Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (material weakness):
Information on the federal programs – HEERF Student Aid Portion 18004(a)(1), Assistance Listing No. 84.425E, June 30, 2023; HEERF Institutional Portion 18004(a)(1), Assistance Listing No. 84.425F, June 30, 2023; and HEERF Historically Black Colleges and Universities (HBCU) 18004(a)(2), Assistance Listing No. 84.425J, June 30, 2023.
Criteria – Federal regulations relative to HEERF 18004(a)(1) and (2).
Condition – Several non-compliances were noted and considered material given the amount of questioned costs.
Questioned Costs – Construction and Renovation Costs was $3.6 million. Total Salaries and contractual services was $1.3 million (subsequently reclassified $317,000).
Context – We observed the following conditions in connection with our testing of the various USDE, HEERF programs:
a) The College did not obtain required approval before incurring costs from the HEERF HBCU grant on construction and renovation costs. Federal regulations under HEERF (a)(2) stipulates prior-approval from USDE for all construction and renovations projects must be received before commencing any bidding or incurring construction costs. The College incurred and capitalized construction and renovation costs funded by the HEERF HBCU grant totaling $3.6 million in fiscal year 2023.
b) There were several construction and renovation costs incurred for the Health and Wellness Center such as roof replacement, HVAC unit replacement, etc. The Health and Wellness Center houses the gymnasium where athletic events are held. There was no allocable method provided to delineate which area benefitted from the project costs suggesting unallowed costs may have been incurred regarding the gymnasium space. Federal regulations under HEERF (a)(2) explicitly prohibits construction and renovation of athletic facilities, sectarian instruction or religious worship.
c) A number of salaries and contractual services charged to the HEERF HBCU grant appeared to involve responsibilities and services not solely dedicated to the grant. Various positions within the business office were charged to the grant at 100% rate based on time and effort reports examined during testing. A portion of these expenses were subsequently reclassified to operational costs totaling $317,000 out of $1.3 million. Additionally, the full compensation for the director of another active grant was charged to the HEERF HBCU grant. Besides conflicting roles, discerning the allocation of costs associated with COVID-19 prevention, preparation, and response was not consistently apparent.
Cause – Unfamiliarity or misinterpretation of Federal regulations.
Effect – Incurred costs could be disallowed and funds required to be reimbursed back to the Federal government.
Repeat Finding – No.
Auditor’s Recommendation – The College should provide grant-compliant justification to substantiate the questioned costs as a resolution to this matter. A representative at USDE may offer some insight and consideration on retrospective approvals for construction and renovation projects. Also, the specific purpose for all salaries and contractual services charged to the HEERF grants should be documented for better clarity. Views of Responsible Officials – Procedures will be implemented to assure Federal Regulations are properly followed such that HEERF HBCU pre-approvals are obtained from the USdE for all construction and renovation projects. In addition, construction and renovation costs associated with the Health and Wellness Center will be adequately documented to better distinguish them from gymnasium-related expenditures. Time and effort reporting procedures will be more closely monitored for accurate documentation and segregation of unallowable costs from allowable costs. Contact will made to USDE specifically to remedy the disclosed findings noted above.
Finding 2023-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (material weakness):
Information on the federal programs – HEERF Student Aid Portion 18004(a)(1), Assistance Listing No. 84.425E, June 30, 2023; HEERF Institutional Portion 18004(a)(1), Assistance Listing No. 84.425F, June 30, 2023; and HEERF Historically Black Colleges and Universities (HBCU) 18004(a)(2), Assistance Listing No. 84.425J, June 30, 2023.
Criteria – Federal regulations relative to HEERF 18004(a)(1) and (2).
Condition – Several non-compliances were noted and considered material given the amount of questioned costs.
Questioned Costs – Construction and Renovation Costs was $3.6 million. Total Salaries and contractual services was $1.3 million (subsequently reclassified $317,000).
