U.S. ELECTION ASSISTANCE 

COMMISSION 

OFFICE OF INSPECTOR GENERAL

FINAL REPORT: 

ADMINISTRATION OF PAYMENTS 

RECEIVED UNDER THE HELP 

AMERICA VOTE ACT BY THE OHIO 

SECRETARY OF STATE 

Report No. 

E-HP-OH-09-06 

May 2007
U.S. ELECTION ASSISTANCE COMMISSION

 OFFICE OF INSPECTOR GENERAL

 1225 New York Ave. NW - Suite 1100 

 Washington, DC 20005

May 3, 2007 

Memorandum 

To: Thomas Wilkey 

 Executive Director 

From: Curtis W. Crider 

 Inspector General 

Subject: Final Audit Report - Administration of Payments Received Under the Help 

America Vote Act by the Ohio Secretary of State (Assignment Number E-HPOH-09-06) 

 This report presents the results of the subject audit. The objectives of the audit 

were to determine whether Ohio (1) expended Help America Vote Act (HAVA) 

payments in accordance with the Act and related administrative requirements and (2) 

complied with the HAVA requirements for replacing punch card or lever voting 

machines, for appropriating a 5 percent match for requirements payments, for 

establishing an election fund, and for maintaining state expenditures for elections at a 

level not less than expended in fiscal year 2000. 

 

 The report concluded that Ohio generally complied with requirements and 

identified the following areas needing management attention: 

9 Ohio did not deposit interest of approximately $7 million earned on HAVA 

payments and State matching funds in the State election fund in accordance 

with HAVA Section 254(b)(1). 

 

9 Ohio advanced HAVA funds to counties that exceeded the counties’ 

immediate cash needs. Advancing funds before they were needed reduced the 

interest that was earned by the election fund. 

9 Ohio incorrectly charged salary costs and fringe benefits to the HAVA 

accounts resulting in a minor overpayment of $875. 

 

 In a March 20, 2007 response to the draft report (Appendix C), the Ohio Secretary 

of State agreed with the report’s findings. Regarding the interest due on the HAVA funds, 

the Secretary of State indicated that Ohio had deposited $6.8 million into the State 

HAVA fund. In addition, the Secretary of State proposed that additional interest due be 

offset against Ohio’s appropriation of excess matching funds for the Federal requirements 
payments. The response also said that counties would be required to return any unspent 

HAVA grant monies to the Secretary of State and adjustments had been made for the 

overcharged salary and fringe benefit costs.

 Please provide us with your written response to the recommendations included in 

this report by July 6, 2007. Your response should contain information on actions taken or 

planned, including target dates and titles of EAC officials responsible for implementing 

the recommendations. 

 Section 5(a) of the Inspector General Act (5 U.S.C. § App.1) requires the Office 

of Inspector General to list this report in its semiannual report to Congress. 

 If you have any questions regarding this report, please call me at (202) 566-3125. 

2 
BACKGROUND

HELP AMERICA 

VOTE ACT

The Help America Vote Act of 2002 (HAVA or the Act) created the 

U.S. Election Assistance Commission (EAC or Commission) to assist 

States and insular areas with the improvement of the administration of 

Federal elections and to provide funds to States to help implement 

these improvements. HAVA authorizes payments to States under Titles 

I and II, as follows: 

9 Title I, Section 101 payments are for activities such as 

complying with Title III of HAVA for uniform and 

nondiscriminatory election technology and administration 

requirements, improving the administration of elections for 

Federal office, educating voters, training election officials and 

poll workers, and developing a State plan for requirements 

payments. 

9 Title I, Section 102 payments are available only for the 

replacement of punch card and lever-action voting systems. 

9 Title II, Section 251 requirements payments are for complying 

with Title III requirements for voting system equipment and for 

addressing provisional voting, voting information, statewide 

voter registration lists, and voters who register by mail. 

Title II also requires that States must do the following: 

9 Appropriate funds for carrying out the activities for which 

requirements payments are made “equal to 5 percent of the total 

amount to be spent for such activities.” (Section 253(b)(5)). 

9 “Maintain the expenditures of the State for activities funded by 

the [requirements] payment at a level that is not less than the 

level of such expenditures maintained by the State for the fiscal 

year ending prior to November 2000.” (Section 254 (a)(7)). 

9 Establish an election fund for amounts appropriated by the 

State “for carrying out the activities for which the requirements 

payment is made,” for the Federal requirements payments 

received, for “such other amounts as may be appropriated under 

law,” and for “interest earned on deposits of the fund.” (Section 

254 (b)(1)). 

