HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
CASH MANAGEMENT
FINDING NO. 2023-002 – TIME ELAPSING BETWEEN THE TRANSFER OF FUNDS
CRITERIA
Schools must minimize the time elapsing between the transfer of funds from ED and disbursement by the school for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)).
What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a school uses. Under the advance payment method, payment is made to the school before the school disburses the funds for program purposes (2 CFR section 200.3). Some schools’ grants may have been placed on Route Pay or Stop Pay Status, as indicated by a notification the grantee would have received from ED. This requires ED approval of a spending plan prior to the grantee drawing down funds or the submission of single requests with documentation.
For CRRSAA HEERF II and ARP HEERF III, the Certification and Agreement and/or Supplemental Agreement indicate that Student Aid (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from ED’s grant management system (G5), while Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within 3 calendar days of the drawdown from G5.
CONDITION
During our field work in the cash management area, we noted funds that were requested to G-5 but not disbursed by UPM to minimize the time elapsing between the transfer of funds and disbursement as follows:
Description Dates Amount
Funds receceived from G-5 on June 8, 2022 6/8/2022 $610,710.35
Funds disbursed during 2022-2023 Fiscal year 2022-23 (525,362.27)
Available balance from funds received in 6/8/2022 6/30/2023 $ 75,348.08
Funds receceived from G-5 on June 22, 2023 6/22/2023 $319,251.71
Funds disbursed at the end of fiscal year 2022-2023 6/30/2023 ( 45,000)
Available balance from funds received in 6/22/2023 6/30/2023 $274,251.71
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
CASH MANAGEMENT (CONTINUE)
FINDING NO. 2023-002 – TRANSFER OF FUNDS BEYOND THE REQUIRED TIME LIMITS
EFFECT
The drawdowns of Federal funds made by UPM not minimized the time elapsing between transfer of funds and the disbursement by the university according to regulations.
QUESTIONED COSTS $0.00
CAUSE
This situation occurred due to UPM did not make adequate follow up to the cash advances received from G-5
RECOMMENDATION
The University should reinforce the procedures the drawdown of funds to comply with the regulation applicable for the transfer of funds through the G-5 system.
VIEWS OF RESPONSIBLE OFFICIALS
See the Corrective Action Plan for details of action required.
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
PROCUREMENT SUSPENSION AND DEBARMENT
FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT
CRITERIA
Suspension and Debarment
Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 C.F.R.§ 180.220. All non-procurement transactions entered by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 C.F.R. § 180.215.
When a school enters into a covered transaction with an entity at a lower tier, the school must verify that the entity, as defined in 2 C.F.R. § 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management Exclusions maintained by the General Services Administration and available at https://www.sam.gov/SAM/ (click on Search Record, then click on Advanced Search- Exclusions) (Note: The OMB guidance at 2 C.F.R. part 180 and agency implementing regulations still refer to the System for Award Management Exclusions as the Excluded Parties List System), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 C.F.R. § 180.300).
Schools receiving contracts from the federal government are required to comply with the contract clause at FAR 52.209-6 before entering into a subcontract that will exceed $30,000, other than a subcontract for a commercially available off-the-shelf item.
Criteria: 2 C.F.R. §§ 200.318 through 200.326
2 C.F.R. Part 180
48 C.F.R. Subpart 2.1 48 C.F.R. § 9.405-2(b)
48 C.F.R. § 52.209-6
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
PROCUREMENT SUSPENSION AND DEBARMENT
FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT (CONTINUE)
CRITERIA (CONTINUE)
Improper payment means:
(1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.
(i) Incorrect amounts are overpayments or underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amount, and duplicate payments). An improper payment also includes any payment that was made to an ineligible recipient or for an ineligible good or service, or payments for goods or services not received.
Note 1 to paragraph (1)(i) of this definition. Applicable discounts are only those discounts where it is both advantageous and within the agency's control to claim them.
(ii) When an agency's review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation, this payment should also be considered an improper payment. When establishing documentation requirements for payments, agencies should ensure that all documentation requirements are necessary and should refrain from imposing additional burdensome documentation requirements.
Code of Federal regulations Title II
Subtitle A Chapter II
Part 200 Subpart A-Acronyms
Section 200.1
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
PROCUREMENT SUSPENSION AND DEBARMENT
FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT (CONTINUE)
CONDITION
We examined one hundred percent (100%) of the disbursed made and charged to HEERF Instutional Aid for the fiscal year 2022-2023 and noted the following:
1) UPM did not have documentation related Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred.
2) UPM made five (5) payments for $100,406.71 in advance for goods or services not received at the disbursement date.
EFFECT
UPM did not comply with the regulations and internal controls procedures to made disbursements before received goods or services.
QUESTIONED COSTS $100,406.71
CAUSE
The institution did not follow the institutional procedures to make disbursements before received goods or services according to regulations and institution procedures.
RECOMMENDATION
The Institution should reinforce the established procedures and adhere to them before any payment is made for goods or services. The amount of $100,406.71 should be reimbursed to the U.S. Department of Education. In addition, UPM should be included in its procedures steps to adopting regulations, to verify that the vendor entity is not suspended or debarred or otherwise excluded from participating in the transaction.
VIEWS OF RESPONSIBLE OFFICIALS
See the Corrective Action Plan for details of action required.
