5101:9-7-04 Workforce Investment Act (WIA) area financing, reconciliation, and closeout.

 

 

 

5101:9-7-04                 Workforce  Investment  Act  (WIA)  area  financing  and  cash management.

 

 

The  following  accounting  procedures  are  necessary  for  local  accountability  in  the financing and cash management of federal and state funds.

 

(A)  Financing.

 

Cash draws against allocations are distributed weekly to the local area upon receipt of the local area cash draw request for funds. Available funds are limited by state appropriations and federal grant awards. The area fiscal agent is notified at the beginning of the state fiscal year (SFY) of the amounts the area is eligible to receive. All payments are issued via electronic funds transfer (EFT) as described in rule 5101:9-7-24 of the Administrative Code.

 

(B)  Cash management.

 

When a local area is funded on a reimbursement basis, program costs are paid by 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 prior to the disbursement of federal program funds.

 

(1)   Requests for cash draws may be submitted weekly and processed by ODJFS in 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 on a monthly basis for all federal and state operating allocations. 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 in advance 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 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 monthly average days' cash on hand by applying the following formula, using the expenditures on the quarterly state expenditure reconciliation for the WIA data subset and the cash draw information on the detail for each WIA allocation, on an individual grant basis, as expenditures and draw amounts appear on the county finance information (CFIS) over/under report.

(2)   For each month of the At the end of each quarter, excess cash on hand shall be calculated by deducting the year to date total expenditures over the lifetime of the funding source, up to the budgeted amount, as reported on the JFS 01992 "Workforce Investment Act (WIA) Fund Certification Sheet" (rev. 4/2006) as described in rule 5101:9-7-29 of the Administrative Code, from the year to date total amount of cash draws over the lifetime of the funding source.

(3)   The average expenditures shall be calculated by dividing the total expenditures by the number of calendar days the funding has been available.

(4)   The average days' cash on hand shall then be calculated by dividing the excess cash on hand from the amount calculated in paragraph (C)(2) of this rule by the average daily expenditures calculated in paragraph (C)(3) of this rule.

(5)   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) within fifteen days of the date the local area received the calculation.

(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 within thirty days of the date the local area received the calculation.

(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)  Annual Quarterly interest calculation and reconciliation.

An interest liability accrues if federal or state funds are received prior to the day the funds are paid out. A local area shall calculate and report earned interest annually quarterly. ODJFS will complete the annual quarterly interest reconciliation using the "State Treasury Asset Reserve of Ohio" (STAR Ohio)) rate and send a preliminary spreadsheet to the WIA local area no later than the twentieth day of November.

(1)   Interest on the cumulative amount of excess cash on hand shall be compounded daily and calculated by the local area at the end of the SFY 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 annual quarterly interest reconciliation, the local area may take into consideration the months in which the WIA 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 quarterly 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 SFY quarter. The format of the annual 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 state or 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 state or federal program allocation for the SFY quarter.

(c) 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.

(3)   For each applicable state or federal program allocation with a total net interest liability (a positive number calculated in the annual quarterly reconciliation), the local area shall report the net interest liability as program income in the

subsequent quarterly expenditure report.

(4)   For each applicable state or federal program allocation with a total net offsetting interest liability (a negative number calculated in the annual 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)  WIA accruals and liquidations of accruals.

As obligations are incurred, they become accrued expenses and shall be reported as accruals. At the time the accrual is liquidated, the WIA local area may draw down funds and shall report the disbursement of the accrual as expenditure for that quarter. When a WIA local area has accruals at the end of the grant period, those accruals shall be disbursed by the end of the liquidation period.

(F)      The WIA local area shall maintain the completed annual quarterly interest reconciliation documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code.

(G)     This documentation may be subject to inspection, monitoring, and audit by the ODJFS office of fiscal and monitoring services (OFMS) and the Ohio auditor of state (AOS).

Effective:                                                     12/01/2010

CERTIFIED ELECTRONICALLY

Certification

11/15/2010

Date

Promulgated Under:                           111.15

Statutory Authority:                           5101.02, 6301.03

Rule Amplifies:                                  5101.02, 6301.03

Prior Effective Dates:                         8/31/07, 11/7/09