1 
FUNDING FOR 

OHIO

FINANCIAL 

MANAGEMENT 

REQUIREMENTS

HAVA and State matching funds received and expended by Ohio are 

as follows: 

TYPE OF AMOUNT EXPENDITURES 

PAYMENT RECEIVED AMOUNT AS OF 

101 $10,384,931 $10,384,931 6/30/2006 

102 30,667,664 30,667,664 6/30/2006 

251 90,992,517 67,889,088 6/30/2006 

State Match 5,800,000 5,800,000 6/30/2006 

Totals $137,845,112 $114,741,683 

Within the Office of the Ohio Secretary of State (Office), HAVA 

programs are administered by the Elections Division and HAVA 

payments are made by the Finance Division. To account for the 

payments, HAVA requires States to maintain records that are 

consistent with sound accounting principles that fully disclose the 

amount and disposition of the payments, that identify project costs 

financed with the payments and with other sources, and that will 

facilitate an effective audit. 

In addition, the Commission notified States of other management 

requirements. Specifically, that States must do the following: 

9 Comply with the Uniform Administrative Requirements for 

Grants and Cooperative Agreements with State and Local 

Governments (also known as the “Common Rule” and 

published in 41 CFR 105-71). 

9 Expend payments in accordance with cost principles for 

establishing the allowability of certain items of cost for Federal 

participation issued by the Office of Management and Budget 

(OMB) in Circular A-87. 

9 Submit annual financial reports on the use of Title I and Title II 

payments. 

The objective of our audit was to determine whether the Office (1) 

expended HAVA payments in accordance with the Act and related 

administrative requirements and (2) complied with the HAVA 

requirements for replacing punch card or lever voting machines, for 

establishing an election fund, for obtaining a 5 percent match of the 

funds for activities financed with Section 251 requirements payments 

from the State, and for maintaining State expenditures for elections at a 

level not less than expended in fiscal year 2000. 

OBJECTIVE 

2 
Specifically, we audited expenditures for Ohio’s fiscal years 2004 

through 2006 and reviewed controls to assess their adequacy over the 

expenditure of HAVA funds. We also evaluated compliance with 

certain HAVA requirements for the following activities: 

9 Accumulating financial information reported to EAC on the 

Financial Status Reports (Standard Form number 269). 

9 Accounting for property. 

9 Purchasing goods and services. 

9 Accounting for salaries. 

9 Spending by counties. 

We also determined whether the Office had complied with the 

requirements in HAVA applicable to Section 251 requirements 

payments for the following activities: 

9 Establishing and maintaining the election fund. 

9 Appropriating funds equal to 5 percent of the amount necessary 

for carrying out activities financed with Section 251 

requirements payments. 

9 Sustaining the State’s level of expenditures for elections. 

3 
RESULTS OF THE AUDIT

SUMMARY We concluded that the Office generally administered HAVA funds in 

accordance with requirements. We also found that Ohio properly 

established the State election fund, appropriated and deposited into the 

election fund its matching monies, and sustained the appropriate level of 

State expenditures for elections. Ohio did not, however, deposit into the 

election fund, as required by HAVA, interest earned on the HAVA 

payments and on State matching funds. Based on our inquiries, the Ohio 

legislature instructed the Director of Ohio’s Office of Budget and 

Management (OBM) to deposit into the election fund interest of $6.8 

million earned on the HAVA funds. Interest earned on the State matching 

funds is not yet resolved. 

We also found that the Office needs to improve its administrative 

procedures to minimize the time between its advance and county 

expenditure of HAVA funds and to accurately identify salaries financed 

with HAVA funds. 

INTEREST The Office did not deposit interest earned on HAVA payments and State 

matching funds in the State election fund in accordance with 

requirements. HAVA, in Section 254(b)(1) requires States to deposit 

requirements payments, funds appropriated to match the requirements 

payment, and interest into a State election fund, described as follows: 

. . . a fund which is established in the treasury of the State 

government, which is used in accordance with paragraph 

(2), and which consists of the following amounts: 

(A)Amounts appropriated or otherwise made 

available by the State for carrying out the 

activities for which the requirements payment 

is made to the State under this part. 

(B) The requirements payment made to the State 

under this part. 

(C) Such other amounts as may be appropriated 

under law. 

(D)Interest earned on deposits of the fund. 

The General Services Administration electronically transferred the 

HAVA Sections 101, 102, and 251 funds to a State account in Key Bank. 

