HomeMy WebLinkAboutResolutions - 1981.02.05 - 14687Miscellaneous Resolution: #81040 Dated: February 5, 1981
BY: PUBLIC SERVICES ODNEI DI - James E. Lanni, Chairman
IN RE: Sub-Recipient Audit Resolution Procedures and Policies
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS the Oakland County Board of Commissioners by Miscellaneous
Resolution NO. 6546 and 8883 applied for and was granted the designation
as Prime Sponsor by the U. S. Department of Labor to administer the provisions
of the Comprehensive EMployment and Training Act of 1973 and the Comprehensive
Employment and Training Act Amendments of 1978; and
WHEREAS a Sub-Recipient Audit Resolution Process Manual has been
developed in conjunction with our recently developed Financial Procedures
Manual by the Certified Public Accounting Firm of Plante and Moran; and
WHEREAS it was developed in response to the need for a procedure
to be established whereby this audit resolution process can be accounted for;
and
WHEREAS the previously established Audit Policy for Questioned Costs
per Board Resolution No. 8865 dated March 1, 1979, has become obsolete in
accordance with the Office of the Inspector General (0.I.G.) Department of
Labor; and
WHEREAS the Department of Labor, Employment and Training Administration
has recently started stressing the fact that the County of Oakland Prime Sponsor
is financially liable for sub-recipient disallowed costs as reflected in their
audit reports.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners approves the attached Sub-Recipient Audit Resolution Procedures
and Policies which establish a procedure and authority for resolving sub-recipient
audit reports.
BE IT FURTHER RESOLVED that a monthly written status report of
outstanding audits will be submitted to the Public Services Committee.
Mr. Chairperson, on behalf of the Public Services Committee, I
move the adoption of the foregoing resolution.
PUBLIC SERVICES COMMITIEE
,
OAKLANC. ATV
EMPLOYMENT AND Th.mINING DIVISYON
SU1L-RECIP1ENT AUDIT PROCESS
• FLOW. CHART
EXHIBIT A
PAGE 21
Provides list of 2. Performs audits of
sub-recipients sub-recipients,
to be audited.
1 .
Attends Audit Con-
ference with sub-
recipient and
reviews documentation
submitted.
cc.
Reviews additional docu-
mentation and submits
recommendation for
allowance or disallowance
within 15 days of reciept.
4.D Initiatee prucvdures fur
collection of disallowed
costs and notifies Public
Service Committee.
Submits notice of insufficienc documentation
tha Sub-Recipient and the Employment and Training
Division.
Colducts exit interview with Program Activity
Sulaervisor present.
Submits draft audit to Sub-Recipient.
Allows 15 days for response to the draft audit.
Prepares final audit incorporating any response
to the draft.
All correspondence is signed by the Program
Activity Supervisor.
a a
*0 *
OFFICE OF
TILE INSPECTOR
GENERAL
OAKLAND COUNTY
AUDIT
DIVISION
ACCOUNTING AND
MIDGET SECTION
PROGRAM ACTIVITY
SECTION
OAKLAND COUNTY
REIMBURSEMINT
DIVISION
Civil
Counsel PUBLIC SERVICE
COMMITTEE
IRecords Audits re-4.
calved on the
Audit Control
Log.
4.A Notifies sub-
recipient to
attend Audit Con-
ference and to
present required
documentation within
30 days.
Attempts oollectiol 6. Initiates legal 7. Reviews audit find-
of accounts delin- proceedings for ings and action
quent in excess uncollectable taken in consid-
of 90 days. accounts, eration, of cancelling
future funding to
the sub-recipients.
accounts to the
Civil Counsel and presents sum-
mary of actions
taken to the Publis
Service Committiee,
Prepares analysis 5.
of sub-recipient
auditwithin 15 days
of receipt.
Refers uncollectable • 4
3,A Attends Audit 4.B
Conference with
sub-recipient
and reviews docu-
mentation submitted.
3.g Formally notifies
sub-recipient of •
Audit Conference
finding within 15
days of the conferen
and of any addi-
tional documen- 4.0
tation required
to be submitted
within 30 days. **
3.0 Reviews findings
and documentation
within 10 days.
3.0 Formally notifies
sub-recipient of
findings. 40
A l.4 DIG Resident Auditor . 3,E Records resolution
reviews all audit on Audit Control Log and
resolutions quarterly. . records receivable,6 liability.