Context – We observed the following conditions in connection with our testing of the various USDE, HEERF programs:
a) The College did not obtain required approval before incurring costs from the HEERF HBCU grant on construction and renovation costs. Federal regulations under HEERF (a)(2) stipulates prior-approval from USDE for all construction and renovations projects must be received before commencing any bidding or incurring construction costs. The College incurred and capitalized construction and renovation costs funded by the HEERF HBCU grant totaling $3.6 million in fiscal year 2023.
b) There were several construction and renovation costs incurred for the Health and Wellness Center such as roof replacement, HVAC unit replacement, etc. The Health and Wellness Center houses the gymnasium where athletic events are held. There was no allocable method provided to delineate which area benefitted from the project costs suggesting unallowed costs may have been incurred regarding the gymnasium space. Federal regulations under HEERF (a)(2) explicitly prohibits construction and renovation of athletic facilities, sectarian instruction or religious worship.
c) A number of salaries and contractual services charged to the HEERF HBCU grant appeared to involve responsibilities and services not solely dedicated to the grant. Various positions within the business office were charged to the grant at 100% rate based on time and effort reports examined during testing. A portion of these expenses were subsequently reclassified to operational costs totaling $317,000 out of $1.3 million. Additionally, the full compensation for the director of another active grant was charged to the HEERF HBCU grant. Besides conflicting roles, discerning the allocation of costs associated with COVID-19 prevention, preparation, and response was not consistently apparent.
Cause – Unfamiliarity or misinterpretation of Federal regulations.
Effect – Incurred costs could be disallowed and funds required to be reimbursed back to the Federal government.
Repeat Finding – No.
Auditor’s Recommendation – The College should provide grant-compliant justification to substantiate the questioned costs as a resolution to this matter. A representative at USDE may offer some insight and consideration on retrospective approvals for construction and renovation projects. Also, the specific purpose for all salaries and contractual services charged to the HEERF grants should be documented for better clarity. Views of Responsible Officials – Procedures will be implemented to assure Federal Regulations are properly followed such that HEERF HBCU pre-approvals are obtained from the USdE for all construction and renovation projects. In addition, construction and renovation costs associated with the Health and Wellness Center will be adequately documented to better distinguish them from gymnasium-related expenditures. Time and effort reporting procedures will be more closely monitored for accurate documentation and segregation of unallowable costs from allowable costs. Contact will made to USDE specifically to remedy the disclosed findings noted above.
Finding 2023-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (material weakness):
Information on the federal programs – HEERF Student Aid Portion 18004(a)(1), Assistance Listing No. 84.425E, June 30, 2023; HEERF Institutional Portion 18004(a)(1), Assistance Listing No. 84.425F, June 30, 2023; and HEERF Historically Black Colleges and Universities (HBCU) 18004(a)(2), Assistance Listing No. 84.425J, June 30, 2023.
Criteria – Federal regulations relative to HEERF 18004(a)(1) and (2).
Condition – Several non-compliances were noted and considered material given the amount of questioned costs.
Questioned Costs – Construction and Renovation Costs was $3.6 million. Total Salaries and contractual services was $1.3 million (subsequently reclassified $317,000).
Context – We observed the following conditions in connection with our testing of the various USDE, HEERF programs:
a) The College did not obtain required approval before incurring costs from the HEERF HBCU grant on construction and renovation costs. Federal regulations under HEERF (a)(2) stipulates prior-approval from USDE for all construction and renovations projects must be received before commencing any bidding or incurring construction costs. The College incurred and capitalized construction and renovation costs funded by the HEERF HBCU grant totaling $3.6 million in fiscal year 2023.
b) There were several construction and renovation costs incurred for the Health and Wellness Center such as roof replacement, HVAC unit replacement, etc. The Health and Wellness Center houses the gymnasium where athletic events are held. There was no allocable method provided to delineate which area benefitted from the project costs suggesting unallowed costs may have been incurred regarding the gymnasium space. Federal regulations under HEERF (a)(2) explicitly prohibits construction and renovation of athletic facilities, sectarian instruction or religious worship.
c) A number of salaries and contractual services charged to the HEERF HBCU grant appeared to involve responsibilities and services not solely dedicated to the grant. Various positions within the business office were charged to the grant at 100% rate based on time and effort reports examined during testing. A portion of these expenses were subsequently reclassified to operational costs totaling $317,000 out of $1.3 million. Additionally, the full compensation for the director of another active grant was charged to the HEERF HBCU grant. Besides conflicting roles, discerning the allocation of costs associated with COVID-19 prevention, preparation, and response was not consistently apparent.