The State Controlling Board set up several funds for the Office to receive 

and expend the appropriation of these HAVA funds. It also set up a fund 

to receive and expend the appropriation of the State matching funds of 

$5.8 million. Section 254 (b)(2) of HAVA requires that amounts “in the 

fund shall be used by the State exclusively to carry out the activities for 

4 
which the requirements payment is made to the State under this part.” 

Thus, interest earned on HAVA payments and State matching funds must 

be used only for authorized activities. However, we found that the State 

deposited interest earned on HAVA and the matching funds into the 

General Revenue Fund (GRF) of the State, which was not reserved of use 

only on HAVA-related activities. . 

The interest issue occurred because Ohio law1 requires that all interest 

earned on deposits with the State Treasurer be credited to the GRF unless 

specific State legislation provides otherwise. Also, staff of the Office 

inquired of the OBM whether interest earned would be deposited into the 

HAVA fund accounts. The OBM stated that no interest would be paid to 

the HAVA fund accounts unless the State statute authorizing the funds 

specifically stated that interest was to be earned on the fund deposits. 

According to responses to our inquiries, the Office and the OBM agreed 

that interest on HAVA funds should be credited to and deposited in the 

HAVA funds. OBM calculated that the State earned approximately $6.8 

million as of June 30, 2006, on HAVA sections 101, 102, and 251 funds. 

It did not, however, compute the interest on the State matching funds of 

$5.8 million, which was appropriated by the State legislature effective 

March 14, 2003. 

Subsequently, the 126th General Assembly of the Ohio legislature passed 

Amended Substitute House Bill 699, which required the Director of OBM 

to transfer the $6.8 million in interest earned on HAVA funds through 

June 30, 2006, and subsequent interest earnings into the HAVA funds 

accounts. We noted, however, that had the State Treasurer credited the 

interest quarterly to the HAVA funds instead of depositing the interest 

into the GRF, the HAVA fund balance on which the interest would be 

calculated would have been larger. Thus, the amount of interest earned 

would be greater than the $6.8 million plus subsequent interest earnings 

authorized by the Ohio legislature. 

Recommendation 

We recommend that the EAC require the Office to request legislative 

approval to: 

1. Calculate and pay interest on the State matching funds of $5.8 

million to the HAVA requirements fund accounts. 

 

1

 Section 113.09 of the Ohio Revised Code states: “Except as provided in section 113.10 of the Revised 

Code, all moneys deposited with the treasurer of state, the disposition of which is not otherwise provided 

for by law, shall be credited to the general revenue fund, which is hereby created in the state treasury . . . 

All investment earnings on moneys deposited in the state treasury shall be credited to the general revenue 

fund unless (A)The disposition of the earnings is otherwise provided for by law; ...” 

5 
2. Calculate the additional interest that would have been earned on 

the HAVA funds from 2004 to December 2006 had interest been 

deposited to the HAVA fund accounts on a quarterly basis. 

3. Deposit the interest on the State Match and the additional interest 

on the HAVA funds into the appropriate HAVA Section 251 fund 

account. 

Secretary of State Response 

The Secretary of State agreed with the findings and said that $6.8 million 

had already been deposited into Ohio’s HAVA funds to resolve the 

interest due on the State’s matching funds. The Secretary of State also 

stated that she believed it would be “overly burdensome, expensive, and 

manually laborious” to calculate additional interest. As an alternative, she 

proposed using the state’s approximate $1 million overmatch of HAVA 

requirements payments to offset the additional interest. The OBM 

estimated the additional interest to be about $212,290. 

Office of Inspector General Comments 

The Secretary of State’s proposal to resolve the additional interest appears 

reasonable. However, the EAC must make the final determination on the 

appropriateness of the proposed solution.

CASH 

MANAGEMENT

The Office advanced HAVA funds to counties that exceeded the counties’ 

immediate cash needs. This practice is not consistent with the cash 

management requirements included in 41 CFR 105-71.120(b)(7), which 

provide that a State should have procedures for “minimizing the time 

elapsing between the transfer of funds from the U.S. Treasury and 

disbursement by grantees and subgrantees . . . whenever advance payment 

procedures are used.” Advancing funds before they are needed reduces 

the interest that is earned by the election fund. 

This situation occurred because the OBM had advised the Office that they 

could not retain interest and because the Office did not incorporate any 

cash management provisions in its county grants for voter registration. In 

addition, while the voter education and poll worker training grants 

incorporated by reference the Federal administrative requirements for 

grants, they did not specify any cash management guidelines. Such 

guidance could explain how soon advances must be used; whether they 

may be invested until needed; what to do with interest earned on the 

advanced funds, if any; and whether unused funds and earned interest 

should be returned to the Office. Instead, once grants were signed, the 

Office, in most instances, sent checks to the counties for the entire amount 

of the grants. 

