The Ohio Department of Job and Family Services (ODJFS) is communicating the federal guidance and response recently received regarding prior approval to claim Federal financial participation (FFP) for costs associated with mass severance pay.

In accordance with 2 C.F.R. part 225 (formally OMB Circular A-87) Appendix B, Chapter 8 (g) titled "Severance Pay," severance payments may only be charged to federally-funded programs when associated with "normal turnover," and not as "abnormal or mass severance pay." This section states that "abnormal or mass severance pay will be considered on a case-by-case basis and is allowable only if approved by the cognizant Federal agency." The United States Department of Health and Human Services (HHS), our cognizant Federal agency, advised ODJFS "normal turnover" is considered the retirements/ resignations/terminations that occur during normal daily operations, and "abnormal or mass severance pay" is associated with reductions due to program cutbacks or elimination/reductions in the government workforce/buy-outs/etc.

ODJFS has supported and endorsed county requests to claim FFP for a portion of the costs associated with mass severance, and forwarded two such plans to DHHS for approval. DHHS has returned those plans to ODJFS with the following statement:

"Requests from individual county service agencies for approval of the use of federal funds for mass severance pay or ERIP will not be approved by HHS."

In accordance with the HHS Implementation Guide for OMB Circular A-87 (ASMB C-10), costs associated with mass severance include all of the following:

• Lump-sum payment that may be linked to years of service;
• Increased pension benefits such as granting additional years or eliminating penalties for early retirement;
• Payments of unused leave; and
• The cost of any other incentive offered to employees as an incentive to leave government service, such as buy-outs.

Local family service agencies are hereby notified that since 2 C.F.R. part 225 Appendix B requires the cognizant Federal agency (and not the awarding agency) to approve such costs and ODJFS is unable to obtain approval from its cognizant Federal agency, no costs associated with mass severance are eligible for FFP reimbursement. Buy-outs, voluntary separation plans, etc. may only be paid for with local dollars.

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