Cause – Unfamiliarity or misinterpretation of Federal regulations.
Effect – Incurred costs could be disallowed and funds required to be reimbursed back to the Federal government.
Repeat Finding – No.
Auditor’s Recommendation – The College should provide grant-compliant justification to substantiate the questioned costs as a resolution to this matter. A representative at USDE may offer some insight and consideration on retrospective approvals for construction and renovation projects. Also, the specific purpose for all salaries and contractual services charged to the HEERF grants should be documented for better clarity. Views of Responsible Officials – Procedures will be implemented to assure Federal Regulations are properly followed such that HEERF HBCU pre-approvals are obtained from the USdE for all construction and renovation projects. In addition, construction and renovation costs associated with the Health and Wellness Center will be adequately documented to better distinguish them from gymnasium-related expenditures. Time and effort reporting procedures will be more closely monitored for accurate documentation and segregation of unallowable costs from allowable costs. Contact will made to USDE specifically to remedy the disclosed findings noted above.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-001 - U.S. Department of Education (USDEJ. Title IV Student Financial Aid
Programs (Deficiency):
Information on the federal program: Federal Direct Student Loans, Assistance Listing No.
84. 268, June 30, 2023; Federal Pell Grants Program, Assistance Listing No. 84. 063, June 30,
2023; Federal Supplemental Educational Opportunity Grant, Assistance Listing No. 84. 007, June
30, 2023; Federal Work-Study Program, Assistance Listing No. 84. 033, June 30, 2023.
Criteria - Federal regulations governing Title IV programs.
Condition - Non-compliances were noted, as more fully described in the context below.
Questioned Costs - $9,415.
Context- We observed the following condition in connection with our testing of the various
USDE, Title IV, Student Financial Assistance Programs.
a) One (1) out of 15 files tested were missing official transcripts. The total questioned costs
$9,415. 34 CFR 668.32
Cause - Oversight by responsible employees.
Effect- The College's participation in the Title IV programs could be subject to USDE sanctions
as applicable.
Repeat Finding- Yes.
Auditor's Recommendation - The College should implement corrective actions to ensure the
above finding is resolved and will not recur in future periods.
Finding 2023-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (material weakness):
Information on the federal programs – HEERF Student Aid Portion 18004(a)(1), Assistance Listing No. 84.425E, June 30, 2023; HEERF Institutional Portion 18004(a)(1), Assistance Listing No. 84.425F, June 30, 2023; and HEERF Historically Black Colleges and Universities (HBCU) 18004(a)(2), Assistance Listing No. 84.425J, June 30, 2023.
Criteria – Federal regulations relative to HEERF 18004(a)(1) and (2).
Condition – Several non-compliances were noted and considered material given the amount of questioned costs.
Questioned Costs – Construction and Renovation Costs was $3.6 million. Total Salaries and contractual services was $1.3 million (subsequently reclassified $317,000).
Context – We observed the following conditions in connection with our testing of the various USDE, HEERF programs:
a) The College did not obtain required approval before incurring costs from the HEERF HBCU grant on construction and renovation costs. Federal regulations under HEERF (a)(2) stipulates prior-approval from USDE for all construction and renovations projects must be received before commencing any bidding or incurring construction costs. The College incurred and capitalized construction and renovation costs funded by the HEERF HBCU grant totaling $3.6 million in fiscal year 2023.
b) There were several construction and renovation costs incurred for the Health and Wellness Center such as roof replacement, HVAC unit replacement, etc. The Health and Wellness Center houses the gymnasium where athletic events are held. There was no allocable method provided to delineate which area benefitted from the project costs suggesting unallowed costs may have been incurred regarding the gymnasium space. Federal regulations under HEERF (a)(2) explicitly prohibits construction and renovation of athletic facilities, sectarian instruction or religious worship.