6 
Overall, the Office advanced $5.4 million in HAVA funds to counties for 

voter education, poll worker training, and the voter registration system. A 

review of the three largest Ohio counties (Cuyahoga, Hamilton, and 

Franklin) revealed that the counties did not expend a significant portion of 

the advanced funds for extensive periods of time. Further, the counties 

had not returned the unspent funds to the Office. 

UNEXPENDED ADVANCES 

Recipient 

and Grant Type

Grant Check 

Date 

Quarters 

Outstanding* 

Amount 

Outstanding 

Cuyahoga County

Voter education and 

poll worker training 06/03/05 4 257,933 

Voter registration 12/01/03 2 150,000 

Franklin County

Voter education and 

poll worker training 07/19/05 3 198,963 

Voter registration 04/20/04 1 352,959 

1 317,584 

7 264,522 

Hamilton County

Voter education and 

poll worker training 06/16/05 2 158,378 

2 156,973 

Voter registration 12/11/03 3 130,577 

7 91,319 

*We calculated the quarters outstanding by using the time elapsed from the date of the 

grant check to the date the funds were reported as expended, or until June 30, 2006, if the 

funds had not been reported as expended. We rounded the result to the nearest quarter of 

a year. 

Recommendations 

We recommend that the EAC require the Office to: 

4. Reimburse the Ohio HAVA funds for the interest lost on the 

excess advances made to Cuyahoga, Franklin, and Hamilton 

Counties where the time between the advance and the 

disbursement of the funds exceeded more than 3 days. 

5. Determine the extent of any other outstanding advances to 

counties and reimburse the Ohio HAVA funds for the interest lost 

7 
on the advances made in excess of 3 days from the time the 

counties spent them. 

6. Develop policies and procedures for minimizing the time elapsing 

between the transfer of funds from the Ohio Treasury and 

disbursement by grantees whenever advance payment procedures 

are used. 

7. Inform the counties receiving HAVA funds of the 41 CFR 105-

71.120(b)(7) requirement for minimizing the time elapsing 

between the transfer of funds from the Ohio Treasury and 

disbursement by grantees and the policies and procedures 

developed as a result of Recommendation 6 above. 

Secretary of State’s Response 

The Secretary of State generally agreed with the finding said that it will 

“develop policies and procedures - and inform the counties of these 

policies - to minimize the time elapsing between the transfer of funds 

from the Secretary’s Office to the counties and the counties’ use of those 

funds.” 

The Secretary of State also said that implementing the other 

recommendations would not only be “logistically difficult to implement, 

it would also unduly punish Ohio’s counties for failing to follow federal 

administrative rules of which they were not fully aware, or which were 

not adequately enforced by the previous administration in the Ohio 

Secretary of State’s Office.” 

As with the other interest-related finding, the Secretary of State proposed 

using the State’s overmatch of the requirements payments as an offset to 

estimated additional interest due of $263, 800. Finally, the response 

advised that all counties would be required to return any unspent HAVA 

grant monies to the Secretary of State. 

Office of Inspector General Comments 

 

We believe that the Secretary of State has proposed a reasonable 

alternative to resolve the additional interest due. As with the previous 

finding, EAC must determine whether the alternative is also in accordance 

with all criteria. 

Weaknesses in recording hours to be financed with HAVA funds resulted 

in minor overcharges to the HAVA accounts. We compared hours worked 

by 52 HAVA full-time and part-time staff with the hours recorded in the 

State’s official payroll system. For 49 employees, the hours recorded on 

SALARIES AND 

FRINGE 

BENEFITS

8 
their timesheets matched the hours recorded in the Payroll Disbursement 

Journal. For three of the employees, the hours recorded on their 

timesheets were less than the hours reported in the Payroll Disbursement 

Journal. For example, one employee’s timesheet identified 70.5 hours on 

HAVA activities yet 80 hours were charged to HAVA. The three errors 

totaled $664 in salary costs for hours worked that were in excess of time 

recorded on timesheets. Fringe benefit costs of $211 were associated with 

the $664 in incorrectly financed salary costs. 

Timekeepers recorded in the official Ohio State Payroll System hours 

worked for each employee. Because of the errors (a 5.8 percent error 

rate), we concluded that the controls over recording hours worked on 

HAVA should be improved. Specifically, an independent reviewer should 

confirm the accuracy of the hours input by the timekeeper. 