3.F Follows up on questioned
Costs to be resolved by the
Employment & Training Div.
3.0 Prepares monthly simrsaries
identifying the audits open,
pending, delinquent or closed,
and the betel audits received
to date. Summaries are forwarded
to the Activity Supervisors and
the Director.
7 ---
OAKLAND COUNTY
••11 I
EMPLOYMENT AND TRAINING DIVInSee
AUDIT POLICY FOR QUESTIONABLE COSTS
In accordance with the new Comprehensive Employment and Training Act
(CETA) Regulations issued April 3, 1979, under Vtle 20, Code of Federal
Regulations, Part 676, the County of Oakland Er.ployeent and Training Admietis--
tration has revised its Anc7 Policy for Questions,ble Costs. This -CVIE:
reflects the requirements eeedoted by the Act for establishing p:ecHee•s 's
investigate and resolve queetionable costs identified through audil.
policies represent a standard of reasonableness which will maintain the fiscal .
integrity of our financial system and permit sub-contractors. to operate in the -
field without unreasonable delays and expanded uncertainty. Questionable costs.
identified through audit may be resolved at the Prime Sponsor level, however,
all decisions rendered are subjected to review by the Office of Inspector
General and the Department of Labor, and therefore, may be overruled at their
discretion.
The policies exist in three specifia segments; (1) Documentation,
(2) Recaptured Funds, and (3) Costs Reaeo.---oe-e for Allowance. The purpose of
the review of these policies is to establish authority and procedure, through
the Department of Labor and the Office of Inspector General, for resolving audit
findings. These policies will subsequently be included in the Annual Manpower ,
Plan for Fiscal Year 1981.
Policy D: Documentation
All costs not substantiated during an audit are questioned. The
documentation policy allows a subcontractor the opportunity to
substantiate these costs by providing specific documentstfsa.
Documentation may include financial documents such ae copies of
payroll registers, bank statements, and reimbursement requests.
Copies of participant PRIRs, contract modifications, written
authorization of expenditures, reimbursement modifications, Regu-
lation specifications, and/or any essential evidence verifying
any or all costs questioned also 1 ,en, be included in the docus
39
mentation required. Audit findv
deficiencies without providing e
expenditures. Therefore, contractl
Tíy identify. broad system
details of the questionable
in question are given the
• opportunity to resolve all findings reported by ttoviding
sufficient documentation.
In the case of expenditures charged to the wrong Title, contractors
must provide verification that the costs in question did not -result
in duplicate charges to the program.
tt:0111.1 0A.KL1ND COUNTY
EMPLOYMENT AND TRAINING DIVISION
AUDIT POLICY FOR QUESTIONABLE COSTS
Policy D: Documentation (Continued)
As a result of audit findings, classroom training Contractors are
permitted to resolve questionable costs by substantiating expen-
ditures on a tuition per student ha-'.„
Contractors audited are permitted 30 days, from the date of con-
ference between themselves and the Prime Sponsor, to substantiate
any or all questionable expenditures. The documentation provided
must comply with auditing stande-ds and must be found acceptable
by the Office of 7nspector Geeerel and the Department of Labor in
order to be al 'd. If this deeumentation is not submitted within.
the period-specified, the questionable expenditures will be dis-
allowed and required to he refunded to the Prime Sponsor. Questioned
costs identified through audit due to lack of documentation may
be recommended for allowance, if the appropriate documentation. is
- provided within a reasonable time period.
Policy E: Recaptured Funds
Resolution ofaudit findings may be completed by repayment of dis-
allowed costs to the Employment and Training Administration,
This payment is a result of Federal Regulation violations and/or ,
improper expenditures due to accounting and administrative in-
adequacies on the part of the agency in question.
In each instance of disallowed costs payable, if the audit reviewed
also indicated that there is a surplus of allowable expendituyen
which have not been requested for reimbursement, the Prime Sponsor' .
may not net the disallowed expenses against the surplus expenditures,
Only the Grant Officer (DOL) has authority to net disallowed 'expenses
against surplus expenditures. Therefore, all cases should he for-
warded to the Department of Labor for audit resolution.
