs. The reviewer will examine a sampling of expenditures and requests for federal funds to determine an appropriate amount of time elapsed between transfers of funds to the subrecipient.

(b) Program income, in which the reviewer will provide reasonable assurance income is correctly earned, recorded, and used in accordance with the program requirements. The reviewer will examine a sampling of the subrecipient's records to determine income is properly recorded as earned and deposited as collected.

(c) Audit requirements, in which the reviewer will provide reasonable assurance the subrecipient has obtained required audits and has submitted and is in compliance with any corrective action plan resulting from said audits. The reviewer will examine the audit report and any existing corrective action plan and obtain documentation of compliance with the existing corrective action plan.

(3) The CFSA or WDA shall provide reasonable assurance that the subrecipient obtained any required audits and takes appropriate corrective action on audit findings.

(4) Once the subrecipient monitoring is concluded, findings will be completed by the reviewer and signed by the director of the CFSA or WDA or its designee. A copy will be mailed to the subrecipient, identifying any deficiencies.

(a) Should the reviewer discover deficiencies or noncompliance issues that may result in the misuse of federal funds, immediate action to correct those issues will occur. The CFSA or WDA is responsible for recovering the funds for payment of expenditures not in compliance with grant regulations.

(b) The subrecipient will have sixty days from the issuance of the monitoring findings to develop an improvement plan to resolve any deficiencies or noncompliance issues that do not result in ineligible spending of federal funds. Failure of the subrecipient to submit and implement an improvement plan will constitute grounds for contract or subgrant agreement termination.

Replaces: 5101:9-1-88

Effective: 10/03/2011
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 5101.02
Prior Effective Dates: 4/1/06