The Office agreed with our findings and recommendations. In that regard, 

we confirmed that the Office made adjustments to resolve the issue of the 

overcharged salary ($664) and fringe benefit ($211) costs. The following 

two recommendations, however, have not yet been implemented. 

Recommendation: 

We recommend that the EAC require the Office to: 

8. Implement a process by which an independent reviewer compares 

HAVA hours recorded in the official Ohio payroll system to 

employees’ timesheets to ensure the accuracy of the data in the 

official payroll system. The reviewer should indicate on the 

timesheets or in the payroll system that the review was completed. 

9. Compare HAVA hours recorded on employees’ timesheets with 

HAVA hours recorded in the Payroll Disbursement Journal for 

prior pay periods in which HAVA salaries were claimed (other 

than pay periods ending June 25, 2005, and July 9, 2005), and 

make adjustments to the HAVA Section 101 fund to reflect salary 

and fringe benefit costs associated with any hours that were 

recorded incorrectly. The applicable Financial Status Reports 

should be adjusted accordingly. 

Secretary of State Response 

The Secretary of State responded that Recommendation 8 will be 

implemented and that her Office had completed the review and 

adjustments resulting from Recommendation 9. 

9 
APPENDIX A 

SCOPE AND METHODOLOGY 

To accomplish our objective, we reviewed the following: 

9 The prior single audit report and other reviews related to the 

Secretary of State’s financial management systems and the HAVA 

program for the past 2 years. 

9 Policies, procedures, and regulations for the Ohio Secretary of 

State’s management and accounting systems as they relate to the 

administration of HAVA programs. 

9 A sample of inventory lists of equipment purchased with HAVA 

funds. 

9 Major purchases. 

9 A sample of supporting documents maintained in the accounting 

system for payments made with HAVA funds. 

9 A sample of grants and advances to counties. 

9 Certain Ohio laws that impacted the HAVA funds. 

9 Appropriations and expenditure reports for State funds used to 

maintain the level of expenses for elections at least equal to the 

amount expended in fiscal year 2000 and to meet the 5 percent 

matching requirement for section 251 requirements payments. 

9 Information regarding source/supporting documents kept for 

maintenance of effort and matching contributions. 

We also interviewed appropriate Elections Division and Finance 

Division employees about the organization and operation of the HAVA 

program. 

We conducted our review in accordance with Government Auditing 

Standards issued by the Comptroller General of the United States. As 

such, we included tests and procedures as considered necessary under 

the circumstances to evaluate the Divisions’ controls over the 

administration of HAVA programs and payments. Because of inherent 

limitations, a study and evaluation made for the limited purposes of 

our review would not necessarily disclose all weaknesses in 

administering HAVA payments.

10 
APPENDIX B 

MONETARY IMPACT 

Description 

Questioned 

Costs 

Additional Funds 

for Program 

Interest $6,800,000 

Salary costs $875

Totals $875 $6,800,000 

11 
 APPENDIX C

12
 APPENDIX C

13
 APPENDIX C

14
 APPENDIX C

15
 APPENDIX C

16
OIG’s Mission 

The OIG audit mission is to provide timely, high-quality 

professional products and services that are useful to OIG’s clients. 

OIG seeks to provide value through its work, which is designed to 

enhance the economy, efficiency, and effectiveness in EAC 

operations so they work better and cost less in the context of 

today's declining resources. OIG also seeks to detect and prevent 

fraud, waste, abuse, and mismanagement in these programs and 

operations. Products and services include traditional financial and 

performance audits, contract and grant audits, information systems 

audits, and evaluations. 

Obtaining 

Copies of 

OIG Reports 

Copies of OIG reports can be requested by e-mail. 

(eacoig@eac.gov). 

Mail orders should be sent to: 

U.S. Election Assistance Commission 

Office of Inspector General 

1225 New York Ave. NW - Suite 1100 

Washington, DC 20005 

To order by phone: Voice: (202) 566-3100 

 Fax: (202) 566-0957 

To Report Fraud, 

Waste and Abuse 

Involving the U.S. 

Election Assistance 

By Mail: U.S. Election Assistance Commission 

 Office of Inspector General 

 1225 New York Ave. NW - Suite 1100 

 Washington, DC 20005

Commission or Help 

America Vote Act 

Funds

E-mail: eacoig@eac.gov

OIG Hotline: 866-552-0004 (toll free) 

FAX: 202-566-0957