c) A number of salaries and contractual services charged to the HEERF HBCU grant appeared to involve responsibilities and services not solely dedicated to the grant. Various positions within the business office were charged to the grant at 100% rate based on time and effort reports examined during testing. A portion of these expenses were subsequently reclassified to operational costs totaling $317,000 out of $1.3 million. Additionally, the full compensation for the director of another active grant was charged to the HEERF HBCU grant. Besides conflicting roles, discerning the allocation of costs associated with COVID-19 prevention, preparation, and response was not consistently apparent.
Cause – Unfamiliarity or misinterpretation of Federal regulations.
Effect – Incurred costs could be disallowed and funds required to be reimbursed back to the Federal government.
Repeat Finding – No.
Auditor’s Recommendation – The College should provide grant-compliant justification to substantiate the questioned costs as a resolution to this matter. A representative at USDE may offer some insight and consideration on retrospective approvals for construction and renovation projects. Also, the specific purpose for all salaries and contractual services charged to the HEERF grants should be documented for better clarity. Views of Responsible Officials – Procedures will be implemented to assure Federal Regulations are properly followed such that HEERF HBCU pre-approvals are obtained from the USdE for all construction and renovation projects. In addition, construction and renovation costs associated with the Health and Wellness Center will be adequately documented to better distinguish them from gymnasium-related expenditures. Time and effort reporting procedures will be more closely monitored for accurate documentation and segregation of unallowable costs from allowable costs. Contact will made to USDE specifically to remedy the disclosed findings noted above.
Finding 2023-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (material weakness):
Information on the federal programs – HEERF Student Aid Portion 18004(a)(1), Assistance Listing No. 84.425E, June 30, 2023; HEERF Institutional Portion 18004(a)(1), Assistance Listing No. 84.425F, June 30, 2023; and HEERF Historically Black Colleges and Universities (HBCU) 18004(a)(2), Assistance Listing No. 84.425J, June 30, 2023.
Criteria – Federal regulations relative to HEERF 18004(a)(1) and (2).
Condition – Several non-compliances were noted and considered material given the amount of questioned costs.
Questioned Costs – Construction and Renovation Costs was $3.6 million. Total Salaries and contractual services was $1.3 million (subsequently reclassified $317,000).
Context – We observed the following conditions in connection with our testing of the various USDE, HEERF programs:
a) The College did not obtain required approval before incurring costs from the HEERF HBCU grant on construction and renovation costs. Federal regulations under HEERF (a)(2) stipulates prior-approval from USDE for all construction and renovations projects must be received before commencing any bidding or incurring construction costs. The College incurred and capitalized construction and renovation costs funded by the HEERF HBCU grant totaling $3.6 million in fiscal year 2023.
b) There were several construction and renovation costs incurred for the Health and Wellness Center such as roof replacement, HVAC unit replacement, etc. The Health and Wellness Center houses the gymnasium where athletic events are held. There was no allocable method provided to delineate which area benefitted from the project costs suggesting unallowed costs may have been incurred regarding the gymnasium space. Federal regulations under HEERF (a)(2) explicitly prohibits construction and renovation of athletic facilities, sectarian instruction or religious worship.
c) A number of salaries and contractual services charged to the HEERF HBCU grant appeared to involve responsibilities and services not solely dedicated to the grant. Various positions within the business office were charged to the grant at 100% rate based on time and effort reports examined during testing. A portion of these expenses were subsequently reclassified to operational costs totaling $317,000 out of $1.3 million. Additionally, the full compensation for the director of another active grant was charged to the HEERF HBCU grant. Besides conflicting roles, discerning the allocation of costs associated with COVID-19 prevention, preparation, and response was not consistently apparent.
Cause – Unfamiliarity or misinterpretation of Federal regulations.
Effect – Incurred costs could be disallowed and funds required to be reimbursed back to the Federal government.
Repeat Finding – No.