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
CASH MANAGEMENT
FINDING NO. 2023-002 – TIME ELAPSING BETWEEN THE TRANSFER OF FUNDS
CRITERIA
Schools must minimize the time elapsing between the transfer of funds from ED and disbursement by the school for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)).
What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a school uses. Under the advance payment method, payment is made to the school before the school disburses the funds for program purposes (2 CFR section 200.3). Some schools’ grants may have been placed on Route Pay or Stop Pay Status, as indicated by a notification the grantee would have received from ED. This requires ED approval of a spending plan prior to the grantee drawing down funds or the submission of single requests with documentation.
For CRRSAA HEERF II and ARP HEERF III, the Certification and Agreement and/or Supplemental Agreement indicate that Student Aid (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from ED’s grant management system (G5), while Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within 3 calendar days of the drawdown from G5.
CONDITION
During our field work in the cash management area, we noted funds that were requested to G-5 but not disbursed by UPM to minimize the time elapsing between the transfer of funds and disbursement as follows:
Description Dates Amount
Funds receceived from G-5 on June 8, 2022 6/8/2022 $610,710.35
Funds disbursed during 2022-2023 Fiscal year 2022-23 (525,362.27)
Available balance from funds received in 6/8/2022 6/30/2023 $ 75,348.08
Funds receceived from G-5 on June 22, 2023 6/22/2023 $319,251.71
Funds disbursed at the end of fiscal year 2022-2023 6/30/2023 ( 45,000)
Available balance from funds received in 6/22/2023 6/30/2023 $274,251.71
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
CASH MANAGEMENT (CONTINUE)
FINDING NO. 2023-002 – TRANSFER OF FUNDS BEYOND THE REQUIRED TIME LIMITS
EFFECT
The drawdowns of Federal funds made by UPM not minimized the time elapsing between transfer of funds and the disbursement by the university according to regulations.
QUESTIONED COSTS $0.00
CAUSE
This situation occurred due to UPM did not make adequate follow up to the cash advances received from G-5
RECOMMENDATION
The University should reinforce the procedures the drawdown of funds to comply with the regulation applicable for the transfer of funds through the G-5 system.
VIEWS OF RESPONSIBLE OFFICIALS
See the Corrective Action Plan for details of action required.
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
PROCUREMENT SUSPENSION AND DEBARMENT
FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT
CRITERIA
Suspension and Debarment
Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 C.F.R.§ 180.220. All non-procurement transactions entered by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 C.F.R. § 180.215.
When a school enters into a covered transaction with an entity at a lower tier, the school must verify that the entity, as defined in 2 C.F.R. § 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management Exclusions maintained by the General Services Administration and available at https://www.sam.gov/SAM/ (click on Search Record, then click on Advanced Search- Exclusions) (Note: The OMB guidance at 2 C.F.R. part 180 and agency implementing regulations still refer to the System for Award Management Exclusions as the Excluded Parties List System), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 C.F.R. § 180.300).
Schools receiving contracts from the federal government are required to comply with the contract clause at FAR 52.209-6 before entering into a subcontract that will exceed $30,000, other than a subcontract for a commercially available off-the-shelf item.
Criteria: 2 C.F.R. §§ 200.318 through 200.326
2 C.F.R. Part 180
48 C.F.R. Subpart 2.1 48 C.F.R. § 9.405-2(b)
48 C.F.R. § 52.209-6
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
PROCUREMENT SUSPENSION AND DEBARMENT
FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT (CONTINUE)
CRITERIA (CONTINUE)
Improper payment means:
(1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.
(i) Incorrect amounts are overpayments or underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amount, and duplicate payments). An improper payment also includes any payment that was made to an ineligible recipient or for an ineligible good or service, or payments for goods or services not received.
Note 1 to paragraph (1)(i) of this definition. Applicable discounts are only those discounts where it is both advantageous and within the agency's control to claim them.
(ii) When an agency's review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation, this payment should also be considered an improper payment. When establishing documentation requirements for payments, agencies should ensure that all documentation requirements are necessary and should refrain from imposing additional burdensome documentation requirements.
Code of Federal regulations Title II
Subtitle A Chapter II
Part 200 Subpart A-Acronyms
Section 200.1
HEERF INSTITUTIONAL AID
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE)
YEAR ENDED JUNE 30, 2023
PROCUREMENT SUSPENSION AND DEBARMENT
FINDING NO. 2023-003 – PROCUREMENT SUSPENSION AND DEBARMENT (CONTINUE)
CONDITION
We examined one hundred percent (100%) of the disbursed made and charged to HEERF Instutional Aid for the fiscal year 2022-2023 and noted the following:
1) UPM did not have documentation related Schools are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred.
2) UPM made five (5) payments for $100,406.71 in advance for goods or services not received at the disbursement date.
EFFECT
UPM did not comply with the regulations and internal controls procedures to made disbursements before received goods or services.
QUESTIONED COSTS $100,406.71
CAUSE
The institution did not follow the institutional procedures to make disbursements before received goods or services according to regulations and institution procedures.
RECOMMENDATION
The Institution should reinforce the established procedures and adhere to them before any payment is made for goods or services. The amount of $100,406.71 should be reimbursed to the U.S. Department of Education. In addition, UPM should be included in its procedures steps to adopting regulations, to verify that the vendor entity is not suspended or debarred or otherwise excluded from participating in the transaction.
VIEWS OF RESPONSIBLE OFFICIALS
See the Corrective Action Plan for details of action required.