OMB Circular A-133 requires a recipient of federal funds to monitor its subrecipients' compliance with 2 C.F.R. part 225 (OMB Circular A-87) and other applicable federal regulations. The ODJFS Office of Fiscal and Monitoring Services (OFMS) monitors county family services agency and local WIA area subrecipients through a combination of the following activities:

• Reviewing financial and performance reports;
• Performing site visits to review financial and programmatic records and observe operations; and
• Maintaining regular contact and appropriate inquiries concerning local activities.

One component of the monitoring activities is a risk assessment. It is the goal of ODJFS to assess all local areas and the individual family services agencies, and to use this data to plan monitoring efforts, provide technical assistance, and develop policy and training. The risk assessment is also used to identify counties and agencies that may be financially or administratively challenged, and therefore, may present a higher risk.

A high-risk organization is one whose management practices raise serious questions about its ability to assure proper programmatic use and financial stewardship of subaward funds. Federal regulations, in 45 C.F.R. 92.12 and 29 C.F.R. 97.12, outline special conditions for "high-risk" grantees or subgrantees. As a subgrantee, a county family services agency or local area may be considered "high-risk" for any of the following reasons:

• History of unsatisfactory performance;
• Not financially stable;
• Not meeting required management standards;
• Not conformed to terms and conditions of previous awards; or
• Otherwise not responsible.

45 CFR 92.12 also lays out special conditions and/or restrictions that may be applied to high-risk organizations, including:

• Payment on a reimbursement basis;
• Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period;
• Requiring additional, more detailed financial reports;
• Additional project monitoring;
• Requiring the grantee or subgrantee to obtain technical or management assistance; or
• Establishing additional prior approvals.

As a grantee of the federal award, ODJFS has a responsibility to ensure that the subgrantee agencies are in compliance with federal law. As such, increased monitoring by the OFMS Monitoring Services Division of subgrantees that are found to be high risk may be necessary.

ODJFS, as the pass-through agency for local family services agencies and WIA areas, is required to take immediate action to address noncompliance issues identified through subrecipient risk assessment and monitoring. ODJFS may require additional compliance testing or improvement plans. Any such action taken by ODJFS does not preclude other actions ODJFS may take under Section 5101.24 of the Revised Code.

For additional questions, please contact your ODJFS Fiscal Supervisor or call the Bureau of County Finance and Technical Assistance at (614) 752-9194.