Auditor’s Recommendation – The College should provide grant-compliant justification to substantiate the questioned costs as a resolution to this matter. A representative at USDE may offer some insight and consideration on retrospective approvals for construction and renovation projects. Also, the specific purpose for all salaries and contractual services charged to the HEERF grants should be documented for better clarity. Views of Responsible Officials – Procedures will be implemented to assure Federal Regulations are properly followed such that HEERF HBCU pre-approvals are obtained from the USdE for all construction and renovation projects. In addition, construction and renovation costs associated with the Health and Wellness Center will be adequately documented to better distinguish them from gymnasium-related expenditures. Time and effort reporting procedures will be more closely monitored for accurate documentation and segregation of unallowable costs from allowable costs. Contact will made to USDE specifically to remedy the disclosed findings noted above.
Finding 2023-002 – U.S. Department of Education (USDE) Higher Education Emergency Relief Fund (HEERF) Programs (material weakness):
Information on the federal programs – HEERF Student Aid Portion 18004(a)(1), Assistance Listing No. 84.425E, June 30, 2023; HEERF Institutional Portion 18004(a)(1), Assistance Listing No. 84.425F, June 30, 2023; and HEERF Historically Black Colleges and Universities (HBCU) 18004(a)(2), Assistance Listing No. 84.425J, June 30, 2023.
Criteria – Federal regulations relative to HEERF 18004(a)(1) and (2).
Condition – Several non-compliances were noted and considered material given the amount of questioned costs.
Questioned Costs – Construction and Renovation Costs was $3.6 million. Total Salaries and contractual services was $1.3 million (subsequently reclassified $317,000).
Context – We observed the following conditions in connection with our testing of the various USDE, HEERF programs:
a) The College did not obtain required approval before incurring costs from the HEERF HBCU grant on construction and renovation costs. Federal regulations under HEERF (a)(2) stipulates prior-approval from USDE for all construction and renovations projects must be received before commencing any bidding or incurring construction costs. The College incurred and capitalized construction and renovation costs funded by the HEERF HBCU grant totaling $3.6 million in fiscal year 2023.
b) There were several construction and renovation costs incurred for the Health and Wellness Center such as roof replacement, HVAC unit replacement, etc. The Health and Wellness Center houses the gymnasium where athletic events are held. There was no allocable method provided to delineate which area benefitted from the project costs suggesting unallowed costs may have been incurred regarding the gymnasium space. Federal regulations under HEERF (a)(2) explicitly prohibits construction and renovation of athletic facilities, sectarian instruction or religious worship.
c) A number of salaries and contractual services charged to the HEERF HBCU grant appeared to involve responsibilities and services not solely dedicated to the grant. Various positions within the business office were charged to the grant at 100% rate based on time and effort reports examined during testing. A portion of these expenses were subsequently reclassified to operational costs totaling $317,000 out of $1.3 million. Additionally, the full compensation for the director of another active grant was charged to the HEERF HBCU grant. Besides conflicting roles, discerning the allocation of costs associated with COVID-19 prevention, preparation, and response was not consistently apparent.
Cause – Unfamiliarity or misinterpretation of Federal regulations.
Effect – Incurred costs could be disallowed and funds required to be reimbursed back to the Federal government.
Repeat Finding – No.
Auditor’s Recommendation – The College should provide grant-compliant justification to substantiate the questioned costs as a resolution to this matter. A representative at USDE may offer some insight and consideration on retrospective approvals for construction and renovation projects. Also, the specific purpose for all salaries and contractual services charged to the HEERF grants should be documented for better clarity. Views of Responsible Officials – Procedures will be implemented to assure Federal Regulations are properly followed such that HEERF HBCU pre-approvals are obtained from the USdE for all construction and renovation projects. In addition, construction and renovation costs associated with the Health and Wellness Center will be adequately documented to better distinguish them from gymnasium-related expenditures. Time and effort reporting procedures will be more closely monitored for accurate documentation and segregation of unallowable costs from allowable costs. Contact will made to USDE specifically to remedy the disclosed findings noted above.