Policy F: Costs Recommended for Allowance
• Resolution of audit findings may be completed by recommending costs
for allowance to the Department of Labor. Pe• reeling to Title 20,
Code of Federal Regulations, Part 676.88 (c), allowability of cer-
tain questioned costs may be made by the Grant Office (DOL) if it
can be determined that
-e The activity was not -fraudulent and the violation did not
take place with the knowledge of the recipient, and
•
(Contineed. OAKLAND COUNTY ,
EMPLOYMENT AND TRAINING DIVISION
AUDIT POLICY FOR QUESTIONABLE COSTS
Policy F: Costs Recommended for Allowance (Continued)
- Immediate action was taken to remove any ineligible participants,
and
•Eligibility determination pro es or other such management
systems and mechanisms required in these regulations were pro-
perly followed and monitored, and
- Immediate action was tee:e to r,r,--7iy the pr'hlc
questioned activity or ineligibility, and
- ' The magnitude of questioned costs or activities
ausing the
aot substantial,
The questionable costs identified through audit may be allowed if
it meets all applicable criteria described above. Only the Department
of L.s.r may use the five criteria to allow costs questioned in sub-
grantee audit reports. However, the Prime Sponsor may use the
criteria in RECOMMENDING that the Department of Labor allow the cost
in question.
In accordance with the Federal Regulations stipulated above, the
following costs are recommended for allowance as a result of
questioned costs identified in audit findings:
1. Wages (including those received for overtime work and
leave taken during this period of employment) paid to
any Public Service Employment (PSE) participant from
funds under the Act are limited to the full-time rate
which is specified by Federal Re'"! ion for each con-
- tinuing grant under the Act. Th3e full-time rate, if
annualized, may equal, but cannot exceed the maximum
rate allowable by Federal Regulation for the particular
grant period in question. - This also 1!ndledea the cost of
fringe benefits to the extent that they did pt exceed the
annual earnings allowable by Federal. Y3 ,:;7 ,ons for the
period in question. In the event of questienable costs
taining to the maximum full-time rate for le:e and fringe
benefit compensation, documentation must be nrovided to sub-
Stantiate otherwise, in order for the related costs to be
recommended for allowance.
2. On-the-job (OJT) is training given to a participant, who has
been hired first by an employer, in the pritete or public
sector, and which occurs while the partied:.: is engaged in
productive work which provides knowledge or skills essential
to the 11111 and adequate performance of the job.
OAKLAND COUNTY (Cot
LOYMENT AND TRAINING. DIVISION'
AUDIT POLICY FOR QUESTIONABLE COSTS
'
- Policy F: Costs Recommended for A
2. Continued
ce (Continued)
In reviewing OJT contracts at the time of it must be
determined whether or not each CETA partiele.et under the
. contract agreement received, the total reiree -f training
hours specified in the contract. It Must elso be determined
if each participant received the hourly wage specified in
order to assess if the intent of the contract negotiation ,
has been met, and that the employer complied with the Act
and Federal Regulations,
As a. result of e -.3it findings, queetionable costs have been
identified resuJting from the compensationof accrued holi=,
days to OJT employers. It is not the issue of holiday pay
that is being challenged in each audit finding. It is the issue
of whether or not the total hours of training specified in the .
contract has been received by the participant inquestion. In
each instance, • the total hours of training times the hourly
rate specified in the contract. agreement must be equal to the
total amount allowable for reie:eursement under the contract.
If a variance exists as a result of holiday pay in which no
hours of training were received, it will result in questionable •
costs. Documentation must be provided to substantiate other-
wise, in order for the related costs to be recommended for
allowance.
#81040 February 5, 1981
Moved by Lanni supported by Cagney the resolution be adopted.
AYES: Price, Whitlock, Wilcox, Aaron, Caddell, Cagney, DiGiovanni, Doyon,
Fortino, Gabler, Geary, Gosling, Hobart, Jackson, Lanni, Moffitt, Montante, Moore,
Patterson, Perinoff, Pernick. (21)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland and
having a seal, do hereby certify that I have compared the annexed copy of
Miscellaneous Resolution #81040 adopted by the Oakland County Board of
Commissioners at their meeting held on February 5, 1981
with the original record thereof now remaining in my
office, and that it is a true and correct transcript
therefrom, and of the whole thereof.
In Testimony Whereof, I have hereunto set my hand and
affixed the seal of said County at Pontiac, Michigan
— 5th February In 81
Lynn D.
Clerk