Rule 5101:9-9-29 | Ohio department of job and family services (ODJFS) subrecipient monitoring and audit.
(A) Ohio department of job and family services (ODJFS) as a pass-through entity (PTE) is required to manage and monitor their subrecipients as stated in the most recent version of 2 C.F.R. part 200, subpart D, "Subrecipient Monitoring and Management."
(B) Definitions:
(1) "Public office" refers to any state agency, public institution, political subdivision, or other organized body, office, agency institution, or entity established by the laws of this state for the exercise of any function of government.
(2) "Subrecipient" means an entity that receives a subaward from a PTE to carry out part of a federal award. Subrecipients can also be a PTE of federal funds to organizations which become their subrecipients.
(3) "Recipient" means an entity that receives a federal award directly from a federal agency to carry out an activity under a federal program. The term recipient does not include subrecipients or individuals that are participants or beneficiaries of the award.
(4) "Pass-through entity" (PTE) means an entity (recipient or subrecipient) that provides a subaward to a subrecipient to carry out part of a federal program. The authority of the PTE flows through the subaward agreement between the PTE and subrecipient.
(5) "Subaward" means an award provided by a PTE, a subrecipient for the subrecipient to contribute to the goals and objectives of the project by carrying out part of a federal award received by the PTE. It does not include payments to a contractor, beneficiary, or participant. A subaward may be provided through any form of legal agreement consistent with criteria in 2 C.F.R. part 200.331, including an agreement that the PTE considers a contract.
(6) "Subrecipient monitoring" refers to the process by which a PTE oversees and ensures that its subrecipients comply with applicable laws, regulations, and the terms of the award.
(7) "Observations" identify an issue, or noncompliance between what is observed and what is required based on standards, policies, applicable laws or regulations. Observations are only issued during subrecipient monitoring reviews.
(8) "Auditing" refers to an independent examination of an organization's use of federal funds to ensure compliance with applicable laws, regulations, and the terms of the award.
(9) "Auditee" means a department, organization, or entity that is being examined or evaluated during an audit.
(10) "Audit finding" documents an issue where an auditee's financial reporting, controls, or compliance do not meet required accounting standards or regulatory expectations.
(11) "Questioned cost" means an amount, expended or received from a federal award, identified during an audit, that in the auditor's judgment is noncompliant with applicable laws, regulations, or the terms and conditions of the federal award which at the time of the audit, lacked adequate documentation to support compliance.
(C) For the purpose of audits or subrecipient monitoring performed by ODJFS, auditees and subrecipients under review must maintain documentation conforming to all requirements prescribed by ODJFS, and applicable laws or regulations. Auditees and subrecipients must prepare and maintain documentation to support all transactions required by applicable laws and regulations, and which substantiates compliance with all applicable laws or regulations.
(D) Auditees and subrecipients must make available to ODJFS personnel all records necessary to document all transactions. Records must include sufficient detail to disclose:
(1) Services provided to program participants.
(2) Administrative cost of services provided to program participants.
(3) Charges made and payments received for items identified in paragraphs (D)(1) and (D)(2) of this rule.
(4) Cost of operating the organizations, agencies, programs, activities, and functions.
(E) Auditees and subrecipients must maintain adequate systems of internal control to ensure:
(1) Accurate and reliable financial and administrative reports.
(2) Efficient and effective use of resources.
(3) Compliance with applicable laws and regulations.
(F) Subrecipient monitoring reviews performed by ODJFS consist of:
(1) An examination to determine if funds passed through to subrecipients are used appropriately, effectively, and in compliance with all applicable laws and regulations. Monitoring is proactive; it allows for early intervention to correct issues before they become audit findings.
(2) An examination or review includes any assessment of records, data, or other evidence to determine whether any public office or subrecipient has accounted for, claimed, or expended federal funds received from or through ODJFS.
(3) Monitoring activities that may take the form of desk reviews, site visits, financial & performance report reviews, audit follow-ups, and providing technical assistance as needed.
(4) Subrecipient monitoring results may require completion of a continuous improvement plan for any observations identified in the monitoring review.
(a) The components of the continuous improvement plan at a minimum include:
(i) Observation and recommendation.
(ii) Underlying cause of the issue.
(iii) Implementation steps.
(iv) Resource needs.
(v) Implementation schedule.
(vi) Position(s) responsible for implementation.
(vii) Completed on agency letterhead, signed and dated by agency head or designee.
(b) Continuous improvement plans shall be completed within a reasonable amount of time as agreed upon but not to exceed thirty days. If after thirty days no completed continuous improvement plans are received, ODJFS reserves the right to issue the final subrecipient monitoring report with no agency response.
(c) Any completed continuous improvement plans received from the agency are reviewed and acknowledged. ODJFS acknowledgement does not indicate approval of any actions identified in the continuous improvement plan(s) or make representations as to its completeness or effectiveness.
(d) At the completion of the monitoring review a final subrecipient monitoring report is released to the agency and includes applicable program areas. If applicable, this report will include the continuous improvement plan(s) completed by the subrecipient.
(G) Audits performed by ODJFS consist of:
(1) An examination to determine if subrecipients have properly managed and reported funds in compliance with all applicable federal requirements, program rules, and grant conditions. Auditing is reactive; it produces formal reports and findings that may require corrective action plans or even the repayment of funds if costs are disallowed. This provides accountability, prevents misuse of funds, and ensures that program objectives are met.
(2) An examination or review includes any assessment of records, data, or other evidence to determine whether any public office or subrecipient has accounted for, claimed, or expended federal funds received from or through ODJFS. The timing, frequency, scope, and objectives may vary with ODJFS' assessment of needs and the available resources of ODJFS.
(3) Audit results are communicated in an audit report. This may be the basis for action by ODJFS as authorized by applicable laws or regulations, state statute or administrative rule, including, but not limited to, section 5101.24 of the Revised Code.
(4) At the conclusion of an audit, ODJFS may conduct an exit conference with the auditee. Objectives of exit conferences include:
(a) To provide ODJFS with an opportunity to present the results of the audit and obtain the response of the auditees.
(b) To provide the auditee with an understanding of the audit findings.
(c) To obtain relevant information with respect to issues raised by the audit.
(5) The auditee's response to the audit findings shall be completed within a reasonable amount of time as agreed upon but not to exceed thirty days. If after thirty days no response is received, ODJFS reserves the right to issue the final audit report with no agency response.
(6) Audit reports are subject to review by ODJFS, as necessary and required by 2 C.F.R. part 200.
(H) Based on subrecipient monitoring and audit results, ODJFS reserves the right to exercise any administrative, contractual, equitable, or legal remedies available without limitation. Additionally, ODJFS may take one or more of the following actions:
(1) Temporarily withhold payments until the subrecipient takes corrective action.
(2) Disallow costs for all or part of the activity associated with the noncompliance of the subrecipient.
(3) Suspend or terminate the award in part or in its entirety.
(4) Require payments as reimbursements rather than advance payments.
(5) Require additional or more detailed financial reports.
(6) Require additional monitoring.
(7) Require the subrecipient to obtain technical assistance.
(I) ODJFS may develop and implement policies and procedures at variance with the provisions of this rule as necessary to comply with the requirements of applicable laws and regulations.
Last updated May 11, 2026 at 8:06 AM
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